The Federal Government has revealed that the Nigerian National Petroleum Company Limited (NNPC) lacks the financial resources necessary to rebuild the country’s aging pipelines.
Speaking at the 2024 Energy and Labour Summit in Abuja, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, highlighted the challenges posed by outdated, corroded pipelines that were constructed in the 1960s and 1970s.
Lokpobiri stressed the urgency of replacing these pipelines, noting that even if Nigeria increases its crude oil production to over 1.7 million barrels per day, transporting the oil remains a significant issue due to the deteriorated state of the infrastructure.
He explained that the old pipelines are easily vandalized because of their weakened condition.
He questioned NNPC’s ability to fund the necessary pipeline replacements, suggesting that public-private partnerships (PPP) are the most viable solution to address the infrastructure challenges.
He emphasized the need for investor confidence in Nigeria to attract private sector involvement, which has been lacking in recent years.
Lokpobiri also addressed the issue of fuel smuggling, attributing it to NNPC’s practice of importing and selling fuel below the landing cost, which encourages illegal cross-border trade.
He expressed concern about the ability to supply crude oil to local refineries, including Dangote’s, unless production is significantly increased.
The minister affirmed the government’s commitment to supporting local refining, but warned that without sufficient crude supply, this ambition might falter.
He concluded by stressing the importance of creating a fair competitive environment for both small and large refiners in the country.
