In its first official publication in 2021, Nigerian National Petroleum Corporation (NNPC) has revealed it spent N60.5billion on repairs and maintenance of leaking pipelines carrying crude oil from wells to flow stations in the Niger Delta, where more than 90 percent of the country’s crude is produced.
In Nigeria, petroleum and associated products are transported through an extensive network of pipelines that run across different locations throughout the country from remote to populated areas.
These pipelines are however, poorly secured, thereby making them targets of repetitive attacks by vandals and this has cut the country’s revenue from oil and gas by half.
Between January 2020 to January 2021, NNPC recorded a total of 508 vandalised points, spending a total of N60.5billion in the process of trying to get them fixed.
“Products theft and vandalism have continued to destroy value and put NNPC at a disadvantaged competitive position,” NNPC admitted in its official report.
NNPC spent N5.48billion on pipeline repairs and management cost in January; N6.74billion in February; N7.69billion in March; N7.84billion in April;
N7.99billion in May and N6.24billion in June.
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The corporation spent N1.80billion in July; N1.49billion in August; N4.41billion in October, and N3.68bn in November. No repairs and management cost was incurred in December and January 2021, according to the data.
Ayodele Oni, energy lawyer and partner at Bloomfield law practice said the problem of pipeline vandalism is broad. “When you have problems surrounding unemployment, corruption, poverty, neglect and lack of social infrastructure this is what you get.”
“Government needs to give the locals a sense of belongings like job opportunities, education, and infrastructure and stop giving money to local chiefs,” Oni said.
Nigeria is too dependent on pipelines, says Oni, “Therefore we need to develop our transport system for easy movement of crude oil for example explore the opportunities in the rail system which is what other countries are doing.”
Statistics from the latest audit report of the Nigeria Extractive Industries Transparency Initiative, (NEITI) Nigeria recorded the highest crude oil loss in the last 18 years with an average of 245 million barrels of oil going down the drain in 2016.
In January 2021, the national oil company said a total of 96 companies from various jurisdictions had indicated an interest in undertaking the rehabilitation of its downstream facilities, ranging from critical pipelines to depots and terminals, through the Build, Operate and Transfer financing model.
Ada Oyetunde, the Managing Director of the Nigerian Pipelines and Storage Company, , said the exercise was in conformity with the mandate of the Federal Government to prioritise the rehabilitation of critical downstream infrastructure across the country.
She listed the facilities that would be rehabilitated by successful bidders to include critical pipelines for crude oil supply to the refineries and evacuation of refined products, depots, and terminals.
