Nigeria's Federal Government has revealed that the Nigerian National Petroleum Company Limited (NNPC) lacks sufficient funds to rehabilitate its aging pipelines.

Petroleum Resources Minister of State Heineken Lokpobiri made the announcement during the 2024 Energy and Labour Summit organized in Abuja by the Petroleum and Natural Gas Senior Staff Association of Nigeria on Monday, August 26, 2024.

In the summit, Lokpobiri emphasized the urgent need to repair Nigeria's corroded and outdated pipelines to support the country’s effort to increase oil production. He warned that even if production surpasses 1.7 million barrels per day, transporting the crude oil to terminals remains a significant challenge due to the dilapidated infrastructure.

“Part of our problem is that pipelines that were traditionally transporting our crude were built in the 1960s and the 1970s, and their lifespan has been over. We have identified that even when we can produce, evacuation is a big problem,” he said.

Lokpobiri also noted that many of Nigeria's pipelines have long outlived their expected lifespan, making them easy targets for illegal tapping, a challenge Nigeria’s oil pipeline industry has grappled with for decades. 

During his address, Lokpobiri called for public-private partnerships to address the issue, citing the need for private-sector investment to modernize the country's pipeline network.

The minister also highlighted the problem of fuel smuggling from Nigeria to neighboring countries, attributing it to the NNPC's importation and sale of fuel below market prices. He emphasized Nigeria's role in Africa's energy security and the need to address smuggling to ensure a stable fuel supply within the region.

Regarding the supply of crude oil to local refineries like Dangote, Lokpobiri expressed concerns about potential shortages unless production is significantly increased. He reiterated the government's commitment to supporting local refining but acknowledged the challenges posed by insufficient crude oil supply.

In closing remarks, he emphasized the government's commitment to ensuring fair competition among Nigeria's small and large refiners.