Pipeline repairs cost NNPC N75.23bn in one year  

 

By Tobias Pius

 

Repairs and maintenance of vandalised and leaking pipelines conveying crude oil from wells to flow stations cost Nigeria’s state-owned oil company, Nigerian National Petroleum Corporation (NNPC), N75.23 billion between September 2019 and September 2020, a report by the corporation has shown.

Under the heading, “Pipelines Repairs and Management Cost” in its latest operations report NNPC disclosed that a total of 669 vandalized points were recorded.

 

The costs show NNPC’s internally incurred expenses which are funded from domestic crude oil sales revenue before such monies are remitted to the Federation Account.

While explaining the pipeline maintenance and management costs in its past audit, NNPC included pipeline vandalism repair cost, pipeline security, and community costs, salaries, and upfront benefits of staff, among others.

“Products theft and vandalism have continued to destroy value and put NNPC at the disadvantaged competitive position,” the report noted.

 

Further analysis of the report showed that in September 2020 alone, 21 pipeline points were vandalized representing about 43 per cent decrease from the 37 points recorded in August 2020. Of this figure, Mosimi area accounted for 90 per cent of the vandalized points while Port Harcourt area accounted for the remaining 10 per cent.

 

A comparative analysis of previous reports shows that a total of 1,883 pipeline vandalisations occurred between September 2017 and September 2018, and September 2019 did witness the highest amount paid for repairs at N12.9 billion.

 

Nigeria is Africa’s biggest crude oil producer, but for more than a decade the government has been plagued by huge theft and vandalism on oil pipelines and installations within the creeks of the Niger Delta region which houses the nation’s oil exploration base.

 

A 2019 report by the Nigeria Extractive Industries Transparency Initiative (NEITI) revealed that Nigeria has lost $41.9 billion worth of crude oil and refined products to theft and vandalism since 2009, thus begging the need for the special security task force, oil companies and technical experts to join forces and further push to help curb theft and vandalism within the nation’s oil industry.

 

There is a need for more focus to be placed on improving response time to incidents, and the government on its part needs to keep up with newer technologies in its war against oil theft and pipeline vandalism