Nigeria’s obsolete crude oil evacuation integrated pipeline network is currently undergoing a total overhaul and replacement to enhance the smooth and safe transportation of the product to its export terminal points.
The Nigerian Minister of State for Petroleum (Oil), Senator Heineken Lokpobiri, disclosed the wonderful endeavor at a panel session of the ongoing Nigeria International Energy Summit, with the theme “Energy for Peace and Prosperity: Securing Our Shared Future.”
According to Lokpobiri, the relatively high cost of crude oil production, amongst other components in Nigeria’s upstream, can be attributed to the aged state of the pipeline infrastructure for crude oil evacuation and transportation to export terminals.
“Other components are making this so-called ‘very high cost’, security, community issues, evacuation issues, and before now, why our cost was so great was that our pipelines have since expired, though they were built 40 to 50 years ago, and the life span has ended.
“So, if you produce and you supply what you get at the final destination is less than 10% of what you expected to get, people resort to barging, and to barge, the cost is prohibitive, sometimes at 20 dollars per barrel, all these are added to the cost, “the minister stated.
The minister further disclosed that sometimes other parameters influence the high cost of drilling in Nigeria, which are beyond the control of his ministry, such as the hike in aviation offshore operations in the Nigerian oil and gas industry, and he specifically mentioned the high cost of helicopter landing.
“The PIA section 25 states that nobody, including government agencies, should decide in relation to the oil and gas industry unless in connivance of or with approval of NUPRC, but I will in my office, I hear that ministry of Aviation has said that every Helicoper that lands attract 300 dollars, and these are the things that are added to the cost,” He explained.
Aged crude evacuation pipeline systems, particularly in regions like the Niger Delta, face significant operational challenges, including corrosion, vandalism, and high maintenance costs, leading to frequent downtime and revenue losses.
In the same vein, the Group Managing Director of NNPC Ltd has said gains have made in the reduction of crude oil theft and improved pipeline availability. The NNPC Ltd GCEO attributed the success to strengthened collaboration with upstream operators, noting that renewed engagement and trust have significantly proven to be a major boost for investor confidence, commercial outcomes, and productivity.
