Covering Security, Maintenance, Others
Despite spending an average of N6 billion every month, covering security and maintenance, pipeline repairs, marine distribution, pipeline management costs, strategic holding, vandalism of pipelines belonging to the Nigerian National Petroleum Corporation (NNPC) and its partners, is far from abating.
According to the Monthly Financial Operations Report (MFOR) of the NNPC, in January 2020 alone, the NNPC spent N1.603 billion on pipelines repair, marine distribution was N1.4 billion while pipelines management cost was N1.666 billion, among other expenses.
A breakdown of the total amount spent within 10 months last year by the NNPC to repair and manage pipelines showed that N5.48 billion was spent in January; N6.74 billion in February; N7.70 billion in March; N7.84 billion in April and N7.99 billion in May.
Although a large portion of the over 5,000-kilometre pipelines across the country is no longer functional due to ageing and vandalism, with products now transported by road, the corporation continues to spend huge resources its management.
The report also revealed that between January 2012 and December 2014, losses from vandalism of crude oil pipelines and petroleum products stood at about N202.68 billion, while petroleum products strategic holding cost and pipeline repairs and maintenance cost for the period gulped N358.88 billion.
In the same vein, between January 2019 and September 2020, a total of 1,161 pipeline points were vandalised across Nigeria in the 21 months, according to data from the national oil company.
Many of the cases of sabotage and vandalism, the NNPC said, happen around the Port Harcourt axis, Mosimi-Ibadan axis, Gombe and Warri-River Niger.
But despite the investment on pipelines security, the menace does not seem to be abating. For instance in September 2020, a total of 21 pipeline points were vandalised, a 43 per cent decrease from the 37 points recorded in August 2020. But in the latest figures released by the NNPC on Sunday, it climbed to 70 in March this year.
While Port Harcourt area accounted for 54 per cent of the breakages, Mosimi’s share of points vandalised stools at 46 per cent, a development the corporation said “continue to destroy value and put NNPC at a disadvantaged competitive position.”
From January 2020 to January 2021, NNPC documents showed that the company spent a total of N59.1 billion on the repair and management of the pipelines within a year.
Although figures from various sources on how much products Nigeria lose from the breakages vary, it is estimated that between 200,000 barrel per day to 400,000 bpd is being lost to the menace today.
But recently, Group Managing Director, NNPC, Mele Kyari confirmed that Nigeria is losing an average of 200,000 b/d of its crude oil production to theft, indicating a surge in pipeline sabotage.
Kyari spoke when he held talks with the Chief of Defence Staff (CDS), Gen. Lucky Irabor, on ways to curb frequent attacks on pipelines and large-scale siphoning of the crude.
The NNPC chief said that while attacks on its key oil products pipeline network System 2B, mainly used to transport imported gasoline, had reduced considerably due to support from the security agencies, crude theft had become more prevalent.
Most of the expenses are funded from domestic crude oil sales revenue before the monies is remitted to the Federation Account, a situation that has partly led to its dwindling contribution to the joint account.
