The Nigerian Government has spent a total of N13.7 billion on pipeline repair and maintenance from the beginning of the year till May 2021.
According to the Nigerian National Petroleum Corporation (NNPC) monthly report on ‘Crude Oil And Gas Sales And Proceeds’ obtained by BizWatch Nigeria on Tuesday there are no records of pipeline repairs and maintenance in January this year.
Giving a breakdown, the corporation said it spent N4.19 billion on pipeline repairs and management in February; N3.68 billion in March; N1.68 billion in April; and N4.15 billion in May.
The Minister of Information and Culture, Lai Mohammed, on Monday had raised an alarm over the huge amount the Federal Government spends on the repair of vandalised pipelines, which he estimated as N60 billion annually.
Speaking at a town hall meeting on the protection of oil and gas infrastructure in the country in Abuja, the minister said destruction of oil pipes has socioeconomic and environmental impact.
According to him, oil and gas provided 80 percent of Nigeria’s budgetary revenue as well as 95 percent of foreign exchange earnings, hence the impact of pipeline vandalism on the economy.
BizWatch reported last month that Nigeria’s crude oil production output has been affected by technical and operational issues as well as pipeline vandalism.
This is because the crude production has only been able to produce only two-thirds of its full capacity of between 2.2 million to 2.3 million b/d of crude oil.
Crude oil production in Nigeria is estimated to be around 1.64 million b/d this year, according to S&P Global Platts.
In the last six months, many of its large oil fields, especially those in the Niger Delta like Forcados, Bonny, Escravos, Brass River and Qua Iboe and some offshore fields like Bonga, Usan, EA, have been pumping much below their normal levels due to either technical or maintenance issues.
It was gathered that there has also been a rise in leakages at some of the country’s key pipeline networks.
Some of these were because of an increase in pipeline sabotage while others are because of the country’s fragile and aging infrastructure, some of which need urgent rehabilitation work.
In April and May, there were shut-ins by some of the producers using the Nembe Creek Trunk Line to transport their production to Bonny Terminal, due to a couple of leakages on the line.
Analysis by BizWatch Nigeria showed that vandalism of pipelines and other facilities of oil companies in Nigeria has led to the loss of N146.16 million revenue due to the spillage of large volumes of crude oil this year.
Nigeria has suffered 129 oil spill incidents this year, according to data obtained by from the National Oil Spill Detection and Response Agency (NOSDRA).
The volume of crude oil lost during this period amounted to a loss of 4,805.15 barrels of crude oil.
Analysis of the data indicated that 95.4 per cent of the oil spill was caused by sabotage, theft and vandalism while other causes are equipment failure, corrosion and operational or maintenance error.