A Review of the Nigerian Energy Industry

NNPC ‘wastes’ billions on pipeline repairs

NNPC pipeline
NNPC pipeline

*Says over 50 attacks witnessed in a few months

Oscarline Onwuemenyi

12 February 2015, Sweetcrude, Abuja – The Nigerian National Petroleum Corporation on Wednesday described its expenditure on the fixing of vandalised pipelines as burdensome and unnecessary.

Meanwhile, the Corporation has disclosed that it has ended it’s controversial contract with “community services” in the provision of security for oil and gas pipelines, a situation that may have led to a rise in pipeline vandalism across the country.

The Group Managing Director of the NNPC, Dr. Joseph Dawha, noted this in Abuja while fielding questions from the media on the the recommendations of the forensic audit report undertaken by PriceWaterhouseCoopers.

Dawha, who was clarifying the highlights of the Forensic Audit Report, which directed the corporation to reduce its unnecessary
expenditure, said the huge debt incurred on stolen crude and fixing of the damaged pipelines occasioned by acts of sabotage was uncalled for.

He said NNPC was operating under a very difficult environment and there was no special budget for the fixing of vandalised pipelines, which had to be done whenever the occasion arose.

He said, “I quite agree with you that some expenditure is unnecessary, especially when they are sabotage.

“We operate under very difficult environments. Expenditure of fixing pipelines and accounting for crude that were deliberately stolen are not expenditure the nation can afford.

“We will rather have a system whereby crude is put in the pipeline and arrives at its destination and they are refined.

“This is a normal operation but we are really in abnormal operation.”
Dawha said vandalism had been a major challenge the corporation had been facing in the last few months.

Also speaking at the event, the Group Executive Director in charge of Gas and Power, Dr. David Ige, said vandalism was one of the biggest threats to NNPC operations and aspiration of the Federal Government.

Ige noted that, “Over the last six months, we have been confronted with over 50 cases of pipeline attacks across the crude oil pipeline and gas pipelines.

“The latest, which just happened about 24 hours ago, is on the Lagos-Escravous pipeline. Each of these attacks caused us significant amount of money to repair.”

According to Ige, “The pipelines are located in a very difficult terrain to access. If there is an attack on the pipeline, the logistic of getting it repaired is expensive.

“We continue to bear the cost of this, which we consider to be unnecessary.

“We are struggling with this problem. Since January alone, we have seen more attacks more than often.”
Ige further explained that the last time the NNPC engaged “community services”, which involved using local people to protect the pipelines, was in 2012.

“True, we have technological solutions, but response is where the difficulty lies. Often, when we discover attacks on pipelines in very remote locations, it is hard to mobilise resources to such locations in real time due to the remote nature of the location.

“That is why we need to have partners on the ground, within the communities, who provide the physical presence. But the last I know of such an an arrangement was in 2012, ” he added.

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