Pipeline infrastructure: NNPC needs N474bn for upgrade

Group Managing Director, Mr. Andrew Yakubu, has said that the Nigerian National Petroleum Corporation needs close to $3bn (N474.15bn) to upgrade its depots and refineries’ pipeline infrastructure nationwide.

In a presentation titled: ‘Energy Industry Deregulation: The Prospects and Challenges of the Economy,’ Yakubu said close to $3bn would be required to upgrade the pipeline infrastructure. The NNPC boss, who was represented by the Group Executive Director and Coordinator, Corporate Strategy and Planning, Dr. Timothy Okon, called for the total deregulation of the energy industry, while also stressing the need to mobilize private sector investment in downstream infrastructure development.

He said the move would stimulate competition across the value chain and free huge resources of government for more productive national development programme.

According to him, incessant vandalism has rendered the Pipelines And Products Marketing Company Limited’s pipelines and storage depots inoperable. He, therefore, stressed the need to secure the pipeline infrastructure using a dedicated strategic national infrastructure protection squad, adding that any offender should be tried in accordance with the provisions of the Petroleum Product Distribution Anti-Sabotage Act, 2004.

Shell spent $383 million on security in Nigeria

Royal Dutch Shell spent almost 40% of its $1 billion global security budget between 2007 and 2009 in Nigeria, a pressure group, Platform, has said. The London-based body monitoring the oil and gas industry added that much of the money went to Nigeria’s security forces, which it described as corrupt. The oil major, according to Reuters news monitored by Nigeria Energy Intelligence, spent $383 million protecting its staff and assets in the Niger Delta region during the three-year period, according to company figures leaked to Platform.

Shell did not confirm the figures, but said it had to spend heavily because of the security threats. According to Shell Nigeria spokesman Precious Okolobo, “we have always acknowledged the difficulties of working in countries like Nigeria. Protecting our people and our assets is Shell’s highest priority,” adding that “the period this report refers to, the armed militancy in the Niger Delta was at its height, requiring a relatively high level of security spending there.”

Sabotage of oil infrastructure and the kidnapping of foreign oil workers have been common in the vast oil-rich mangrove wetlands of the Niger Delta in recent years, and although an amnesty for militants in 2009 reduced violence, massive oil theft persists.

Shell said about 150,000 barrels per day (bpd) out of Nigeria’s more than two million bpd oil output capacity is still being stolen by gangs who tap into pipelines and siphon off oil, some of which is sold into international markets.

But the funding of the Nigeria Police and military by Shell, the largest operator in Africa’s biggest energy industry, has brought criticisms from rights groups, who have also attacked its lack of progress on cleaning up decades of oil spills.