After 43 years, NNPC submits first budget to N’Assembly

On Thursday, Nigeria’s House of Representatives, praised the Nigerian National Petroleum Corporation for presenting its budget to the National Assembly for the first time.

This was just as the Group Managing Director, NNPC, Mele Kyari, told the House that all the refineries had been shut down as vandals, thieves and weakness of the pipelines were frustrating supply of crude to the facilities.

Kyari also told the House that all the pipelines supplying commodities to the depots across the country had been shut due to security reasons.

The NNPC had earlier in June 2020 made history by publishing its audited financial statements for the first time since 43 years of its existence.

Kyari made the revelations when he appeared before the joint House Committees on Petroleum Resources (Upstream, Downstream and Gas) for budget defence.

Earlier, Chairman of the joint committee, Musa Sarkin-Ada, in his opening remarks, noted that the passage of the Petroleum Industry Bill for second reading on Tuesday by the House, without controversy, was a good omen.

He said, “Let me salute all of us for today’s milestone; milestone that we must cherish together with the GMD NNPC.

“Day before yesterday, the House achieved a milestone by the passage of the PIB for second reading without any hindrance.

“We have all been witnesses to what has happened in the last 13 years. PIB was submitted five times to the parliament.

“Most of the time when it came, it was dead on arrival, except when it came from a private member bill from the Senate, which was not assented to by the President, which was as good as not born.

“Going by what had happened initially, most of the problems came from the NNPC. They considered PIB as something that could undermine them and take away what they call privileged rights.”

Kyari, while responding to questions from the lawmakers, especially on pipeline security and maintenance cost, “Today, we have over 5,000 kilometres of pipelines.

“We have 12 fuel depots. I can tell you today that except the Atlas Cove-Mosinmi-Ibadan line and the Port Harcourt-Aba line, none of these pipelines is active. None.

“We cannot flow products into these lines and the reason is very simple. The cheap one is to say they have aged but that is a very insignificant reason.

“The real reason is that the level of vandal activities on these lines, on all the pipelines, without exception, is gross, monumental and profound.”

The NNPC boss recalled that in 2019, from January to June, Nigeria lost petroleum products worth about N43bn on one line within six months. He said the loss had been reduced to less than N3bn.

Responding to a question on current state of the country’s refineries, Kyari said the facilities had been shut down due to the inability of the current pipeline structure to service them.

He said in part, “As I speak to you, we deliberately shut down all the refineries – all the three – because it does not make any further sense to continue to operate them for two reasons: we are unable to supply crude oil to the refineries.

“Except the Escravos-Warri line which we managed to sustain through this contracting process that we have, and Bonny-Port Harcourt refinery, it is practically impossible to run these pipelines at their optimum capacity.

“The lines, as a result of the acts of vandals and thieves of all sorts, anytime we attempt to pump more than 110000bpd into the Escravos-Warri line, the line gives up. Therefore, you cannot practically operate Kaduna and Warri refineries with the current structure of the pipelines.”