A study carried out on the operational status of the over 5,000 kilometres of pipeline network belonging to the Nigerian National Petroleum Corporation, NNPC, across the country, has revealed that the pipeline network would need $12 billion to be replaced or $1.1 billion to be fixed.
Sponsored by the United Kingdom-funded Facility for Oil Sector Transparency and Reform in Nigeria, FOSTER, for the NNPC, the study was aimed at outlining an intervention plan to transform government-owned downstream oil pipelines into a proper business with incentives to attract private sector participation.
The report stated that product losses from vandalism on pipelines owned by the NNPC, as well as costs incurred by the corporation to repair them have been enormous, and suggested that they be segmented for either privatisation or commercialisation.
The study equally did a comparative study of pipeline commercialisation models for possible adoption, along with policy recommendations developed for commercialisation with guidelines for implementation.
However, the report did not cover the extensive upstream crude oil pipelines owned by oil producing companies and downstream gas pipelines in its study.