BUSINESS DAY
The Nigerian government is counting on oil to help shore up the value of the battered naira, and industry operators say it must decisively tackle insecurity, the sabotage of oil assets, and regulatory issues to achieve this objective.
The country’s oil and gas sector, which has generated a significant chunk of government revenue and foreign exchange earnings for many years, is teetering and in desperate need of rescue.
The naira has plunged to record highs against the dollar and other major currencies following recent economic reforms, and the government is struggling to ramp up FX inflow, which is being crimped by low oil production.
Heineken Lokpobiri, minister of state for petroleum resources (oil), told journalists last week that the government’s “target is to see how we can get to 2 million barrels per day and beyond by the end of the year,” saying insecurity was the bane.
A local oil producer told BusinessDay that during the past two months, the Trans Niger Pipeline (TNP) has been down twice and the only recourse for oil producers is to shut in production to avoid the kinds of losses they saw the previous year.
The TNP is a major crude oil transportation pipeline in the Niger Delta region, operated by the Shell Petroleum Development Company and the Nigerian National Petroleum Company Limited (NNPC). It spans approximately 180 kilometers (112 miles).
Earlier this year, over 400 illegal connections were discovered and removed from the pipeline and by May, it reported no losses at all. Since then, operators say the illegal connections are back despite the incorporation of private security operators to support security operatives.
Last month, President Bola Tinubu renewed the contract of Tantita Security Services to continue protecting the pipelines in Ondo State from vandalism but analysts are asking for more security for the oil infrastructure as this will open the sector for investments.
Security for oil assets, many analysts say, has not been treated with the seriousness it deserves, considering that it is responsible for the nation’s revenue. Militants routinely kidnap oil workers, especially expatriates and sabotage of oil pipelines occurs too frequently to absolve government officials including security personnel of collusion with criminals.
READ THE FULL STORY IN BUSINESS DAY
