Many Nigerian banks are no longer keen on lending to oil and gas companies in the country despite the recent rally in crude prices in the global market, The Punch reports.
A former Team Lead, Oil and Gas Upstream, Diamond Bank Plc, Mr. Onome Atife, said, “I don’t think there will be any significant change in loan repayment because the prices were benchmarked then at, in the worst case scenario, $60 per barrel and the current price is still less than that.” Atife, who now does commercial banking at Fidelity Bank, said there would not be any significant change in oil firms’ ability to repay their loans, “unless the price rises above $60 per barrel and is sustained for some time.”
The Head of Energy Research, Ecobank Group, Mr. Dolapo Oni, said oil and gas loans rose to 28.78 per cent of total loans and advances by June 2016, compared to 23.78 per cent in June 2015 and 24.82 per cent in December 2015. “Most banks have since adopted a cautionary stance to oil and gas loans. The resumption of the Forcados pipeline, which has been down since February 2016, is a major factor that could however counter this stance as local oil companies become dollar liquid,” he said.