The Central Bank of Nigeria (CBN), in its recent data, disclosed that the combined bank borrowing of oil firms operating in the downstream and upstream subsectors of the country’s oil and gas industry rose from N5.19 trillion in January 2021 to N5.68 trillion in December 2021, representing a 9.4%.
Having borrowed N290 billion from Nigerian banks in 2021 amid the significant rise in global crude oil prices, the debt owed by the oil and gas companies rose to N4.21 trillion in December from N3.92 trillion in January 2021, showing an increase of N490 billion.
Here’s why…
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) had in March raised the alarm over the huge losses incurred by operators in the oil and gas industry as a result of vandalism and oil theft.
The President of PENGASSAN, Festus Osifo said between October 2021 and February 2022, over 90% of crude oil pumped into the Trans National Pipeline (TNP) by operators was vandalised.
This, he noted, had made Nigeria lose out on accruing more revenue in spite of the current high price of crude oil in the international market.
Osifo said another problem arising from vandalism was that companies were being forced to go into curtailment when the assets/export pipelines were damaged as they could not export what they produced, thereby incurring production losses.
According to him, each operator in the sector loses an average of 10 days of production shut-in monthly due to vandalism.
He said, “Recent preliminary work showed that about 150 illegal tappings were used in siphoning crude oil from the TNP.
“This has forced all operators injecting crude into the TNP to suspend export/injection thereby shutting-in production. Total Energies and SPDC for example stopped production into the TNP pipeline while Agip Eni declare force majeure on their brass terminal.”
