Oil companies have bank debt of 5.93 billion naira, amid losses and thefts – CBN

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Corporate Governance in Nigerian Banks

Recent data from the Central Bank of Nigeria revealed that combined bank borrowing from oil companies operating in the downstream and upstream sub-sectors of the Nigerian oil and gas industry was N5.93 billion in June 2022,

While operators in the downstream, natural gas refining and crude oil subsector owed banks N4.28 billion, operators in the upstream and services subsectors were indebted to banks to the tune of N1. .65 billion naira.

This shows an increase of 250 billion naira from the total debt of 5.68 billion naira in December 2021.

Read also : Undisbursed loans raise Nigeria’s World Bank debt to $21.15 billion

The Petroleum and Natural Gas Senior Staff Association of Nigeria sounded the alarm in March over the huge losses suffered by operators in the oil and gas industry as a result of vandalism and oil theft.

PENGASSAN Chairman Festus Osifo said that between October 2021 and February 2022, more than 90% of crude oil pumped into the Trans National Pipeline by operators was vandalized.

This, he noted, has caused Nigeria to lose more revenue despite the current high price of crude oil in the international market.

Osifo said another issue stemming from vandalism was that companies were forced to curtail operations when export assets/pipelines were damaged as they could not export what they were producing, thus leading to production losses. .

According to him, each operator in the sector loses an average of 10 days of production stoppage per month due to vandalism.

He said: “Recent preliminary work has shown that approximately 150 illegal taps were used to siphon crude oil from TNP.”

In order to offset rising costs, he said companies in the sector had been forced to turn to financial institutions.

He added, “The cost of operating oil and gas companies, both those in the downstream and upstream sub-sectors, is currently very high, particularly due to vandalism and security issues.

“You will see that due to insecurity issues, many of these companies, both onshore and offshore, employ the services of extensive security personnel to protect their equipment. Sometimes even their personnel must be secured.

“This extra security is very expensive, and it affects their bottom line. On the issue of vandalism, I have observed that many of these companies are harassed by their host communities, which is why they improve their CSRs and give back to those communities.

Earlier this month, the House of Representatives denounced the growing wave of oil thefts in Nigeria, warning it could anchor the economy if left unchecked.

The House Minority Caucus, in a recently released statement, expressed alarm at the massive oil theft in Nigeria.

It was reported recently that the Federal Government has awarded a pipeline monitoring contract to the former leader of the Movement for the Emancipation of the Niger Delta, the Ekpemupolo government, popularly known as Tompolo, to help reduce the level of oil theft and pollution caused by bunkering activities in the region.

Additionally, in an effort to reduce oil theft and pollution caused by bunkering, the federal government recently assigned the former leader of the Movement for the Emancipation of the Niger Delta, the Ekpemupolo government, popularly known as name of Tompolo, a pipeline monitoring contract to help the region. .

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