Indigenous oil and gas companies have raised alarm over the reluctance of banks and financial institutions in the country to lend to local operators in the oil and gas sector.
Notable indigenous companies in a panel session yesterday at the ongoing 2015 Nigeria Oil and Gas (NOG) Conference and Exhibition in , lamented that the resistance by banks was hindering their ability to grow their production capacity.
Managing Director/Chief Executive Officer, First E&P Limited Mr. Ademola Adeyemi-Bero, said the limitations placed on banks’ lending to the oil sector by the Central Bank of Nigeria (CBN) was seriously hindering the companies from the much needed funding for their operations.
He said, “We need funds to grow our production capacity, taking these funds from foreign banks will not make good dynamics. Government should look at the policies it is putting in place especially in the area of banks’ lending to the sector. We need government to walk us through this tight rope of financing.”
He, however, commended the banks for their support to the sector over the years, stating that over the last couple of years, Nigerian banks had been able to provide 70 per cent of the about $10 billion spent by indigenous operators in acquiring oil assets.
Speaking in the same vein, Mr. Seinye Lulu-Briggs, Executive Vice Chairman, Moni Pulo Limited, disclosed that despite the successes recorded by indigenous oil and gas operators, finance has remained a major challenge.
Lulu-Briggs, who was represented by Mr. Kayode Thomas, General Manager, Operations and Engineering, lamented the fact that majority of the banks are only interested in providing funds for producing assets, stating that no bank wants to fund exploration.
He said, “If you go to the banks asking for funds to finance your exploration activities, the banks will tell you to go and return after the field has started producing. What we are leaving out is that we cannot grow our reserves without exploration.”
He further noted that security has over the years presented a significant challenge to the oil and gas sector, stating that operators have to be creative in churning out solutions to address the issue.
However, speaking in defense of the banks, Mr. Herbert Wigwe, Group, Managing Director/Chief Executive Officer, Access Bank Plc, represented by Mr. Elias Igbinakenzua, Executive Director, in the bank, debunked the claims, blaming the indigenous operators’ inability to put in place good governance practices as the reason for their inability to attract funding from banks.
