18 March 2015, Abuja – Indigenous and independent oil companies, yesterday, derided banks and financial institutions in the country for their reluctance to lend to local operators in the sector.
However, a representative of one of the banks 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 the banks.
Speaking at the ongoing 2015 Nigeria Oil and Gas (NOG) Conference and Exhibition in Abuja, Mr. Ademola Adeyemi-Bero, Managing Director/Chief Executive Officer, First E&P Limited lamented that the paucity of funds is hindering independents from growing their production capacity.
According to him, the limitations placed on banks’ lending to the oil sector by the Central Bank of Nigeria, CBN, is 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 ban ks 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.”
However, Mr. Herbert Wigwe, Group Managing Director Access Bank Plc, said that Nigeria banks have always been willing to lend to the oil sector, especially as the banks have over the years, shored up their capital base, putting them in a better position to advance huge funds to the sector.