Oil Sector Receives N3.42 Trillion Credit From Banks
A gas flare burns at the Batan flow station operated by Chevron under a joint-venture arrangement with the Nigerian National Petroleum Corporation (NNPC) for the onshore and offshore assets in the Niger Delta region on March 26, 2018.
Owing to the stability in crude oil prices, the banking sector’s credit to the oil and gas firms has increased by 21.92 per cent to reach N3.42trillion during the first quarter (Q1) of 2018.
The amount is regarded as the highest credit allocation in Q1 2018, according to the National Bureau of Statistics (NBS).
This is however; lower than the N3.58trillion recorded during Q4 2017, and the N3.55trillion extended in Q3.
West Texas Intermediate traded for $68.78 a barrel, while Brent benchmark traded at $73.91/barrel during the trading hours on Friday.
Both Brent and West Texas Intermediate were trading up on Friday, supported by Iran nuclear sanctions issues that are set to come to a head on May 12, and falling production in Venezuela that is expected to continue.
The NBS report released at the weekend identified the Manufacturing sector with a credit of N2.07trillion to emerge one of the highest receipts of credit during the period under review.
The report stated that a total volume of 457,226,406 transactions valued at N32.48trillion were recorded in Q12018, as captured by data on Electronic Payment Channels in the Nigeria Banking Sector.
It noted that Automated Teller Machine (ATM) transactions dominated the volume of transactions recorded. “212,370,853 volume of ATM transactions valued at N1.568 billion were recorded in first quarter 2018. In terms of credit to private sector, a total of N15.60trillion worth of credit was allocated by the banks in first quarter 2018.
“Oil & Gas and Manufacturing sectors got credit allocation of N3.42trillion, and N2.07trillion to record the highest credit allocation within the period under review. As at first quarter of 2018, the total number of banks’ staffs decreased by -0.93 per cent from 90,453 in fourth quarter of 2017 to 89,608.”
Regarding financial transactions, Ernst and Young Global Oil & Gas Leader, Adi Karev, said the upstream sector will continue to see the highest number and value of deals.
He however, said there may be integrated companies looking to establish a presence in high-growth retail markets.