Vandalism: Oil Firms’ Bank Borrowing Hit N5.68tn
The Central Bank of Nigeria report has revealed that total bank borrowing of oil firms in the downstream and upstream sectors of Nigeria’s oil and gas industry increased by $490 billion from N5.19 trillion in January 2021 to N5.68 trillion in December 2021.
According to data from CBN, operators in the downstream, natural gas and crude oil refining subsectors had borrowed N290bn from Nigerian banks in 2021 amid the significant rise in global crude oil prices.
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The debt owed by the oil and gas companies rose to N4.21tn in December from N3.92tn in January 2021,
A total of N5.68 trillion owed by oil and gas companies worldwide (upstream and downstream) as of December 2021 represents 23.3 per cent of the N24.38 trillion advanced to the private sector by the nation’s banks.
Meanwhile, the Petroleum and Natural Gas Senior Staff Association of Nigeria 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.
Festus Osifo, the President of PENGASSAN, says between October 2021 and February 2022, over 90 percent of crude oil pumped into the Trans National Pipeline by operators was vandalised.
He noted that this had made Nigeria lose out on accruing more revenue in spite of the current high price of crude oil in the international market.
As a result of vandalism, Osifo says companies are often forced to curtail production when assets/export pipelines are damaged, since they cannot export what they produce.
Adding that, each operator in the sector loses an average of 10 days of production shut-in monthly due to vandalism.
“Recent preliminary work showed that about 150 illegal tapings 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,” he noted.
