Banks loaned N130bn to Operators in the downstream, natural gas, and crude oil refining sectors of the Nigerian oil and gas industry in February due to the significant rise in global crude oil prices.
The debt owed by the oil and gas companies increased to N4.05tn in February from N3.92bn in January, from the latest data obtained from the Central Bank of Nigeria on Monday.
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Operators in the upstream and services sub-sectors owed banks N1.26tn in February, down from N1.27tn a month earlier.
The debt put together which is N5.31tn owed by oil and gas firms as of February 2021 represents 25.29 percent of the N21tn loans advanced to the private sector by the banks, according to the sectoral analysis by the CBN of deposit money banks’ credit.
Oil and gas firms got the biggest share of the credit from the deposit money banks to the private sector.
The fall in oil prices in 2020 as a result of the coronavirus pandemic hit many oil and gas companies hard, forcing them to slash their capital budgets and suspend some projects.
A global credit rating agency, Moody’s Investors Service, said last month that the outlook for Nigeria’s banking system remains negative, showing expectations of increasing asset risk and weakening government support capacity over the next 12 to 18 months.