The debts owed by oil and gas companies to Nigerian banks rose by N90bn in the second quarter of this year to nearly N5tn as many operators struggle to stay afloat in the face of depressed prices and demand, PUNCH reports.

Nigerian banks saw their credit to oil and gas companies rise to N4.95tn as of June this year from N4.86tn in March, with more than five per cent of the loan said to have gone bad.

The N4.95tn represents 26.30 per cent of the N18.82tn loans advanced to the private sector by the banks as of the end of June, according to data obtained from the National Bureau of Statistics.

Oil and gas firms, which received the biggest share of the credit from the banks, increased their debts by N370bn in the first half of this year from N4.58tn in December 2019.

Oil firms operating in the downstream, natural gas and crude oil refining subsectors owed N3.62tn as of June, up from N3.60tn in March, while those in the upstream and services subsectors owed N1.33tn, up from N1.26tn.

The NBS data also showed that N268.79bn of the loans advanced by banks to the oil firms were recorded as non-performing as of June.

The recent collapse of global oil prices and demand on the back of the COVID-19 pandemic has continued to take a huge toll on operators in the nation’s oil industry, triggering job losses and suspension of projects.

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