Coronavirus: Indigenous oil producers and banks panic over N1.6trillion loan

Nigeria’s indigenous oil and gas producers as well as several Deposit Money Bank (DMB) operations may be heading towards a near collapse following  the inability of the companies to meet their debt service obligations to the DMBs since the outbreak of the Coronavirus pandemic in the country.
The oil and gas companies failure to service their debt may have been exercebated with the prevailing regime of low oil prices occasioned by the global coronavirus pandemic.
According to a recent Central Bank of Nigeria (CBN) financial stability report, commercial and merchant banks loan exposure to the oil sector is estimated at about N1.6 trillion.
A source in one of the third generation banks who proffered not to be named, admitted that the banks’ exposure to indigenous operators was a source for concern in view of the crashing oil prices with no signs of improvement any time soon.
He said the banks are already in discussion with some of its customers in the oil and gas sector to work out modalities on moratorium and loan restructuring in the face of falling oil prices.