$7 Billion in Oil Debt Has Nigerian Banks Holding Back Lending

A few Nigerian oil and gas companies owe local banks about $7 billion, and the fallout is reaching well beyond those borrowers, according to billionaire Aliko Dangote.Most domestic bank financing for the industry is now on hold, Dangote told the Nigerian Association of Petroleum Explorationists conference in Lagos Wednesday.“A few companies, I believe, owe the banks about $7bn,” he said. “As a result, most funding from our domestic banks is on hold.”Dangote offered no names or breakdown of the debt, nor did he say how much was overdue.Nigeria has some ambitious plans for its oil industry. The government wants crude production at 3 million barrels per day by 2030. The latest numbers, released Wednesday, put October output at 1.51 million bpd, down from 1.53 million in September.Nigeria produced just enough crude in October to meet its 1.5 million-bpd OPEC quota, something it has now managed for six consecutive months. Dangote wants to see considerably more production than that. He called the government’s 3 million-bpd target for 2030 too modest, pointing out that Nigeria once had its sights set on 4.2 million bpd by 2024.That target came and went, with production nowhere near it.The Nigerian Upstream Petroleum Regulatory Commission is offering 40 blocks in its 2026 licensing round, saying last month that 22 recent awardees were expected to bring at least 250,000 bpd online within five years.Dangote sees the need for more exploration and local technical expertise and has called for fewer surprises from policymakers. He is also pressing banks to extend more credit to Nigerian-owned operators so they don’t have to chase foreign financing.His 650,000-bpd refinery outside Lagos carried 7.9 trillion naira, about $5.8 billion, in debt at the end of June, after reducing the balance by 798 billion naira in the first half.The refinery’s recent share offering drew 5.85 trillion naira in applications from nearly 3.8 million investors. Dangote did not say whether his refinery’s borrowing was included in the $7 billion industry debt figure.By Julianne Geiger for Oilprice.comMore Top Reads From Oilprice.comFusion's Next Race Is Over Superconducting Tape, Not PlasmaGlobal Power Grid Expansion Surges 50% to Record HighBrent Briefly Hits $94 After Trump Says U.S. Has No Need for Iran Deal