Oil and Gas industry tops bank credit allocation for 2021 — NBS

Banking sector data from the October 2022 report from the National Bureau of Statistics  (NBS) says the oil and gas industry was one of the top credit allocations for private sector businesses in 2021.

The total credit allocated to the private sector in Q1 2021 stood at N62.28 trillion, For Q2 2021, Total credit allocation increased by 5.64 per cent to N65.79 trillion.

The Q3 2021 credit allocations to the private sector increased by 2.33 per cent, showing a total of N67.33 trillion.

Total credit allocation for Q4 2021 increased by 6.52 per cent, showing a total of N71.71trn. The oil and gas industry topped all quarters with the highest bank credit allocation, overriding the manufacturing and general services sectors.

In the report, credit allocations for the oil and gas industry were at N11.97 trillion (19.22 per cent), the highest when compared to the manufacturing sector at N9.82 trillion (15.77 per cent) and the general services industry at N5.55 trillion (8.92 per cent).

Bank credit refers to the amount of credit available to a business or individual from a banking institution in the form of loans. Bank credit, therefore, is the total amount of money a person or business can borrow from a bank or other financial institution.

In the NBS data, it was stated that for Q1 2021, the oil and gas industry attracted N11,967,670.27, while the power and energy industry attracted N1,358.850.52.

Meanwhile, for Q1 2021, the oil and Gas services sector attracted N3,820,783.94, while the Power and Energy services sector recorded N981,189.94.

In Q2 2021, the Oil and Gas industry attracted N12,335,594.62, while the Power and Energy industry attracted N1,483,310.17. The Oil and Gas services sector recorded N4,050,303.01, while the Power and Energy services sector recorded N1,101,896.91.

In Q3 2021, the Oil and Gas industry attracted N12,316,702.97, and the Power and Energy industry attracted N1,487,046.10. The Oil and Gas services sector showed N3,958,846.89 and the Power and Energy services sector recorded N1,021,668.77.

In Q4 2021, the Oil and Gas industry attracted N12,480,988.03, and the Power and Energy industry attracted N1,533,934.92. The Oil and Gas services sector showed N4,229,460.07 and the Power and Energy services sector recorded N1,034,088.50.

Financing is a huge aspect of industry growth in the Oil and Gas as well as Power and Energy sectors. In Nigeria, there are several energy projects being developed in order to increase energy access for all, and sustainable financing is needed in order to execute those projects.

It is important to note that oil and gas will remain a core part of the global energy mix for the foreseeable future. So, companies will need to develop proactive and transparent sustainability strategies that maintain their license to operate in their traditional business.

In its 2020 fuel report, the International Energy Agency (IEA) notes that the Oil and Gas business is a necessary part of the future due to growing energy demand.

The report states that the prospect of rising demand for the services that energy provides is due to a growing global population, some of whom remain without access to modern energy, and an expanding global economy.

“The recognition that oil and natural gas play critical roles in today’s energy and economic systems, and that affordable, reliable supplies of liquids and gases (of different types) are necessary parts of a vision of the future,” the report said.

Recall that Nigeria’s leading oil and gas companies earned a whopping sum of N625.075 billion as revenue in the half year of 2022, outpacing their earnings in the corresponding period of 2021 of N444.254 billion.

Due to oil and gas business performance, credit rating agency, Agusto & Co noted that, “The growing demand for petroleum products is upheld by continued urbanisation in addition to the expansion of the domestic and international air travel industry.”