Baru says Nigerian banks more involved in upstream oil sector financing

The Nigerian National Petroleum Corporation, NNPC, Monday, disclosed that currently, Nigerian banks are deeply involved in providing funding for the upstream sub-sector of the petroleum industry.
In a statement , Maikanti Baru, Group Managing Director of the NNPC, noted that the banks are increasingly becoming involved in the upstream because of the corporation’s adoption of the alternative financing models for funding its Joint Venture, JV, obligations.
Baru, who stated this at the 42nd Society of Petroleum Engineers, SPE, Nigerian Annual International Conference & Exhibition, NAICE, declared that the alternative financing models had gone a long way in restoring confidence among investors and had also stimulated further Foreign Direct Investments, FDI, in the oil and gas industry.
According to him, alternative financing had deepened local banks’ participation in the upstream sub-sector of the industry. He observed that traditionally, Nigeria had raised funds utilising equity or self-funding from cash-flow, commercial debt instrument or partner funding in form of Carry or Modified Carry Arrangement (MCAs).
He identified the non-traditional funding options to include contractor-financing/deferred payment, Pension Funds, Private Equity, Sovereign Wealth Funds, Export Credit Agencies (ECAs) and none-less Islamic/Sharia Finance.