Financing options in the oil and gas sector in Nigeria

This article examines the financing options in the oil and gas sector of Nigeria and acknowledges the important role of oil and gas to the Nigerian economy in terms of generating the bulk of government revenue, which is estimated to be over 70 per cent of the total revenue. It also identifies the regulatory framework for the oil and gas sector and captures the various forms of financing and securities taken by major financiers like local and foreign banks, as well as international financial institutions. This article is necessitated by the various challenges besetting oil and gas financing in Nigeria, such as the technicalities and the substantial capital outlay required for such financing, the sabotage of oil and gas equipment and installations, which may jeopardise the collateral securities taken by financiers, the relatively low knowledge of the concept of reserves-based lending, which accepts ‘oil in the ground’ as collateral, lack of equity contributions, high cost of security documentation, the rigo...