Thursday, 3 September 2015

MOBIL CEO REVEALS WHY PETROLEUM INVESTMENT IS AT ITS EBB

The Managing Director of Mobil Oil Nigeria Plc, Mr. Tunji Oyebanji, has attributed the low investment in the oil and gas sector to the refusal of banks to give loans to fund critical and sustainable projects, growing cost of operation in the petroleum sector and high exchange rate.

The Mobil boss made this know while speaking with the best-selling and most sought after business news and articles publishers, Tectono Business Review, after an oil and gas forum in Lagos recently. According to him, banks are very reluctant in advancing credits for certain oil and gas projects, after appraising the situations in the petroleum industry especially the capability of operators to pay back the loan.

In his own words: “With exchange rate of naira to dollar reaching N230 at a time before it came down to N198 per dollar, it is obvious that local operators would find it difficult to operate in the country. The cost of procuring machineries abroad for projects that are going to be executed in the country is high and unsustainable. Banks compounded the woes of operators by not giving them the required facilities or credits. The adverse effect of these problems on industry is absence of new investments.”

Mr. Oyebanji said major oil marketers were battling with huge interest rates charged on the loans they collected to finance the importation of petroleum products into the country and attributed the rise in cost of subsidies paid to importers of fuel to interest rates, adding that the non-payment of subsidies is affecting their operations.

The Mobil Oil CEO also attributed the challenges bedeviling the operation of marketers to product adulteration, saying that there were cases where some Nigerians adulterate petrol by mixing it with kerosene.

He stated that the development was affecting their business. He mentioned cases of adulterated petrol in Port Harcourt, the Rivers State capital and other states in the country, stressing that the only way to have a fixed price regime in the industry was when a team is set up to enforce it. According to him, marketers are selling prices of petroleum products are at different prices and that the idea does not augur well with the industry.