By Bola Kougbe
Some oil companies have allegedly sold off assets to pay bank loans taken from banks. The oil companies are believed to have landed in troubled waters due to the current economic problem in the country.
While inflation rate in the country is expected to rise by 20% in the first quarter of the year according to economic and financial experts, some bosses have taken the plunge to avoid more debts.
An executive member of the Independent Petroleum Marketers Association of Nigeria, IPMAN, told Vanguard that in the last seven months, he has been forced to sell two off his assets worth millions of Naira to settle bank loans. He explained that the current recession has made life difficult for him as the exchange rate of N490 to a dollar means that he has limited access to foreign exchange to import petroleum products.
“For over seven months now, business has been difficult. It is difficult to the extent that one is unable to import petroleum products due to scarcity of foreign exchange. You are aware that a dollar exchanges for N490. We were told that the official rate is N315. I am yet to see anybody who gets it at that rate. Some of us are being put out of business. To be frank with you, I have sold two of my assets to offset bank loans. The situation is terrible I must confess”, he said.
Another Chief Executive Officer of an oil servicing company who prefers to be anonymous said that the situation is excruciating for indigenous companies.
He said, “The service companies are challenged. They service the exploration and production companies, E&Ps. If the E&Ps are not working, what will they be servicing? How will they come to service? I have a contract service with Shell for one year to provide access for maintenance facilities for them, but we have not been called to provide any. No work is going on now. I borrowed money, acquired equipment, in fact I gave instruction that some of our assets can be sold to be able to pay our debts. I am a direct participant in that programme.”
