By MICHAEL EBOH

Three major downstream oil firms in Nigeria — OandoPlc, Forte Oil Plc, and MRS Oil Nigeria Plc, borrowed a total of N304.67 billion in 2012, to finance among others, products importation, operations, and aircraft acquisition.

This is about 15.9 per cent of the total exposure of N1.913 trillion to banks in the country recorded in 2012.

According to data obtained from the 2012 Annual Reports of the three oil companies, Oando borrowed about N289 billion, MRS N21 billion, and Forte Oil N2.314 billion.

The Nigerian Deposit Insurance Corporation, NDIC, in its Annual Reports and Accounts 2012, disclosed that as at the end of the year, the exposure of oil and gas firms to banks in the country stood at N1.913 trillion, compared with the N1.53 trillion in 2011.

The Asset Management Corporation of Nigeria, AMCON, and the Central Bank of Nigeria, CBN, had in 2012 ordered banks and other financial institutions to stop extending loans to oil firms as well as individuals and organisations who were indebted to banks to the tune of N5 billion and above.

The CBN/AMCON went further to list some 20 oil and gas firms, which owed banks about N705.885 billion while five power firms owed N114.928 billion.

Oando’s aircraft

In its 2012 financial statement, Oando said it borrowed N288.9 billion from banks and other sources in the course of its business operations to finance its oil well activities, gas pipeline projects, and the acquisition of an aircraft.

The amount is 40.23 per cent higher or N82.88 billion more than the N206.02 billion it borrowed in 2011.

The Oando Report, which was approved by its shareholders a couple of weeks ago, broke the borrowings into Non-current and Current items. In the first category, bank loans amounted to N75.22 billion, dropping from N83.37 billion in 2011, while under Current, the loans amounted to N120.92 billion; bank overdraft — N48.538 billion and other third party debts — N44.202 billion.

Also, the report revealed that the loans were denominated in three currencies – N189.302 billion, US$98.81 billion, and 775,472 West Africa CFA.

The borrowings also included secured liabilities of about N51.2 billion and a convertible bond of N2.5 billion issued to Ocean and Oil Investments Limited, which was later restated upon a query by the Nigerian Stock Exchange, NSE.

Broken further, the sum of N2.034 billion was used by Oando to finance the acquisition of an aircraft compared to N1.46 billion used for the same purpose in 2011.

The company used N1.157 billion to fund its Greater Lagos III gas pipeline project for Gaslink; while N15.527 billion was expended on activities on the Oil Mining Lease,OML13.

Also, the sum of N3.11 billion went into the upgrade of Oando Energy Services rig; N17.8 billion for Unicem gas pipeline project by Horizon Gas Company; and N3.4 billion for the Akute Independent Power Project.

MRS, Forte Oil

MRS in its report said the N13.46 billion borrowed in 2012, is down by about 36 per cent of the N21.003 billion borrowed in 2011.

The borrowings are broken down into: Bank Overdraft N1.414 billion, and bank borrowings N12.046 billion used to finance imports.

According to the report, total lines of credit available to the company amounted to N11.5 billion, compared to N25.50 billion in 2011, while interest rates on these facilities ranged between 15 per cent and 20 per cent per annum.

The company further stated that the net interest expense incurred in the year amounted to N294.76 million, compared to N269.73 million in 2011. It also stated that the facilities are either secured with products financed, domiciliation of the Petroleum Products Pricing Regulatory Agency, PPPRA payments, or its sinking fund account with a balance of N8.9 billion as at year end.

Forte Oil, on the other hand, borrowed N2.314 billion in 2012, down from N4 billion in 2011. The sum was used finance lease liabilities of N2.194 billion and unsecured bank loans of N120.286 million.