By Ediri Ejoh

The Director of Petroleum Resources, DPR, Mr. George Osahan, has said that the banking sector is not capable of financing exploration in the oil and gas industry.

According to him, the banks have very low capital to be able to finance exploration in the country.

Speaking at the just-concluded 19th Offshore West Africa Conference, held in Lagos, Osahon, who was represented by the Assistant Director, DPR, Mr. Wole Akinyosoye, said that the recapitalisation scheme is a brilliant idea in the banking industry but still does not match the financing of the exploration and production, E&P projects.

He said, “Recapitalisation is very important but when you are talking about recapitalisation of the banks, it can only apply to some extent, breakthrough in production activities. Our banks are very low to be able to carry exploration.

“In terms of financing E&P activities, the country’s banking sector is very low, especially when you are talking about exploration. “There are three stages of development after discovery and the banks are not doing strongly to carry the industry along. They don’t have the muscle that we require for them to fill the gap in the industry.”

On local content, he noted that, indigenous companies have advanced a little bit forward. “The IOCs are divesting and most of the companies that are buying these blocks are independent companies.”

Specifically, he noted that the country have had some success stories in the oil and gas industry, saying, “Over the years, we have been able to come up with a crop of competent and technical set of Nigerians to run the fields, which was not so before now.

Also speaking, the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr. Ernest Nwapa, argued that the declining oil price is not new and therefore does not call for panic.He stated that when such as this time the best option that should drive the mind of the players is to be innovative rather than panicking.

In his words “there is no course for panic over the fall of oil price because oil price is something we are familiar about that goes up and down. When it goes down like this the option is to be innovative rather than panicking.

“However, Let us not threaten the progressive steps we have taken to bring about local content. Do not remove the small progress created especially in the local content point of view.