Many oil and gas workers may ‘lose their jobs’ over COVID-19

Abiodun Adesanya, a former vice-president of the Nigerian Association of Petroleum Explorationists (NAPE), has called on the federal government to mitigate “imminent liquidation” of indigenous crude oil producers caused by falling oil prices globally and the inability to meet loan obligations to Nigerian banks.

In a statement on Thursday, Adesanya said the federal government, through the Central Bank of Nigeria, can champion interventions like moratorium on debt repayments which will be applied on both principal and interests on loans taken by the local players from Nigerian banks for a considerable period

He said this would help the oil and gas companies recover as the oil prices would take some time to rebound even after the COVID-19 pandemic.

Adesanya said unless CBN intervenes, there may be issues of systemic shocks in the Nigerian banking system, posing threats to depositors’ money and hindering the effective functioning of the banks in their role in the country’s economic recovery.

“This exposure may also lead to massive job losses in the oil and gas sector as a number of the indigenous players may not survive the present shock without assistance from the government,” he said.

“The debt default issue in the face of the current turmoil in the crude oil market also threatens the gains of this administration and successive ones in implementing the local content policy which has given opportunity to indigenous companies to significantly play in the local oil and gas sector.

“Mitigation efforts on the inherent risks to the economy should look at what was done or not done during the 2015 – 2017 price crash since the same scenario is playing out once more.

“Non-involvement of government in the oil industry exposure of 2015 – 2017 had a negative impact on both the companies and on the economy.”