$7 Billion Debt at Nigerian Oil Companies Halts Most Local Bank Financing
Key Facts
Nigerian businessman Aliko Dangote said a small number of the country’s oil and gas companies owe banks about $7 billion, leaving most local bank financing for the sector stalled. He made the remarks on Wednesday during an executive session at the Nigerian Association of Petroleum Explorationists conference in Lagos. “I think a small number of companies owe banks about $7 billion,” he said. “As a result, most financing from our local banks has stopped.” The comments put the availability of domestic credit at the center of the debate over funding oil and gas activity in Nigeria.
Dangote said borrowing from banks in Nigeria is easier for companies than seeking financing abroad, making the halt in local funding a barrier to a source he sees as more accessible to Nigerian investors. “It is easier for them to get loans from local banks rather than go abroad,” he said. He did not name the indebted companies or disclose the terms of the debt in the available remarks, and did not describe the obligations as non-performing loans. He raised the financing halt while calling for local lending channels to reopen to the sector. He did not announce any banking or government decision to change financing policy.
Dangote urged the Central Bank of Nigeria and commercial banks to meet and explore ways to make local liquidity available to investors. The aim, he said, is to “work on making the large amount of local liquidity we have available.” The call links companies’ ability to finance projects with the role of local banks in directing funds to the oil and gas sector. He did not specify a lending mechanism or target financing amount, or set a timetable for action. His remarks suggest that, in his view, addressing the financing halt requires coordination between the central bank and commercial lenders.
Dangote said Nigeria needs additional investment to expand exploration, develop new reserves and increase production. He linked attracting that investment to stable policies and public finances, regulatory transparency and ease of doing business. This places investment conditions in a broader context than credit availability alone, including the regulatory and financial environment in which companies operate. He did not specify the amount of investment needed or a timetable for these priorities. His call comes as he describes the sector as facing a halt in most local bank financing.
The sector’s banking backdrop includes high exposure by banks to oil and gas, although that share declined in the second half of 2025. The Central Bank of Nigeria’s financial stability report showed exposure at 28.63% of total loans at the end of December 2025, compared with 29.79% at the end of June that year. In oil activity, the Nigerian Upstream Petroleum Regulatory Commission said average crude and condensate production was 1.717 million barrels per day in September 2026, up 2.34% from August, while crude production alone was 1.53 million barrels per day. Reliable public figures for October 2026 production were not available in the information at hand. The commission also reported that more than 127 million barrels of Nigerian crude went to local refineries during the first three quarters of 2026.
Commission data point to continued licensing and drilling activity alongside calls for greater investment. From the start of 2026 through November 10, the commission approved 595 well re-entry applications, 145 new drilling operations and 39 field development plans. It said the number of rigs in the country exceeded 100, including about 46 engaged in drilling, and that the total had increased by more than 300% compared with 2021. It also said multi-client seismic survey companies had invested more than $100 million in seismic data collection in Nigeria during the three years since the Petroleum Industry Act was enacted. These figures provide context for Dangote’s remarks on the need to fund exploration and reserve development.
On manufacturing, Dangote urged Nigeria to process more of its resources locally, produce a larger share of the goods it consumes and build industries able to compete regionally and globally. “I want the country to process more of its resources and manufacture more of the goods it consumes,” he said. This presents industrial expansion as part of his vision for a sector that goes beyond crude oil exports. The 44th annual Nigerian Association of Petroleum Explorationists conference is scheduled to conclude on November 12, 2026, after running from November 8 to 12 at Eko Hotel Lagos. Dangote did not set a date for the talks he called for with the central bank and commercial banks.