Reserve-Based Lending In Nigeria

Overview

2015 was a relatively active year for financing transactions in Nigeria's oil and gas sector. As well as facilities to fund the development of oil and gas assets, a significant number of facilities were provided to Nigerian companies to finance their acquisition of oil and gas assets. Most of the assets purchased were onshore oil and gas assets divested by international oil companies (IOCs).

Two main factors drove IOCs to dispose of their onshore oil and gas assets:

• IOCs wanted to reduce their risk exposure to onshore oil and gas operations. Risks include legal and reputational risks resulting from environmental disputes, economic losses resulting from oil theft, increased security costs and liabilities associated with maturing assets;