Shell Nigeria Exploration and Production Company (SNEPCo) has teamed up with nine Nigerian banks to launch a $3bn contract finance facility to boost credit for local oil and gas contractors working on its projects.
Unveiled on Thursday, the scheme will give credit support in both naira and US dollars. The participating banks are First Bank, Guaranty Trust Bank, Zenith Bank, Access Bank, United Bank for Africa, Stanbic IBTC, Standard Chartered Bank, First City Monument Bank, and Fidelity Bank.
At the signing of the Memorandum of Understanding in Lagos, SNEPCo Managing Director Ronald Adams said the move fits the aims of the Nigerian Oil and Gas Industry Content Development Act and helps keep value in the country.
“The initiative reflects the spirit of the Nigerian Oil and Gas Industry Content Development Act, which is aimed at in-country value retention. Our partner banks offer capital and discipline.
“SNEPCo brings contracts and domiciliation of payments that de-risk lending.
“On their part, the contractors provide performance. Each is accountable to the others, and the mutual accountability gives the arrangement its strength,” he said.
CJ Akwaeze, Shell Nigeria’s Vice President, Finance, said the scheme shows Shell’s commitment to growing oil and gas operations in Nigeria. The Chairman of the Petroleum Technology Association of Nigeria, Wole Ogunsanya, represented by Dr Joan Faluyi, called the facility a major boost for indigenous contractors and lauded it as a “gateway to unlocking contractor financing issues, which will also drive efficiency in contract execution.”
Bank representatives praised SNEPCo for the arrangement and pledged support. SNEPCo noted 43 wholly Nigerian firms took part in earlier maintenance at the Bonga FPSO out of 53 firms involved, and said the new facility will strengthen local capacity and value delivery for Nigeria’s leading deepwater producer.
