A new $3 billion Contract Finance Facility, launched by Shell Nigeria Exploration and Production Company in partnership with nine Nigerian banks, is designed to give local oil and gas contractors easier access to credit in both naira and US dollars.
The participating banks, 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, sat alongside Shell at the signing of the memorandum of understanding in Lagos. SNEPCo Managing Director Ronald Adams described the arrangement as a three way system of mutual accountability that reflects the spirit of the Nigerian Oil and Gas Industry Content Development Act: the banks bring capital and financial discipline, SNEPCo brings contracts and payment domiciliation that reduce lending risk, and contractors are expected to deliver performance in return, with each party answerable to the others. Shell Nigeria Vice President of Finance C. J. Akwaeze said the scheme reflects the company’s broader commitment to growing oil and gas operations in Nigeria.
Petroleum Technology Association of Nigeria Chairman Wole Ogunsanya, represented by the association’s Publicity Secretary Dr Joan Faluyi, called the fund a gateway to unlocking financing problems that have long constrained contractors and predicted it would drive greater efficiency in how contracts get executed. Bank representatives at the ceremony welcomed the partnership and pledged continued cooperation. The launch builds on a track record of Nigerian involvement in SNEPCo’s operations: earlier this year, 43 of the 53 companies that took part in the turnaround maintenance exercise at the Bonga floating production and offloading vessel were wholly Nigerian owned, and the new facility is expected to further expand the capacity of local firms to deliver value for the country’s leading deepwater producer.
