Shell, Nigerian banks launch $3bn financing for local oil contractors

Shell Nigeria Exploration and Production Company Limited (SNEPCo) has partnered with nine Nigerian banks to launch a $3 billion contract finance facility. This initiative aims to boost credit access for indigenous oil and gas contractors executing projects for SNEPCo. The financing scheme, unveiled on Thursday, will provide support in both naira and U.S. dollars. The participating banks include 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.

Ronald Adams, Managing Director of SNEPCo, stated that the initiative supports the Nigerian Oil and Gas Industry Content Development Act by promoting in-country value retention. He explained that SNEPCo provides contracts and payment domiciliation to de-risk lending, while partner banks offer capital and discipline, and contractors ensure performance. This mutual accountability strengthens the arrangement.

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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.

Shell Nigeria's Vice President of Finance, CJ Akwaeze, highlighted the scheme as a demonstration of Shell's commitment to supporting oil and gas operations in Nigeria. The Petroleum Technology Association of Nigeria, represented by Dr. Joan Faluyi, lauded the facility as a significant boost for indigenous contractors and a "gateway to unlocking contractor financing issues."

SNEPCo noted that Nigerian companies play crucial roles in its operations. Earlier this year, 43 out of 53 companies involved in the turnaround maintenance of the Bonga Floating Production Storage and Offloading vessel were wholly Nigerian. The Contract Finance Facility is expected to further enhance the capacity of these companies and improve value delivery in Nigeria's deepwater production operations.

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gateway to unlocking contractor financing issues, which will also drive efficiency in contract execution.