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🇳🇬 Nigeria /Economy & Trade

Shell, Nine Banks Empower Nigerian Oil Service Firms with $3 Billion Contractor Support Fund

From ThisDay · () English

Summarized and contextualized by DistantNews.

At a glance

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  • Shell Nigeria Exploration and Production Company (SNEPCo) has launched a $3 billion contract finance facility with nine Nigerian banks.
  • The fund aims to provide credit support for local contractors working on SNEPCo projects, available in Naira and US Dollars.
  • This initiative supports Nigeria's local content development goals in the oil and gas sector.

Shell Nigeria Exploration and Production Company Ltd (SNEPCo) has taken a significant step to empower Nigerian oil and gas contractors and bolster local content with the launch of a $3 billion Contract Finance Facility. This initiative, established in partnership with nine major Nigerian banks, aims to provide crucial credit support for local companies executing projects for SNEPCo's operations.

the initiative reflects the spirit of the Nigerian Oil and Gas Industry Content Development Act, which is aimed at in-country value retention.

— Ronald AdamsSNEPCo Managing Director explaining the facility's alignment with national content development goals.

The facility, which will be available in both Nigerian Naira and US Dollars, represents a collaborative effort to stimulate growth within the local supply chain. The participating banks include prominent institutions such as 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. This broad participation underscores the banking sector's commitment to supporting the oil and gas industry.

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 others, and the mutual accountability gives the arrangement its strength.

— Ronald AdamsSNEPCo Managing Director detailing the collaborative structure and mutual accountability of the finance facility.

Ronald Adams, the SNEPCo Managing Director, highlighted that the initiative aligns with the spirit of the Nigerian Oil and Gas Industry Content Development Act, focusing on in-country value retention. He explained the symbiotic relationship: partner banks provide capital and financial discipline, SNEPCo offers contracts and payment domiciliation to de-risk lending, and contractors deliver performance. This mutual accountability forms the strength of the arrangement.

the scheme reflects Shell’s commitment to the growth of oil and gas operations in Nigeria.

— C. J. AkwaezeVice President, Finance, Shell Nigeria, on the company's commitment to the sector's development.

C. J. Akwaeze, Vice President of Finance at Shell Nigeria, reiterated Shell's dedication to the growth of Nigeria's oil and gas sector. Wole Ogunsanya, Chairman of the Petroleum Technology Association of Nigeria (PETAN), represented by Publicity Secretary Dr. Joan Faluyi, lauded the scheme as a "gateway to unlocking contractor financing issues which will also drive efficiency in contract execution." The facility is expected to significantly boost the capacity of Nigerian companies, enabling them to deliver even greater value in the operations of Nigeria's premier deepwater producer.

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

— Dr Joan FaluyiPetroleum Technology Association of Nigeria (PETAN) representative describing the scheme's potential impact on contractor financing and efficiency.
DistantNews Editorial

Originally published by ThisDay. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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