Shell Nigeria Exploration and Production Company Limited (SNEPCo) has joined forces with nine prominent Nigerian banks to introduce a substantial $3 billion contract finance facility. This strategic initiative is designed to significantly enhance access to credit for indigenous oil and gas contractors engaged in projects for SNEPCo, thereby fostering greater in-country value retention and operational efficiency within Nigeria’s vital energy sector.
The financing scheme, officially unveiled on Thursday, will provide crucial credit support to local entities undertaking projects for SNEPCo. The facility will be accessible in both Nigerian Naira and United States Dollars, offering flexibility to contractors and aligning with the transactional needs of the industry. The participating financial institutions 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.
Speaking at the Memorandum of Understanding signing ceremony in Lagos, the Managing Director of SNEPCo, Ronald Adams, underscored the initiative’s alignment with the core objectives of the Nigerian Oil and Gas Industry Content Development Act. He stated, “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.”
The Vice President, Finance, Shell Nigeria, CJ Akwaeze, highlighted the financing scheme as a clear demonstration of Shell’s unwavering commitment to supporting the sustained growth and development of oil and gas operations within Nigeria. This collaboration is poised to empower local businesses, enabling them to undertake larger and more complex projects, thereby contributing more significantly to the nation’s economic landscape.
The Chairman of the Petroleum Technology Association of Nigeria, Wole Ogunsanya, represented by Dr Joan Faluyi, lauded the facility as a transformative development for indigenous contractors. Ogunsanya described the initiative as a “gateway to unlocking contractor financing issues, which will also drive efficiency in contract execution.” Representatives from the participating banks echoed these sentiments, commending SNEPCo for spearheading this arrangement and pledging their continued support to strengthen local contractors and the broader oil and gas ecosystem.
SNEPCo further noted the significant and ongoing contributions of Nigerian companies to its operational success and project delivery. As an illustration, the company pointed out that earlier this year, 43 wholly Nigerian companies were involved in the turnaround maintenance exercise for the Bonga Floating Production Storage and Offloading vessel, out of a total of 53 companies participating in the exercise. The Contract Finance Facility is anticipated to further bolster the capabilities of these Nigerian enterprises, enhancing value delivery across the operations of Nigeria’s premier deepwater producer. This development is of particular interest to legal counsel, compliance officers, and investors seeking to navigate and capitalize on opportunities within Nigeria’s evolving energy sector.
... Shell, Nine Banks Launch $3 Billion Facility to Bolster Nigerian Oil Contractor Financing and Local Content ... Naijaonpoint.