Shell Nigeria Exploration and Production Company Limited has partnered with nine Nigerian banks to launch a $3bn contract finance facility aimed at improving access to credit for indigenous oil and gas contractors executing projects for the company.
According to a statement, the financing scheme, unveiled on Thursday, is designed to provide credit support to local contractors handling projects for SNEPCo and will be available in both naira and United States 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.
Speaking at the signing of the Memorandum of Understanding in Lagos, the Managing Director of SNEPCo, Ronald Adams, said the initiative aligns with the objectives of the Nigerian Oil and Gas Industry Content Development Act by promoting greater in-country value retention.
“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.
The Vice President, Finance, Shell Nigeria, CJ Akwaeze, said the financing scheme demonstrates Shell’s commitment to supporting the growth of oil and gas operations in Nigeria.
The Chairman of the Petroleum Technology Association of Nigeria, Wole Ogunsanya, who was represented by Dr Joan Faluyi, described the facility as a major boost for indigenous contractors.
Ogunsanya lauded the initiative as a “gateway to unlocking contractor financing issues, which will also drive efficiency in contract execution.”
Representatives of the participating banks also commended SNEPCo for introducing the financing arrangement, saying the partnership would strengthen local contractors, and pledged their continued support for the initiative.
SNEPCo said Nigerian companies have continued to play significant roles in its operations and project delivery. It noted that earlier this year, 43 wholly Nigerian companies participated in the turnaround maintenance exercise at the Bonga Floating Production Storage and Offloading vessel out of the 53 companies involved in the exercise.
According to the company, the Contract Finance Facility is expected to further strengthen the capacity of Nigerian companies and enhance value delivery in the operations of Nigeria’s premier deepwater producer.
SOURCE: PUNCH NEWS PAPER
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