Shell, Banks launch $3bn financing scheme for Nigerian oil contractors

Shell Nigeria Exploration and Production Company Limited has partnered with nine Nigerian banks to launch a $3 billion Contract Finance Facility aimed at improving access to funding for indigenous oil and gas contractors executing projects for the company.

The financing initiative, unveiled on Thursday, is designed to provide credit support to local contractors handling Shell projects and will be available in both naira and United States dollars.

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 during the signing of the Memorandum of Understanding in Lagos, the Managing Director of Shell Nigeria Exploration and Production Company Limited, 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.

Mr Adams said the partnership combines financing, project execution and payment security to create a sustainable framework for indigenous contractors.

“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.

Industry stakeholders welcome initiative

The Vice President, Finance, Shell Nigeria, CJ Akwaeze, described the financing facility as another demonstration of the company’s commitment to supporting the growth and sustainability of Nigeria’s oil and gas industry.

The Chairman of the Petroleum Technology Association of Nigeria, Wole Ogunsanya, represented by Dr Joan Faluyi, described the initiative as a major breakthrough for indigenous contractors.

Dr Faluyi said the facility would address long-standing financing challenges while improving efficiency in project execution.

Representatives of the participating banks also commended SNEPCo for introducing the financing arrangement and pledged continued support for local contractors.

SNEPCo noted that Nigerian companies continue to play significant roles across its operations, revealing that 43 wholly Nigerian firms participated in the recent turnaround maintenance exercise on the Bonga Floating Production Storage and Offloading vessel out of the 53 companies involved.

The company expressed confidence that the new Contract Finance Facility would further strengthen the capacity of indigenous companies and enhance value delivery across Nigeria’s deepwater oil and gas operations.