Shell Nigeria Exploration and Production Company Ltd (SNEPCo) has alongside First Bwnk and eight other leading Nigerian banks, launched a $3-billion Contract Finance Facility.
In what was described as a major step towards empowering Nigerian contractors, the facility was designed to provide credit support for local contractors executing projects for SNEPCo operations and will be available in both Naira and US Dollars.
This was made known in a statement issued by Shell Nigeria on Thursday.
According to the statement, the other banks participating in the deal alongside First Bank include Guaranty Trust Bank (GTCO), Zenith Bank, Access Bank, United Bank for Africa (UBA), and Stanbic IBTC.
Others include Standard Chartered Bank, First City Monument Bank and Fidelity Bank.
Speaking at the signing of the Memorandum of Understanding in Lagos, the SNEPCo Managing Director, Ronald Adams, said the arrangement of the project is strengthened by mutual accountability between Shell and the banks.
“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 others, and the mutual accountability gives the arrangement its strength.” Adams said.
Also speaking at the signing ceremony, the Vice President Finance, Shell Nigeria, C. J. Akwaeze, said the scheme reflects Shell’s commitment to the growth of oil and gas operations in Nigeria.
The chairman of indigenous oil and gas contractor group PETAN, Wole Ogunsanya, represented by Dr Joan Faluyi, lauded the scheme as a “gateway to unlocking contractor financing issues which will also drive efficiency in contract execution.”
Representatives of the banks commended SNEPCo for the opportunity to partner on an initiative aimed at empowering contractors and assured the company of their continued support and cooperation.
Nigerian companies have continued to play key roles in supporting SNEPCo’s operation and project execution.
Early this year, 43 wholly Nigerian companies took part in the turnaround maintenance exercise at the Bonga Floating Production and Offloading (FPSO) vessel out of the total of 53 companies involved.
The Contract Finance Facility is expected to further boost the capacity of Nigerian companies to deliver even more value in the operations of Nigeria’s premier deepwater producer.