SHELL DROPS $3BN BOMBSHELL: NINE BANKS JOIN FORCES TO BANKROLL NIGERIAN CONTRACTORS
No more “no funds, no work.”
GREATRIBUNETVMEWS –Shell SNEPCo has unlocked a $3 billion credit war chest with Nigeria’s top 9 banks — available in Naira and USD — to wipe out cash flow stress for contractors on its projects.
Bottom Line:
Shell + 9 heavyweight banks = $3bn in credit, Naira + USD. The mission: fund Nigerian contractors now, let them deliver without waiting on cash
The Key Issues, In Full Quotations:
1. The $3 Billion Facility
“Shell Nigeria Exploration and Production Company Ltd (SNEPCo) has launched a $3 billion Contract Finance Facility to support Nigerian contractors working on its operations.”
2. Dual-Currency, Bank-Led Push
“The fund was unveiled in partnership with nine Nigerian banks and will be available in both Naira and US Dollars.”
3. The Core Objective
“It is designed to provide credit support that will help local contractors deliver projects without cash flow constraints.”
4. The Power 9 Banks
“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.”
SNEPCo explained that the facility is a major step to strengthen local content participation and give contractors easier access to financing.
At the signing of the Memorandum of Understanding in Lagos, the SNEPCo Managing Director, Ronald Adams said, “the initiative reflects the spirit of the Nigerian Oil and Gas Industry Content Development Act, which is aimed at in-country value retention.
He added: “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.”
Speaking, 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 lauded SNEPCo for the opportunity to partner on an initiative aimed at empowering contractors and assured the company of their continued support and cooperation.
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.
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