Shell Nigeria Exploration and Production Company Ltd (SNEPCo) has launched a $3 billion Contract Finance Facility in partnership with nine Nigerian banks to improve access to financing for indigenous contractors executing projects under its operations.

The facility, unveiled at the signing of a Memorandum of Understanding (MoU) in Lagos, is designed to provide credit support to local contractors and will be available in both Naira and United States dollars.

The participating financial institutions 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 ceremony, 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 in-country value retention and strengthening the capacity of 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 others, and the mutual accountability gives the arrangement its strength.”

The Vice President, Finance, Shell Nigeria, Chukwuemeka Jideofor Akwaeze, said the financing scheme underscores Shell’s commitment to supporting the growth of Nigeria’s oil and gas industry through initiatives that enhance the capabilities of local businesses.

The Chairman of the Petroleum Technology Association of Nigeria (PETAN), Wole Ogunsanya, who was represented by Dr Joan Faluyi, described the initiative as a major step towards addressing financing challenges facing indigenous contractors.

She said the facility would serve 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 initiating the partnership, noting that the scheme would strengthen indigenous participation in the oil and gas industry. They pledged their continued support and cooperation towards ensuring the success of the programme.

SNEPCo noted that Nigerian companies have continued to play significant roles in supporting its operations and project delivery. It disclosed that earlier this year, 43 Nigerian companies participated in the turnaround maintenance exercise at the Bonga Floating Production, Storage and Offloading (FPSO) vessel, accounting for the majority of the 53 companies involved in the exercise.

According to the company, the new Contract Finance Facility is expected to further enhance the capacity of Nigerian contractors, improve project execution and deepen local content participation across the operations of Nigeria’s premier deepwater producer.