Shell, banks back $3bn finance lifeline for local contractors

The Shell Nigeria Exploration and Production Company Limited (SNEPCo) has partnered with nine Nigerian banks to establish 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 scheme, unveiled in Lagos on Thursday, will provide both naira and US dollar-denominated credit to local contractors, addressing one of the industry’s biggest constraints—limited access to affordable project financing.

The participating lenders are First Bank of Nigeria, Guaranty Trust Bank, Zenith Bank, Access Bank, United Bank for Africa, Stanbic IBTC Bank, Standard Chartered Bank, First City Monument Bank and Fidelity Bank.

Speaking at the signing of the Memorandum of Understanding, Ronald Adams, SNEPCo Managing Director, said the initiative supports the objectives of the Nigerian Oil and Gas Industry Content Development Act by strengthening indigenous participation in the sector.

“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. The contractors provide performance. Each is accountable to the others, and mutual accountability gives the arrangement its strength,” Adams said.

CJ Akwaeze, vice president, Finance, Shell Nigeria, said the facility underscores the company’s commitment to supporting the long-term growth of Nigeria’s oil and gas industry through improved financing for indigenous businesses.

Wole Ogunsanya, chairman of the Petroleum Technology Association of Nigeria (PETAN), represented by Joan Faluyi, described the initiative as a major breakthrough for local contractors.

He said the facility would help unlock financing challenges that have long constrained indigenous service companies and improve project execution across the industry.

Representatives of the participating banks also welcomed the partnership, pledging continued support to strengthen local contractors and deepen financing within Nigeria’s energy sector.

SNEPCo noted that Nigerian companies already play a significant role in its operations.

It disclosed that 43 of the 53 companies involved in this year’s turnaround maintenance of the Bonga Floating Production Storage and Offloading (FPSO) vessel were wholly Nigerian-owned.

The company said the new Contract Finance Facility is expected to deepen local content, strengthen indigenous contractor capacity and improve project delivery across Nigeria’s deepwater oil and gas industry.