First Bank of Nigeria participated at the recent Offshore Technology Conference where Kayode Lawanson, the bank’s executive director for corporate banking made a presentation. In this interview with BusinessDay, Lawanson states First Bank’s commitment to contributing to building capacity in the country’s oil and gas sector. He further speaks on the bank’s role and vision on sundry related issues.
FirstBank has been a major player at the Offshore Technology Conference, what’s the rationale behind the bank’s involvement
As full spectrum service provided, FirstBank of Nigeria Limited is committed to lending support and funding economic growth in Nigeria through partnership with prospective investors, especially in the oil and gas space which is the nation’s dominant revenue earning sector. Offshore Technology Conference (OTC) provides a great platform to network with major global players in the oil and gas industry. It gives us an opportunity to collaborate and strengthen existing relationships in this vital sector. The conference also affords the bank an opportunity to identify emerging trends and opportunities in the industry that require cutting edge financial expertise to deliver.
What opportunities does the OTC offer business and corporate organisations
The OTC provides countless opportunities to engage attendees on the development of offshore resources in the field of drilling, exploration, production and environmental protection. It also provides global networking on all industry issues. Updates on the latest information on trends and opportunities in the upstream oil and gas industry. Opportunities for liaisons and synergies with global partners that will assist in promoting Nigerian players especially in the current era of local content.
What is the level of FirstBank’s support in the oil and gas sector
FirstBank has participated immensely in both upstream and downstream transactions in the industry. The financial support extends to upstream, downstream and oil and gas infrastructure development with current commitment in excess of $3billion. Some of the past and ongoing projects are as follows:
•Otorogu Gas Plant rehabilitation and capacity expansion for Lee Engineering Limited
•SSAGS/SPDC project for the provision of solar industrial gas turbine driver (Lee Engineering)
•Nembe Independent Electrical Power Project (Lee Engineering)
•Forcados Yokri Integrated gas pipeline project for OPI International Limited
• EPC for SPDC domestic gas pipeline project being handled by Makon Engineering Limited
•Total commitment of $1.2billion in the financing of importation of refined petroleum products and export of crude on behalf of NNPC
•Total commitment of over $650million to the funding of Marginal Field operations
•Substantial funding of offshore support vessels and rig acquisitions
How can the finance industry effectively drive financing of the oil and gas sector
Driving financing of the oil and gas sector can be achieved by healthy and sincere engagement of the industry operators and regulators with a view of understanding their transaction risks better and deducing possible mitigants.
It can also be achieved by getting the Federal Government to ensure there is a sustainable and stable near, medium and long-term policy framework to drive investment in the sector. Capacity building in some of the critical areas of the industry that has to be encouraged by the industry stakeholders as it remains a critical success factor in the development of the sector. The bureaucratic process in bidding, reviewing and final contracting for projects in the industry is quite cumbersome and time consuming. These processes should be streamlined to facilitate ease of accessing financing by industry players.
Why is FirstBank hosting major players at the OTC
FirstBank is committed to promoting and driving far-reaching entrepreneurial and capacity building activities through support for players and regulatory authorities in the sector. As a major financier of oil and gas projects in Nigeria, it is only ideal that we identify with programmes that would advance our customers’ businesses and enhance our understanding of the emerging trends in their industry. The OTC also provides us with the platform to share our experiences with existing and prospective customers in the area of oil and gas financing.
What opportunities are there for local oil and gas operators in light of local content legislation
With the introduction of the local content legislation, indigenous players in the industry have a strong advantage in harnessing opportunities in upstream, midstream and downstream sectors of the oil and gas industry. They have the right of first refusal for indigenous players who have shown capability and eligible to secure contracts. Softer terms financing from banks terms as the Act also provides opportunity for requisite guarantee for part of the loans.
Manpower development for Nigerians and local companies as a whole – welding and fabrication an important bane in the industry is being localised. The multiplier effects of the Act cannot be overemphasised inclusive of employment opportunities for Nigeria, growth and developments in several local industries, development of the Steel industry in the medium to long term.
What products does the bank have to drive infrastructural financing
FirstBank has over the years remained a major player in infrastructure financing in the oil and gas sector. Some of the products available in the bank are:
•Project finance facility
•Oil and Gas Contract Finance
•Bond/Guarantee lines – APG, Performance Bond, etc.
•Invoice discounting financing
•Term Loans/working capital financing
What infrastructural development projects is FirstBank currently involved in
FirstBank has over the years remained a major player in infrastructure financing in the oil and gas sector. The bank is involved in several power-related and NIPP projects, oil and gas pipeline projects, road construction and rehabilitation Guarantees
What are the various mechanism that FirstBank has put in place to achieve rapid development in infrastructural development
In addition to having a specialised lending desk to cater for infrastructural financing request, First Bank has a dedicated desk for infrastructure financing which has been set up by the Bank and manned by a top level executive with cogent industry experience. We also have several alliances with development banks and international lending organisations to partner for such developments.
How have these developments been of benefit to local and foreign investors
These developments have benefitted investors in the following ways:
•Expertise and capacity building
•Capacity to issue long-term debt instruments for infrastructural financing
•Access to developmental and multilateral financing of infrastructural asset
•Brand equity – Global endorsement of brand.
•Opening of Nigerian oil and gas assets to a wide range of global fund managers.
