Shell has collaborated with the Nigerian National Petroleum Corporation (NNPC) to seal a $2.2b Memoranda of Understanding with eight Nigerian banks under the refreshed Shell Contractors’ Support Fund. The arrangement is coming as part of measures to facilitate access to finance for indigenous players in the oil and gas sector.
The financial institutions in the deal include Zenith Bank, Access Bank, Skye Bank, Stanbic IBTC Bank, First Bank, Standard Chartered Bank, First City Monument Bank and Guaranty Trust Bank.
Shell in a statement explained that under the scheme contractors must have valid purchase orders and meet the banks’ risk assessment criteria, pointing out that the refreshed version was in response to market realities and would offer loans faster and at cheaper rates.
The Managing Director, Shell Petroleum Development Company of Nigeria Limited and Country Chair, Shell Companies in Nigeria, Mr. Osagie Okunbor, argued that “Supporting Small and Meduim Enterprises (SMEs) under this scheme is for the mutual benefit of all the parties”.
“While the scheme reduces the pressure from requests for advance payments from contractors on us, it also ensures optimum delivery by our contractors, leaving the banks with a de-risked client base in addition to the comfort of domiciliation of payments.”
The Finance Manager, Nigeria and Gabon, Guy Janssens, explained that funding is key to enable contractors deliver and grow. He also urged the banks to make the scheme work.
The Managing Director, Shell Nigeria Exploration and Production Company (SNEPCo) Bayo Ojulari, advised the contractors to perform in order to build trust and grow.
The Group General Manager, NAPIMS, Dafe Sejebo, who was represented by Bunmi Lawson, implored the banks to make the loan facilities available to the vendors when they come for them.
Also, the Chairman of the Petroleum Technology Association of Nigeria, PETAN, Mazi Okoroafor, advised the banks to be realistic in their demands in order to facilitate easier access to the funds, the statement noted.