Shell, Nine Banks Launch $3bn Facility to Back Nigerian Oil Contractors

Shell Nigeria Exploration and Production Company Limited has partnered with nine Nigerian banks to launch a $3 billion contract finance facility for indigenous oil and gas contractors.

The facility targets local contractors executing projects for SNEPCo and aims to solve one of the industry’s oldest problems: access to project financing.

The financing scheme, unveiled in Lagos, will provide credit support in both naira and United States dollars. 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.

A Financing Lifeline for Local Contractors

For years, many Nigerian oil and gas service companies have struggled to win and execute major contracts because they lack affordable funding. Even when local firms have the technical capacity, they often face delays because banks demand strong collateral, predictable cash flow and lower risk exposure.

The new facility tries to close that gap. Under the arrangement, SNEPCo brings contracts and payment domiciliation, the banks provide capital, and contractors deliver the work. That structure reduces lending risk and gives banks more confidence to fund local companies.

This matters because oil and gas projects require heavy upfront spending. Contractors need money for equipment, manpower, logistics, technology, safety systems and project mobilisation. Without financing, local content policies can remain strong on paper but weak in execution.

Local Content Gets a Push

SNEPCo Managing Director Ronald Adams said the initiative supports the Nigerian Oil and Gas Industry Content Development Act by promoting in-country value retention. The Act aims to increase Nigerian participation in the oil and gas industry and ensure that more value stays within the country.

The partnership also sends a wider message to the energy sector. Local content does not grow through regulation alone. It needs finance, contracts, technical standards and accountability.

BusinessDay reported that the financing scheme will address limited access to affordable project financing, one of the major constraints facing local oil and gas contractors.

Nigerian Firms Already Play a Bigger Role

SNEPCo said Nigerian companies already contribute strongly to its operations. Earlier this year, 43 wholly Nigerian-owned companies participated in the turnaround maintenance of the Bonga Floating Production Storage and Offloading vessel out of 53 companies involved in the exercise.

That figure strengthens the case for deeper contractor financing. If Nigerian firms already participate in complex deepwater operations, better access to credit could help them scale, hire more workers and deliver bigger projects.

The Petroleum Technology Association of Nigeria also welcomed the facility, describing it as a major boost for indigenous contractors and project execution.