Shell and nine Nigerian banks launch $3 billion credit facility for local energy contractors
AI-madeShell PLC and nine Nigerian banks just launched a $3 billion contract finance facility to extend credit to local companies executing Shell projects in Nigeria. The facility is backed by Shell Nigeria Exploration and Production Co. (SNEPCo) alongside Access Bank, Fidelity Bank, First Bank, FCMB, GTBank, Stanbic IBTC, Standard Chartered, UBA, and Zenith Bank, according to a statement released this week.
Shell and nine banks unveil $3 billion contractor credit scheme
The facility runs in both naira and US dollars, giving local contractors flexibility depending on what their specific project actually needs. Nigeria’s energy sector regularly deals with costs that span both local and international markets—a single-currency structure simply wouldn’t cut it.
SNEPCo managing director Ronald Adams tied the initiative directly to national policy. “The initiative reflects the spirit of the Nigerian Oil and Gas Industry Content Development Act, which is aimed at in-country value retention,” he said. He also spelled out the underlying logic: “Our partner banks offer capital and discipline. SNEPCo brings contracts and domiciliation of payments that de-risk lending.”
Estimated recoverable resources exceed 300 million barrels of oil equivalent — a major undertaking that’ll need serious contractor capacity over several years.
Shell’s role here isn’t just handing out contracts—it’s making those contracts bankable. By routing payments through the participating banks, SNEPCo lowers the credit risk that’s traditionally made Nigerian lenders reluctant to extend large loans to energy sector contractors.
Why the facility was created: Contractor financing gaps and local content obligations
Access to capital has been one of the most stubborn barriers for Nigerian companies trying to compete for big energy contracts. Even when local firms have the technical skills, they often can’t lock down the upfront financing needed to mobilize equipment, hire workers, and keep operations running through a full project cycle.
The Nigerian Oil and Gas Industry Content Development Act was designed to tackle exactly that structural gap. It mandates in-country value retention — creating a real legal and policy obligation for operators like Shell to actively support local contractor participation, not just list it as a preference.
Wole Ogunsanya, chair of the Petroleum Technology Association of Nigeria, welcomed the facility plainly. He called it a “gateway to unlocking contractor financing issues” and said it would also “drive efficiency in contract execution.” That second point matters just as much as the first. Financing delays don’t only hurt contractors — they slow down entire projects.
There’s already solid evidence of local participation. Earlier in 2026, 43 wholly Nigerian companies took part in turnaround maintenance at the Bonga FPSO, out of 53 total companies involved. The new facility aims to push that number higher and make local involvement more consistent across Shell’s project portfolio.
Expected effects: Broader contractor access and deepwater project execution
The most immediate effect should be a wider pool of Nigerian companies able to bid on Shell contracts. Financing constraints currently disqualify firms that might otherwise be technically ready — remove that barrier and you meaningfully increase both competition and local participation.
That’s especially relevant for Shell’s deepwater pipeline. The Bonga North project, greenlighted in 2024, is expected to add 110,000 barrels of oil per day by 2030 through a tieback to the existing Bonga FPSO. Estimated recoverable resources exceed 300 million barrels of oil equivalent — a major undertaking that’ll need serious contractor capacity over several years.
Shell’s 2025 final investment decision on the HI field adds another layer. That project targets up to 350 million standard cubic feet of gas per day to feed Nigeria LNG, with Shell holding a 40 percent stake. Running Bonga North and HI simultaneously will stretch contractor resources, which is exactly why de-risked financing could be the difference between hitting timelines and missing them.
Better-financed contractors don’t just show up — they show up ready. Adequate working capital means faster mobilization, properly maintained equipment, and the ability to retain skilled workers for a full project rather than cutting corners when cash gets tight.
Background: Shell’s refocused Nigeria strategy in LNG and deepwater
This facility lands as Shell has significantly reshaped its presence in Nigeria. Last year, the company sold its onshore subsidiary, Shell Petroleum Development Company of Nigeria Ltd., to a local consortium for $1.3 billion—effectively exiting onshore operations in a deliberate strategic pivot toward the parts of Nigeria’s energy sector where it sees long-term upside.
Offshore, Shell has been doubling down. The company raised its stake in the Bonga field to 65 percent after acquiring a 10 percent interest in Oil Mining Lease 118 from TotalEnergies. Producing since 2005, Bonga has a capacity of 225,000 barrels of oil per day and remains one of Nigeria’s most significant offshore assets.
On the gas side, Shell holds a 25.6 percent stake in Nigeria LNG, which has a declared capacity of 22 million metric tons per year. The company has stated its intent to grow global LNG volumes by an average of four to five percent annually through 2030, with Nigeria central to that plan.
The groundwork for broader local participation is present
The $3 billion Contract Finance Facility is a coordinated move by Shell and nine Nigerian banks to close a long-standing financing gap for local energy contractors. The dual-currency structure and Shell’s payment domiciliation arrangement are designed to reduce lending risk while meeting Nigeria’s local content requirements.
It arrives as Shell ramps up deepwater and gas investments—Bonga North and the HI field—that’ll need reliable, well-financed local contractors to execute on schedule. With 43 Nigerian companies already involved in recent Bonga maintenance work, the groundwork for broader local participation is there. This facility is built to scale it.
Kelly is an experienced writer with 15 years of experience exploring the big stories that shape our world, from tech breakthroughs and space exploration to climate, energy, and the fascinating quirks of science. She has a talent for turning complex ideas into sharp, memorable insights that stay with readers long after they’ve finished reading.
