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First Bank stakes $3.3 billion on oil, gas projects

By on May 10, 2013

FIRST Bank of Nigeria Plc expended over $3.3 billion (N500 billion) in the financing of various oil and gas projects in Nigeria last year. This financing package represents 37.40 per cent of the bank’s portfolio.

The amount, the bank said represented its total financing activities for the upstream, midstream and downstream sub-sectors of the oil and gas industry.

The bank noted that it has committed $650 million for the development of selected marginal field operation, while it expended $270 million to offshore pipeline projects and $234 million as local contract support for specialized vessel acquisition scheme.

The bank’s Executive Director, Corporate Banking, Kehinde Lawanson, who disclosed this at a dinner organized at the just-concluded Offshore Technology Conference in Houston, Texas, United States of America, said financing was in line with the bank’s efforts to boost local capacity in the oil and gas sector

He disclosed that the bank has financed Atlantic Energy project of $289 million term loan and working capital; another $15.15 million team loan financing to Fymak Marine and Services Nigeria Limited, $276 million to OPL International Limited.

He said: “Our total play in the oil and gas business as at 2012, which was the biggest in the industry was well over N500 billion. First Bank is widely acknowledged as the leading player in oil and gas financing and has a proven pedigree of providing both financial and advisory backing for players in the sector”.

He stated that the bank also played very actively in the marginal fields and had funded well over 25 per cent of those who bought the Shell’s assets.

“We are committed to growing our involvement in the oil and gas industry and assisting particularly indigenous firms take full advantage of the opportunities in the industry in line with the Nigerian local content act,” he said.

Lawanson who listed some of the Bank’s activities in the sector to include: Vessel finance facility of $52.0million for the purchase of two jack-up badges to be leased to Mobil Producing for the execution of a Mobil contract.

The U.S. Exim Bank provided fund for $36,021,786.55 (guaranteed by First Bank); the provision of a $15.15 million Term Loan to finance the acquisition of two vessels to service a five-year charter party contract awarded by Chevron Nigeria Limited to Fymak Marine and Oil Services Nigeria Limited, a wholly indigenous company; the $29.04 million Asset Finance Facility for the procurement of a field maintenance vessel for Broron Oil and Gas Limited. The vessel named DSV Avianna was built in Ghuangzou China in 2001.

He also said the bank also extended a $20million contract finance facility to execute the laying of umbilicals to hook up well heads of OK 23 and OK 24 in the OKWORI subsea by Broron, financed the importation of marine equipment required to execute a $207million contract from one of the oil majors to lay 24-inch high pressure pipes across Nembe-Cawthorne Channel Trunk Line (NCTL), a distance covering about 44km consisting entirely of swampy terrain. The pipeline traverses six major rivers and about 44 minor rivers and creeks.

The bank’s financing activities in the oil industry also included: funding specialised vessel acquisition scheme for local content support; supporting major pipeline distribution and gas infrastructural development projects in several communities; funding rig acquisition for indigenous operators and financing lines to indigenous fabricators for oil and gas contracts.

“We are actively involved in virtually all the marginal fields; the service companies; the exploration companies and the downstream as well”, he said, adding that the bank’s goal was to assist indigenous firms take full advantage of the Nigerian Content Act by providing requisite financing.

( guardian)