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Nigerian banks raise $2.5bn to fund acquisition of Shell oil blocks

By on December 13, 2014

The Managing Director and Chief Executive Officer of Fidelity Bank Plc, Mr. Nnamdi Okonkwo, has stated that his bank and some other Nigerian banks accounted for about $2.5 billion used by some Nigerian independent firms to acquire assets during the recent divestment of onshore assets by Shell Petroleum Development Company (SPDC), Total and Nigerian Agip Oil Company (NAOC).

This is coming as the federal government has warned that indigenous companies that were awarded marginal oil fields in 2003 but have not developed the fields would forfeit the assets by March 2015.

Speaking Thursday in Lagos on the sidelines of a one-day sensitisation workshop organised by the Department of Petroleum Resources (DPR) for beneficiaries of the marginal oil fields, the Fidelity Bank boss said indigenous oil service operators had made progress, adding that it is in the exploration and production (E&P) business that Nigerian independents are facing challenges.

“The Nigerian Content Development and Monitoring Board (NCDMB) has recorded successes in the oil service space. The E&P space is where they have challenges.

“In the E&P space, we participated in the divestment carried out by Shell by supporting companies in providing finance for their acquisitions and subsequent operations.

“We intend to continue in the future as opportunities arise. In the new Shell divestment programme, Nigerian banks participated by raising up to $2.5 billion to support indigenous companies, which shows our commitment to the local content initiative,” he said.

Okonkwo, who was represented by the bank’s Division Head in charge of Upstream Oil and Gas, Mr. Abolore Solebon, revealed that Fidelity Bank is also the custodian banker to the NCDMB.

Speaking at the workshop, the Director of DPR, Mr. George Osahon, said non-producing marginal fields would be withdrawn from the operators in March 2015, unless reasonable commitment is ascertained by the government.

Osahon stated that the operators, who were awarded marginal fields in 2003, were given a 10-year deadline to develop the assets.

He said government was aware of the challenges facing the operators in the areas of funding and technology but added that the government was also concerned about the inability of the operators to meet the government’s objectives of bringing the fields to production.

Osahon charged the operators to form cluster groups, where possible, for the development of the assets.

According to him, a total of 28 marginal fields were awarded to indigenous companies in Nigeria.

“We have a deadline of March 2015 for those that have held marginal fields since 2003. The 10 years given to them have elapsed. The fields will not be allowed to remain like that forever. It is not to punish them,” he said.

 

[ThisDay]

One Comment

  1. onuigbo

    December 13, 2014 at 10:57 pm

    Agriculture is where the future economic empowerment is for Nigeria. These bankers are for quick and easy money. We have not heard of Nigeria banks pouring money to develop Nigeria Railways, constructing roads and bridges to enhance movement of people and goods. This is not the right time for ill equipped, and lacked technical know-how Nigerians to be buying oil fields from these foreign companies. The oil glut of today was as a result carefully planned national policy of the United States known as Energy Independence since the 1973 oil crisis. Oil is being discovered all over the place and new renewable energy sources are coming up. CBN will not be able to bail these banks once again, as it did few years ago. If they are serious and mean to stay in business the old fashion way, they should invest in agriculture.