Nigeria banks’ increasing role in oil, gas financing
Early this year, ExxonMobil Nigeria launched a financial scheme amounting to $8.6 billion, aimed at increasing the capacity of indigenous contractors in the oil and gas industry.
The ExxonMobil Nigeria Contractor Finance Scheme is a partnership between the oil major and 12 leading Nigeria banks, including First Bank, Stanbic IBTC, GTBank, Ecobank, Zenith, Access, Citibank, Standard Chartered, UBA, Union bank, FCMB and Fidelity.
Buoyed by growing financing backing from local banks, indigenous oil and gas companies have expanded in Nigeria in recent years, capitalising on the government plan to boost domestic control over the oil industry.
Indigenous firms are poised to snap up some of the Nigerian oil fields being divested by a Royal Dutch Shell-led consortium, which is close to selling the fields for about $5 billion.
Indigenous firms have grown aggressively in the oil and gas industry since 2008 and have bought assets worth $5 billion from the world’s biggest energy groups, reshaping Nigeria’s 60-year-old oil industry.
It is believed in some industry quarters that another $10 billion of assets from international companies could be up for grabs in the next few years.
Foreign banks traditionally facilitated these deals, but this year Nigerian banks have tapped international capital markets to raise long-term dollar financing through bonds and syndicated loans, the proceeds of which are used to fund local oil companies.
In the first half of 2014, Zenith Bank, Diamond Bank and Access Bank raised $1.1 billion.
Shell last year put up for sale its 30 percent shares in four oil blocks in the Niger Delta – Oil Mining Leases (OML) 18, 24, 25, 29 – as well as a key pipeline, the Nembe Creek Trunk Line.
The price tag for the four oilfields and the key pipeline being divested by Shell, France’s Total and Eni of Italy has doubled since initial estimates towards the end of last year, highlighting the financial muscle of a cluster of Nigerian oil companies that have emerged as prominent players in the country’s hydrocarbon industry.
Nigerian oil traders-cum-producers Taleveras and Aiteo have offered $2.6 billion for the largest oilfield, Oil Mining Lease (OML) 29, according to the people familiar with the situation. The 60-mile Nembe Creek Trunk Line is being sold as part of this package.
Sources said that Pan Ocean Oil Corporation has been selected for OML 24 for $900 million. Eroton, a consortium of Midwest Oil and Gas and Mart Resources, has won OML 18 for about $1.2 billion. Crestar has been chosen for OML 25 that is selling for close $500 million.
Oando recently concluded the acquisition of United States-based ConocoPhillips’ Nigerian assets for $1.5 billion, with Nigerian banks such as First City Monument Bank playing a crucial role.
FEMI ASU