United Bank for Africa has signed a $200 million contract with Shell, a British-Dutch oil and gas company. The partnership will see the bank provide credit facilities to the oil company’s local vendors and suppliers.
General Manager of Government and Business Relations at Shell, Mr. Bashir Bello, who spoke on the development said “lack of access to capital hinders many Nigerian companies from competing for and executing other contracts effectively”.
As a result of this deal, the contractor support fund for Shell’s Nigerian operations has risen to $2.4 billion. A statement released by Shell said the fund can be accessed by contractors and suppliers who have “valid purchase order and meet the bank’s risk assessment criteria”.
Shell had previously signed a $2.2 billion accord with seven Nigerian lenders in 2016. The oil company said about $1.5 billion worth of loans have since been given to over 300 small and medium sized businesses who either supply to Shell Nigeria or serve as vendors to the company’s products.
Shell’s operation in Nigeria dates back to 1937 when it was granted exploration license by the Nigerian Government. The company operates through a number of subsidiaries, including the Shell Petroleum Development Company of Nigeria Limited (SPDC).
Shell has long been one of Nigeria’s largest crude producers. In 2017, it pumped an average of 631,000 barrels of crude per day. This accounted for about a third of Nigeria’s output.