Nigerian Banks Raised U.S.$2.5 Billion to Fund Acquisition of Shell Oil Blocks

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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 George Osahon, said non-producing marginal fields would be withdrawn from the operators in March 2015, unless reasonable commitment is ascertained by the government.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.

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