How Shell Nigeria assists contractors, creates jobs, others
Shell companies in Nigeria – Shell Petroleum Development Company Limited (SPDC), Shell Nigeria Exploration and Production Company (SNEPCo) and Shell Nigeria Gas Limited (SNG), said they have boosted Nigerian contractors’ operations and supported community development projects with N312.3 billion in 2017.
Country Chair, Shell Companies in Nigeria and SPDC Managing Director, Osagie Okunbor, disclosed this yesterday at the 2018 Shell in Nigeria Briefing Notes’ presentation in Lagos. The briefing unveiled shell companies’ activities and contributions to the nation’s economy in 2017.
Okunbor said Shell operated ventures produced an average of 631,000 barrels of oil equivalent daily (boe/d) in 2017, spent $228million (about N82.3 billion) on community-driven projects from 2006 and supported Nigerian contractors with N230 billion in 2017.
The SPDC and SNEPCo, he said, contributed $1.9 billion to the Niger Delta Development Commission (NDDC) from 2002 to 2017, adding that some 290 Nigerian contractors, have received loans worth more than N472 billion under the Shell Contractor Support Fund, which was set up by Shell companies in Nigeria to help vendors and suppliers in the oil and gas industry secure funds at reduced interest rates, relaxed collateral requirements and quicker processing time.
According to him, Shell companies in Nigeria awarded contracts worth over N230 billion to Nigerian contractors in 2017, representing 94 per cent of the total contracts in that year. Shell companies started their intervention in 2011 with the Shell Kobo Fund, which gave way to the Shell Contractor Support Fund the following year with seven participating financial institutions, which have since set aside more than N690 billion for contract execution by Nigerian companies.
Okunbor listed the engaging banks as Access, Skye, Zenith and Stanbic IBTC, as well as First Bank, Standard Chartered and Guaranty Trust Bank.
“We’re pleased to support Nigerian contractors to play greater roles in the oil and gas industry,” said Okunbor, adding: “As pioneers in the industry, we have taken deliberate steps to award contracts to Nigerian vendors and worked with them to grow their capacity, cost efficiency and delivery timelines.
“We discovered, however, that access to finance has been a challenge, and the search for solution led to the Shell Contractor Support Fund,” he explained.
Nigerian ownership of key assets, such as rigs, helicopters and marine vessels, Okunbor said, is also a focus with Shell companies providing technical and financial support to companies across a range of sectors, including transportation, manufacturing and Research and Development.
On social investment, Okunbor said Shell companies have continued to work with government, communities and the civil society to fund and implement projects and programmes that have lasting impacts on people’s lives in the Niger Delta in particular and Nigeria as whole.
He said since 2006, the SPDC JV has disbursed more than N41 billion to 37 active Global Memorandum of Understanding (GMoU) clusters in Rivers, Delta, Bayelsa and Abia states, adding that a GMoU is an agreement that brings a group (or cluster) of communities together with representatives of state and local governments, SPDC and NGOs, with the SPDC JV providing five-year funding for communities to implement development projects of their choice.
The Shell boss said social investment activities of the companies focus on community and enterprise development, education, health, access-to-energy and road safety, pointing out that in 2017, SPDC JV, Shell Nigeria Exploration and Production Company and Shell Nigeria Gas, spent more than N18 billion on direct social investment projects. Nigeria, he noted, has the largest concentration of social investment spending in the Shell Group.
Okunbor said Shell’s flagship oil field, Bonga, has delivered a total of 763 million barrels of oil between its first production in 2005 and end of 2017, adding that the company has expanded the field with further drilling of wells in Bonga Phases 2 and 3 and through a subsea tie-back, which unlocked the nearby Bonga North West field in August 2014.
Also at the briefing, SNEPCo’s Managing Director, Bayo Ojulari, said Bonga‘s success story is not only that it is Nigeria’s first oil and gas production project in more than 1,000 metres of water depth, or that it increased Nigeria’s oil production capacity by 10 per cent in 2005, but that it is a Nigerian venture delivered by Nigerians, using global expertise and processes offered by Shell that have launched Nigeria into the league of notable deepwater players.
The Bonga turnaround maintenance in March and April 2017, he said, was a significant milestone in SNEPCo’s operations. “This was the most complex and largest of the three previous turnaround maintenances in the 12-year history of Bonga, and has helped to ensure safe and sustained production and reduced unscheduled production deferments. More than 1,000 people and more than 50 Nigerian contractor and sub-contractor companies participated in the exercise,” he added.
The SNG Managing Director, Ed Ubong, also gave scorecard of his company.
