$4.1bn, N435bn financing scheme will improve access to oil drilling equipment – PETAN

A newly introduced $4.1 billion and N435 billion vendor financing scheme is expected to improve indigenous oilfield contractors’ access to drilling equipment and help Nigeria achieve its target of producing three million barrels of crude oil daily, the Petroleum Technology Association of Nigeria (PETAN) has said.

PETAN Chairman, Wole Ogunsanya, disclosed this at the association’s media roundtable on the State of Nigeria’s oil and gas industry, explaining that the financing arrangement would help address the capital constraints preventing local companies from acquiring expensive drilling rigs and other specialised equipment.

Ogunsanya said Nigeria required an estimated $6 billion worth of drilling equipment and related infrastructure to scale crude oil production to three million barrels per day.

He identified inadequate funding for equipment and infrastructure as a major constraint to increasing production, despite the country’s technical expertise, human resources and market opportunities.

He said the financing scheme involved Renaissance Africa Energy and 13 commercial and multilateral financial institutions.
Under the arrangement, Renaissance provides guarantees to participating banks for eligible contractors, enabling them to obtain financing against revenues from contracted jobs rather than relying exclusively on conventional collateral.

Ogunsanya urged other oil-producing companies in Nigeria to adopt similar financing models to expand access to capital, strengthen indigenous service providers and accelerate upstream operations.

He said improved access to funding would enable local contractors to acquire modern equipment, execute more complex oilfield projects and contribute more effectively to efforts to increase national crude oil production.

The PETAN chairman also identified the ongoing divestment of onshore and shallow-water assets by international oil companies (IOCs) as an opportunity for indigenous operators and service providers to undertake more technically demanding activities.

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However, he warned that the transition could widen the industry’s skills gap if the training programmes traditionally maintained by international oil companies were not sustained.

To address the challenge, PETAN is spearheading initiatives to develop local expertise, including plans to establish a first-class training centre in Rivers State to equip young Nigerians with practical oilfield skills.

Ogunsanya stressed that sustained investment in financing, drilling equipment, infrastructure and workforce development would be essential to unlocking Nigeria’s petroleum potential, raising production and strengthening the contribution of the oil and gas industry to economic growth.