BARCLAYS bank Kenya has ventured into oil drilling financing business by extending a $13 million(Sh1.14 billion) loan to an exploration company to help it buy rigs for its operations.
The bank has announced the signing of a deal with Marriott Drilling Africa Limited the first oil exploration financing deal by a local bank for ongoing projects in the country.
"Today marks the start of a new era for us in East Africa. We believe that banks have a responsibility to assist companies like Marriott in the development of oil resources in Kenya and elsewhere in East Africa. This financing agreement with Barclay is a catalyst to spur our business," said Marriott Drilling's managing director Jonathan Hobday.
Barclays Kenya managing director Jeremy Awori said the institution wants to get the confidence of the market as the ideal asset financing bank through showcasing its capabilities.
"Signing a financing agreement of this value reflects the ability and commitment of Barclays Bank to shoulder its responsibilities in financing the projects of leading companies which have a clear strategy. It is also aligned to our strategy of making Barclays the 'go-to' bank for asset financing solutions in the market", said Awori.
Under the deal, the bank will also be required to arrange and execute the oil explorer's five year financing plan.
Many companies in the country are working to align their businesses to offer services to the country's nascent oil and gas industry after discovery of these resources recently.
In the insurance sector, some underwriting firms have started conducting training for capacity building and skills acquisition in areas such as pricing, policy contracts and risk surveys of the oil and gas business.