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NESR and HSBC announce first sustainability-linked loan for MENA's oilfield services industry

Published on December 13, 2021
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National Energy Services Reunited Corp. (“NESR” or “the Company”) (NASDAQ: NESR) (NASDAQ: NESRW), an international, industry-leading provider of integrated energy services in the Middle East and North Africa (“MENA”) region, has announced that the company has secured a sustainability-linked loan (SLL) with HSBC Bank Middle East – the first SLL of its kind within the MENA Oilfield Services (“OFS”) sector.

The loan terms are linked to three key performance indicators (“KPIs”) that are tied to the following environmental, social, and governance (ESG) indicators, and will be tracked within the agreement span:

  • Environmental – Wastewater Reduction: NESR has set ambitious targets to reduce water waste, which incorporates both water stewardship in traditional OFS product lines and in water treatment projects within the newly formed ESG Impact segment.
  • Social – HSE Training: NESR will drive growth in employee health, safety & environment (“HSE”) training hours, which underpins the company’s strategy of MENA localization and the empowerment of talent within the region. Training growth is also expected to enhance the safety, quality, and reliability of NESR service delivery.
  • Governance – Supplier Compliance: NESR will increase its network of local suppliers that qualify with the Company’s supplier governance policies. This not only aligns with MENA localization efforts but also should improve the durability and flexibility of the NESR supply chain.

In addition to the quantitative KPIs above, NESR has also pledged to establish a formal company carbon reduction strategy. As part of its inaugural ESG Report and broader decarbonization strategy, NESR is currently evaluating a Science-Based Target initiative (“SBTi”) and expects to finalize targets in the coming year.

“As the National Champion of MENA, we are proud to be the first of our MENA-centric oilfield services peers to enter into an ambitious, sustainability-linked loan of this type with our valued partner lenders,” said Sherif Foda, Chairman of the Board and Chief Executive Officer of NESR. “The loan also underscores our commitment to action, not just talk, within the broader framework of upstream decarbonization and energy transition. Our participation and conversations at the recent regions high level conferences punctuate the fact that all serious players in the energy value chain are moving quickly to drive the industry forward into a cleaner, more sustainable paradigm. These efforts not only encompass additional commercial opportunities, like we are seeing across our emerging ESG Impact segment, but also include internal efforts to bolster the Company internally across the E, S & G areas.”

Dan Howlett, Regional Head of Commercial Banking, HSBC Middle East North Africa and Turkey, said: “HSBC is delighted to work with NESR on this sustainability linked loan, the first of its kind in MENA. HSBC is prioritising financing and investment that supports the transition to a net zero global economy, and NESR’s ESG ambitions – as this transaction shows – dovetail with our financing commitments and expertise.”

HSBC globally has committed to align its financed emissions – the carbon emissions of its portfolio of customers – to the Paris Agreement goal to achieve net zero by 2050 or sooner. To support customers in their transition to lower carbon emissions, HSBC aims to provide up to US$1 trillion of financing and investment globally by 2030.

-Ends-

About National Energy Services Reunited Corp.

Founded in 2017, NESR is one of the largest national oilfield services providers in the MENA and Asia Pacific regions. With over 5,000 employees, representing more than 60 nationalities in over 15 countries, the Company helps its customers unlock the full potential of their reservoirs by providing Production Services such as Hydraulic Fracturing, Cementing, Coiled Tubing, Filtration, Completions, Stimulation, Pumping and Nitrogen Services. The Company also helps its customers to access their reservoirs in a smarter and faster manner by providing Drilling and Evaluation Services such as Drilling Downhole Tools, Directional Drilling, Fishing Tools, Testing Services, Wireline, Slickline, Drilling Fluids and Rig Services.

Source: Zawya

Source: Press release

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