Industry Overview/Qualitative and Quantitative Risk Analysis:

  • Structure of the international petroleum industry:
  • From upstream to downstream - the hydrocarbon value chain
  • Upstream – exploration, development and production
  • Refining – from raw material to end-product
  • Pipelines – transmission and distribution
  • Liquefied natural gas – a fuel of the future
  • Petchem – beyond the burner-tip
  • Different risk/reward objectives of sponsors and lenders
  • Structural & pricing drivers in oil & gas lending:
  • Country/political risk
  • Sponsors
  • Reservoir/reserves
  • Technology and construction/completion
  • Salesofftake
  • Operation & maintenance
  • Abandonment/decommissioning
  • Environmental/regulatory
  • Quantitative risk analysis:
  • Key ratios – loan life and project life covers
  • Balancing equity and debt
  • Features and design of oil and gas models
  • Developing an appropriate base case – setting “price decks” and other economic/technical parameters
  • Sensitivity analysis:
  • Choosing/calibrating sensitivities
  • Getting to loan value

Understanding Upstream Oil & Gas Financing:

  • Reservoirs & reserves – a technical grounding:
  • From exploration through appraisal to development and production
  • Nature of hydrocarbon reservoirs
  • Estimating volumes
  • Reserve classification – proven/probable/possible: 1P/2P/3P
  • Reserves for banking purposes
  • Due diligence and consultants’ reports
  • Field development finance in the early days of the north sea
  • Growth of the independent sector
  • Emergence of the borrowing base as the tool of choice
  • European and North American borrowing bases
  • Structural features of the European borrowing base, especially:
  • Balancing development and producing assets
  • Redetermination practices – setting technical and economic parameters
  • Balancing OECD and emerging market assets
  • Adding/removing assets
  • Hedging as revenue protection and debt support
  • Treatment of abandonment/letters of credit for abandonment
  • Payment waterfalls/account structures
  • Typical and variant distribution controls, reps& warranties, undertakings, events of default.
  • The “War Stories” in north sea single-field finance– examination of the deals that failed
  • Recent trends in north sea finance:
  • The “New Wave” of independents
  • The move by larger independents to corporate borrowing
  • The new independents’ needs and the banks’ response:
  • Single-field financing returns
  • “Stretched” borrowing bases
  • Subordinated/mezzanine products

Getting to Grips with Refinery Finance:

  • Refinery operations – from topping refineries to complex crackers
  • Greenfield or expansion financing?
  • Cashflow volatility – the key risk for lenders
  • Operational mitigation of volatility risk:
  • “Geographical” margin protection
  • Tolling-based structures
  • Hedging to reduce volatility
  • Debt structuring to mitigate lender risk, including:
  • Debt/equity balancing
  • Repayment profile optimisation
  • Cash sweeps
  • Distribution controls and information/other covenants
  • Refinery market analysis for lenders:
  • Choosing consultants
  • Scope of work for due diligence studies
  • Modelling/sizing debt for refineries
  • “Where has it gone wrong?” – a somewhat chequered history

Oil & Gas Transmission & Distribution Lending:

  • Trunk pipelines and distribution networks – very different animals
  • Oil and gas transmission pipelines – high fixed cost/multipartner undertakings:
  • Key risk factors – especially upstream supply issues, construction contracts and sale/offtake contracts
  • Balancing the interests of private and public sector players
  • Environmental/social issues – a “make-or-break” factor
  • Analysis of recent oil/gas pipeline financings
  • Gas storage & distribution finance:
  • Liberalised/regulated gas distribution has increased financing needs
  • Gas storage in depleted fields and salt caverns - developing tailored financing packages
  • Funding the acquisition and build-out of gas distribution networks
  • Financing gas metering
  • The role of regulation and its impact on financing

Liquefied Natural Gas Finance:

  • The growth of the LNG debt market
  • LNG liquefaction finance:
  • Risk profile of liquefaction projects, especially:
  • Sponsor/equity issues
  • Construction contracts – structure and risk allocation
  • LNG sale contracts
  • Arabian Gulf LNG projects – a detailed comparison:
  • Typical debt structures
  • Development of structures over time
  • LNG regas finance:
  • Structural drivers – especially supply, market, regulatory and regulatory issues
  • Features of recent regas financings in:
  • UK & Europe
  • USA
  • India
  • LNG ship finance:
  • The LNG shipping industry
  • Corporate vs. project debt
  • Structural drivers in project-based LNG vessel financing
  • Comparison of project debt structures
  • Recent trends:
  • Financing of integrated LNG chains
  • Changing downstream markets and trading patterns
  • Increasing flexibility in LNG sales and financing contracts

Other Downstream Finance – Petchem and Gas-to-Liquids:

  • The Petchem “flowchart” – from gas/naphtha-based feedstocks to end-products
  • The Middle-Eastern petrochemical wave – adding value to domestic gas resources:
  • Risk profile of petrochemical projects – especially:
  • Construction – issues and contractual structures
  • Technology – bankability and licensing
  • Feedstocks – volume, price and quality factors
  • Sales/Offtake – agency/licensing issues
  • Financing gas separation & treatment plants – the first step
  • Polyolefin projects – financing crackers and PE/PP plants
  • Increasing sophistication – aromatics and beyond
  • Gas-to-Liquids – financing clean diesel projects