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Title:France Exploration and Production (Upstream) Market Analysis and Outlook to 2020 -Drivers, Challenges, Fields, Blocks, Supply- demand and competitive landscapeM2PressWIRE, Apr 11, 2013

Database:

Newspaper Source Plus

France Exploration and Production (Upstream) Market

Analysis and Outlook to 2020 - Drivers, Challenges, Fields,

Blocks, Supply- demand and competitive landscape

Dublin - Research and Markets has announced the addition of the "France Exploration andProduction (Upstream) Market Analysis and Outlook to 2020 - Drivers, Challenges, Fields,Blocks, Supply- demand and competitive landscape" report to their offering.

France oil and gas Exploration and Production industry research work from OGAnalysis is acompulsory report for all analysts involved in the sector. It provides all the key trends andanalyzes the drivers and restraints of investing and operating in the market. Comprehensiveinformation on fields, blocks, companies, production and reserves is provided in the report.Further, supply and demand forecasts of oil and gas to 2020 are included in the report.

It identifies key investment opportunities in France Exploration and Production market and alsodetails the blocks on offer information. Key strategies and operations of each of the majorExploration and Production companies in the country are analyzed in detail.. It updates the majordeals and events in the industry from 2011 to 2012.

Reasons to Purchase

Make strategic and financial decisions based on industry trends and capital expenditureforecasts

Identify key business opportunities through detailed information on oil and gas fields andforecasted production information

Develop a clear and complete understanding of the industry through asset by assetinformation

Detailed Market Shares, company wise production and information on nature of industryallows you to easily beat your competition

Identify the success strategies and financial status of key companies operating in the

industry along with their strengths and weaknesses


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structurally flawed Mexican oil industry, where an under-funded Pemex is unable to supplyfinancing that the private sector is prevented from offering. The case for a reappraisal of thestructure of Mexico's oil sector has never been stronger.

The same applies to some other oil-rich countries. Iran has taken a similarly nationalistic

approach to oil developments, but, last month Seiffolah Jashnsaz, managing director of NationalIranian Oil Company, admitted that it will need foreign capital if it is to meet its plans to invest$25bn-30bn a year in its oil sector -- sums that are necessary, according to Jashnsaz, for thecountry to maintain its status within Opec over the next decade and a half.

But it seems unlikely that Pemex will be able to extricate itself from the operational, legal andfiscal straightjacket that dooms it to failure.

The same can be said of PdV; like Pemex, the Venezuelan NOC has considerable social-spending obligations and its strategy is driven partly by political, not commercial, considerations.Like Mexico, Venezuela's upstream sector is underperforming, partly because of under-funding,

but largely because of the government's decision to sack almost 20,000 engineers and otheroilfield workers in 2003. Crude production is just over 2m barrels a day (b/d), compared with3.5m b/d in the late 1990s. Projects that could have a significant positive effect on Venezuelanproduction -- heavy oilfields in the Orinoco Belt, for example -- require technical and financialinput from the private sector.

However, while economic conditions might suggest a softening of Venezuela's petro-nationalismwould be pragmatic, the government appears determined to exclude the private sector. PresidentHugo Chvez is nothing if not tenacious: last month, the country promulgated a law giving thestate majority control over oilfield services companies and, at the time of writing, it had takenover assets from 74 firms (see p27). The continuing harassment of private-sector investors could

undermine the efficiency of the oil sector's operating ability in the short term, but it also raisespolitical risk another few notches -- threatening investments in new ventures.

Contrast the Mexican or Venezuelan approach with the Brazilian model. Upstream investment isbooming, new discoveries continue to be made and production is at record levels. Petrobras,meanwhile, continues to prove as resourceful on the funding side of its business as it is on thetechnology side. Last month, the state-controlled firm signed an agreement with ChinaDevelopment Bank (CDB) through which it will receive a 10-year loan worth $10bn in exchangefor the promise of future oil supplies.

Petrobras is not the only company to have tapped the Chinese state for funding. In recent months,China has agreed loans-for-oil deals with Kazakhstan's KazMunaiGaz, Russia's Rosneft, Russianpipeline monopoly Transneft, PdV and Angola's Sonangol.

A need for innovation

Those agreements and their sheer size -- the two Russian loans, for example, amount to $25bn --indicate a firm expectation in China that oil demand will grow robustly; and securing future oilsupplies at a time of low demand and low prices is good business practice.
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But the loans also reflect a need for innovation in the energy-financing business (see p9). WithWestern banks generally reluctant to participate in project financing, Islamic financing is takingup more of the slack, as are multilateral lenders such as the European Bank for Reconstructionand Development (EBRD). EBRD loans in the first three months of the year amounted to aquarterly record of $1.1bn and were up by 64% on the year. And the bank says it will lend at

least $7bn this year, compared with $5.1bn in 2008.

Project finance remains even more scarce for low-carbon projects, calling for greater governmentintervention. The UK has made some progress with the offshore wind sector: new subsidiesannounced in April's budget (see p16) have already resulted in the decision to proceed with theLondon Array offshore wind project (see p17). However, subsidies alone may not be enough tostimulate investment on the necessary scale. In the short term, there must be a greater focus onencouraging bank lending.

In addition, success will depend on the selection of subsidy mechanisms that spread riskreasonably between the public and private sectors. There are, for example, potential weaknesses

in the Renewables Obligation, the mechanism in use in the UK for subsidising renewable-energyprojects. Funding under this system may, in the end, be greater than subsidies derived from feed-in tariffs, the preferred funding mechanism in Spain and Germany. But feed-in tariffs tend toprovide a more transparent and stable form of subsidy and may, therefore, prove more effectivein encouraging investment than the more volatile UK system (see p17).

Much too will depend on the price of carbon. In just six months' time, in Copenhagen, it willbecome clearer what policy support the world is prepared to give to green energy.


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Title:Iran to sell $80 mln bonds to fund upstream oil and gas projects By: Karimov, Fatih,Trend News Agency, Apr 12, 2014

Database:Newspaper Source Plus

Iran to sell $80 mln bonds to fund upstream oil and gas

projects

~~~~~~~~

Fatih Karimov

April 12--Iran will sell 2 trillion rials (about $80 million) worth of bonds to fund upstream oiland gas projects.

For the first time in the country, bonds will be used to finance upstream oil and gas projects,Iran's Fars news agency quoted Ali Sanginian, the managing director of Amin InvestmentCompany, as saying on April 12.

The upstream oil and gas sector is also commonly known as the exploration and productionsector.

Iran's oil ministry plans to issue9 billion worth of bonds in the current Iranian calendar year,the IRNA News Agency reported in December 2013.

The National Iranian Oil Company, the National Iranian Gas Company, National Iranian OilRefining and Distribution Company (NIORDC), and the National Iranian Petrochemical

Company will issue5 billion,1 billion,1 billion, and2 billion, respectively.

More than 40 trillion rials (about $1.6 billion) worth of bonds were sold three years ago tofinance South Pars gas field development plan, but none of the phases of the gas field has comeon stream yet.

The South Pars gas field covers an area of 9,700 square kilometers, 3,700 square kilometers ofwhich are in Iran's territorial waters in the Persian Gulf.

The remaining 6,000 square kilometers, i.e. North Dome, are in Qatar's territorial waters.

The Iranian gas field, which is divided into 29 phases, contains 14 trillion cubic meters of naturalgas, about eight percent of the world's reserves, and more than 18 billion barrels of LNGresources.


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Title:Asia Pacific Oil and Gas Industry Research Guide (Q1 2014) - Analysis of Upstream,Midstream and Downstream Infrastructure, Investments, Companies and Outlook to 2025M2PressWIRE, Mar 27, 2014

Database:

Newspaper Source Plus

Asia Pacific Oil and Gas Industry Research Guide (Q1 2014)

- Analysis of Upstream, Midstream and Downstream

Infrastructure, Investments, Companies and Outlook to

2025

Dublin - Research and Markets(http://www.researchandmarkets.com/research/zzlcm9/asia_pacific_oil)has announced the

addition of the "Asia Pacific Oil and Gas Industry Research Guide (Q1 2014)- Analysis ofUpstream, Midstream and Downstream Infrastructure, Investments, Companies and Outlook to2025" report to their offering.

Asia Pacific Oil and Gas Industry Research Guide is a comprehensive handbook on Asia Pacificoil and gas markets. The report analyzes in detail 18 markets in the region along their completeoil and gas value chain. Country wise forecasts of over 16 parameters including oil, gas,gasoline, diesel, LPG, fuel oil, LNG consumption and production in addition to GDP andPopulation forecasts are provided. Further, country wise details of exploration blocks, licensingrounds, refining capacity, coking, FCC, HCC capacity, liquefaction, regasification capacities andstorage capacities along with planned cross-country pipelines are provided in detail. Further,

complete details of over 200 refineries, 113 LNG Terminals, 450 storage terminals are provided.All potential investment opportunities in each country are also provided.

Scope

18 countries across Asia Pacific covered, which include-Australia, Brunei, China, India,Indonesia, Japan, Kazakhstan, Malaysia, Myanmar, New Zealand, Pakistan, Papua NewGuinea, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam

16 Parameters are forecasted annually for each country including- oil, gas, gasoline, LPG,diesel, fuel oil, LNG production and consumption along with GDP and Population

7 capacities are forecasted annually for each country including CDU, Coking, FCC,HCC, Liquefaction, Regasification and Storage Capacities

All potential investment and business opportunites are provided by country Detailed SWOT analysis for each of the 18 countries are provided Five leading companies along with their business description, SWOT and financial

analysis have been included

Companies Mentioned: CNPC, Sinopec, Pertamina, Petronas
http://www.researchandmarkets.com/research/zzlcm9/asia_pacific_oilhttp://www.researchandmarkets.com/research/zzlcm9/asia_pacific_oilhttp://www.researchandmarkets.com/research/zzlcm9/asia_pacific_oilhttp://www.researchandmarkets.com/research/zzlcm9/asia_pacific_oil


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Title:Upstream oil sector. Chemical Business, 09703136, Sep97, Vol. 11, Issue 2

Database:

Business Source Complete

UPSTREAM OIL SECTOR

Section:NEWS DESK

INDIAN SCENE

ACCORDING to reports, over the next 15 years to meet the bulging deficit in the availability ofpetroleum products, an investment of over Rs. 2100 billion in the upstream oil sector would be

required. The petroleum industry has estimated that the demand for petroleum products willdouble by 2007 to 155 million tonnes from the present 78 million tonnes The increasing importbill due to petroleum products has exerted a lot of pressure on the balance of payments. The higheconomic growth in the 9th plan (1997-2002) and 10th plan (2002-2007) and higher demand onaccount of liquid fuel requirements of power generation will further push up the demand forpetroleum products.


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Title:Upstream mainstream. By: Nelthorpe, Tom, Project Finance & Infrastructure Finance,17567866, Nov2010, Issue 315

Database:Business Source Complete

Upstream mainstream

Contents

1. The three bonds closed for Latin American drill-ships now provide offshore operatorswith a full range of capital markets options. Is a staggered draw-down now thecommercial banks' main competitive advantage?

2. High-yield, low repeatability

3.

Lancer's long march4. The father refinances, the son nears close5. RDSUDW,Ltd6. Lancer Finance Company7.

Norbe VIII/IX Finance Ltd

Latin American Oil & Gas

The three bonds closed for Latin American drill-ships now provide offshore operators with a fullrange of capital markets options. Is a staggered draw-down now the commercial banks' maincompetitive advantage?

As far as the operators of deepwater drillships in Latin America are concerned, the DeepwaterHorizon disaster was little more than a blip. US drilling operators face the possibility of tighterregulation, fewer opportunities and higher potential liability for accidents. But Brazil's nationaloil company, Petrobras, is pressing ahead with plans to charter large numbers of rigs for its pre-salt exploration and production programme.

The Petrobras charters are long-term, generous, and do not feature market price risk. Theyincreasingly come with local content requirements, part of Brazil's plans to develop ashipbuilding capability on a par with that of South Korea and Singapore. But these will largelyaffect forthcoming rounds of tenders, and do not affect sponsor's plans to finance existing

charters.

Until recently, Petrobras would also have been concerned with sponsors' ability to raise both debtand equity for rig construction and purchases. In the wake of the crisis, pricing jumped sharply,market rates for the more widely used rigs plunged, and a number of global rig operators lookedvery wobbly. What looked like an opportunity for a distressed asset buyer also seeded doubtsabout the ability of Brazil's sponsors to raise the equity they needed to fulfil their charters.
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The debt markets recovered rapidly. After a hard-fought restructuring, Grupo Schahin came toterms with its lender group on its Black Gold deal, with banks consenting to an extension on thedeal in exchange for higher pricing. The extension was needed because of delays in building thetwo rigs covered by the financing, which were being built at the Yantai Raffles shipyard inChina. The higher pricing essentially wiped out any benefits from the cheaper Chinese

construction contract, and hampered Schahin's ability to move on to its next project, BlackDiamond, but maintained Schain's bank following.

Towards the end of 2009, Odebrecht Oil & Gas closed a $1.34 million commercial bank andexport credit agency financing for its Norbe VIII and IX vessels. That financing, which consistedof a $274 million GIEK-covered Eksportfi-nans direct loan, $165 million direct Kexim loan,$135 million Kexim-covered loan and $770 million commercial bank loan, sold strongly, on theback of Odebrecht's size, respectable credit rating, and banks' willingness to return to theBrazilian offshore sector.

High-yield, low repeatability

But the most promising financing development for the smaller Brazilian operators took place inMexico. In April, Grupo R, a Mexican conglomerate with a long track record of providingoffshore services to Mexico's national oil company, Pemex, used a high-yield bond to help itcomplete the $655 million purchase of the PetroRig III from PetroMENA, which was inbankruptcy.

The $260 million high-yield bond priced much earlier than the close of the acquisition on 24February, at the tail end of the first spurt in project bond activity of 2010. The bond was ratedB3/B (Moody's/S&P), and priced at a discount of 2.869% and coupon of 11.875% for a yield of12.5%. Jeffries was lead arranger on the bonds, which complemented a much more reasonably-

priced BBVA-led $225 million senior secured bank deal, which had a margin of 375bp initially,rising to 400bp in years three and four and 425bp in year five.

Given this comparison in pricing, it was easy for commercial lenders to doubt that capitalmarkets could ever win a substantial slice of the rig financing market. Indeed, bondholders of theNorwegian shipping and oil services groups that fell victim to the crunch would have beeninclined to agree. The PetroRig bonds were second lien, and were necessary because PetroRig'scharter with Pemex was short, at five years, and reset to a market rate for the last three of that.With the $225 million in bank debt the maximum that the banks could fund at the time, theGarza family, which controlled Grupo R, could either look to outside equity providers or try thehigh yield route. In February 2010 it was easy for a lender to view the bond market as more of anequity substitute than a bank debt substitute. The degree of structuring on the debt bore thisverdict out.

Lancer's long march

But the run of balmy conditions in the US bond market continued throughout 2010, and at thesame time that PetroRig closed, rumours surfaced that Schahin was working with Nomura toarrange a bond deal for one of its fleet of rigs. Nomura did not have an established presence in
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the rig financing market, but had made hires from Merrill Lynch's principal finance group, whichhad completed several cross-border issues for Latin infrastructure issuers in the mid-90s.

Schahin needed to raise some equity for the Black Diamond portfolio, which is now in themarket for $1.4 billion in debt, including an $800 million commercial bank loan. While Schahin

might have been able to release some equity during a post-completion refinancing of the BlackGold vessels, the delays to those ships meant that Schahin had to use another asset to raise thisequity.

Nomura pitched Lancer, which can operate in water depths of 1,500m, drill to depths of 6,000m,and was built in 1977, to Schahin as the best candidate. The ship is operational, and benefitsfrom a charter with Petrobras running to 2016, but has an estimated remaining useful life of 11.5years. Getting a financing for Lancer to investment grade, and therefore raising cost-effectivecapital with high leverage for recycling, required intensive structuring.

The resulting deal resembled a securitisation much more closely than a conventional project

bond, with multiple, detailed, investor protections designed to distance the asset from theSchahin credit as much as possible. The $270 million issue received ratings of Baa3/BBB-sf(Moody's/ Fitch, the sf denoting a structured finance issue), in part on the back of a complex cashwaterfall structure and $18.5 million in funded reserves. According to Roland Vigne, a vice-president at Nomura in Sao Paulo "the advantage of using the structure is you achieve muchbetter leverage and can lower your borrowing costs substantially."

The key to getting agencies, and putative buyers of the private placement, comfortable, was incoming up with creditable valuations for the vessel both with and without a charter. Thefinancing is designed to amortize completely over its life, but a bondholder would look verycarefully at loan-to-value ratios. These govern the ability of bondholders to trap cash, in the

event that the residual value is not enough to pay the last few debt repayments, and accelerateprepayment, if the loan to value ratio including the charter, and thus the present value of charterrevenues, fell below a certain level. The bondholders, through the trustee, also have the ability toenforce their collateral and sell the asset, if need be.

According to Fitch's assessment, Lancer has a 60% ratio at issuance, and 15-35% in 2016. Its 33years of age is belied by some extensive renovations to its topside equipment. The vessel hasalso averaged 96.3% uptime for the last ten years, indicating that Schahin, whatever its financialresources, is a capable operator, one of the few with experience operating a deepwater vessel forPetrobras and Petrobras has been chartering the vessel since 1992.

One feature of the charter is that on top of the $238,500 day rate, Petrobras pays Schahin aseparate taxable operating payment to Schahin, which is pledged to bondholder, but only meetsabout 40% of operating costs. The remainder are paid from the bottom of the cash waterfall, witha trap on cash at the bottom is the debt service coverage ratio falls below 1.4x. This feature ispresent on the more recent generation of charters, and the inclusion of the operating payment inthe waterfall simply allows bondholders to take control of the vessel more easily if the financingdefaults.


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The issuer, British Virgin Islands-registered Lancer Finance Company, Delaware registeredcharter counterparty, Turasoria SA LLC, and Panama-registered ship-owner, Turasoria SA, arealso made bankruptcy remote from Schahin using a pledge of shares, granting the trustee proxypower to vote on bankruptcy, and because to drag the project into a bankruptcy proceeding mightallow Petrobras to cancel the charter.

The bonds closed on 21 October, after an extensive period of tightening and tweaking of thedocumentation. This long lead-time was natural, according to one participant in the deal, giventhe challenges in getting a single-asset financing to investment grade, and the need to adaptstructures in use in other industries, most notably conventional shipping and toll roads, to theproject.

The financing was ready to go in March, but was delayed after the ban on offshore drilling in theUS took effect, since the ban had the potential to seriously affect residual values and potentialbond buyers were briefly concerned that Petrobras might be subject to a similar ban. The finalcoupon on the deal, at 5.5%, was a little under half PetroRig's, though yields on the seven-year

Treasury had fallen by roughly 1.2 percentage points between the two deals.

The father refinances, the son nears close

Neither deal featured any construction risk, however, a boost to the commercial lenders' positionthat bondholders could not assess this risk as well as the banks. Late in 2009, just as it wasputting the finishing touches to the Norbe VIII and IX financings, Odebrecht was trying todecide which of its existing rig assets would make the best candidate for a capital markets deal."We wanted to diversify our funding sources," says Marco Rabello, the chief financial officer ofOdebrecht Oil & Gas, "and had to decide whether one or both of the Norbe VIII and IX vessels,or the Norbe VI rig, which was financed a little earlier, would work best".

The Norbe VI financing, a $440 million deal led by ABN AMRO, closed long before the crunch.The financings for the later two rigs reflected post-crunch bank pricing expectations, and the rigshave fixed-price ten-year charters that were certain to be appealing to bondholders. Odebrechtdecided to take the later two rigs to market, mandating HSBC and Santander to lead the deal,with Deutsche and Banco do Brasil coming in at a later date.

The rigs are close to completion, with the VIII vessel 95% complete and due for a January 2011delivery and IX 88% complete, and due in April that year, according to Fitch's BBBsf rating inlate October. The rigs are in commissioning and the charters with Petrobras allow for a six-month delay. Bondholders would rely on a full refund guarantee from Daewoo Shipping andMarine Engineering, which is building the rigs, backed up in turn by Kexim letters of credit.

But the size of the proposed financing for the two Norbe rigs -- $1.5 billion -dwarfed the earliertwo rig deals, Rabello notes that Odebrecht would have to call on bondholders who were familiarwith Odebrecht and sister companies such as Braskem that had already visited the bond markets.The Brazilian conglomerate, with a series of toll road issues in Peru, and recent success in theBrazilian roads sector with the Rota das Bandeiras financing, has experience of opening upproject bond markets.
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The bonds, with a 10.5-year maturity, priced at 99.818% of par, at a spread of 370.3bp over theequivalent Treasury, for a coupon of 6.35%, and a yield of 6.375%. The biggest challenge, notesHelena Ramos, structured operations manager at Odebrecht Oil & Gas, was structuring the bondsin such a way as to minimise refinancing risk. "The agencies do not like to award investmentgrade ratings to transactions with refinancing risk," adds Rabello.

The Norbe rigs have a very long useful life -- up to 40 years -- but the sponsors had toincorporate a cash trap in the final six semesters of the charter that would fund a retentionaccount, which would then be used to pay down the 30% balloon on the bonds at maturity. Thissolves in part the anxieties that bondholders might have about being left with a drill-ship, ratherthan cash, in 2021. The issuer for the two rigs, Norbe VIII/IX Finance Ltd, lends the proceeds onto separate operating companies, and while the assets are cross-collateralised, the charters withPetrobras do not default.

Norte proves that bonds are possible for assets under construction, if the charters are long andlucrative enough, if the construction security package is rock-solid, and if the sponsor is

experienced. Odebrecht's Ramos notes that while the sponsor did not guarantee the project'soperating performance its size and experience were important to investors. It would, agreesRabello, be possible to finance a new drillship from scratch in the bond market, though the costof carry would be a heavy one.

As if to stress this point, Odebrecht's next two drill-ships, ODN1 and ODNII, will be financedwith a similar cast of commercial banks (roughly $900 million) and export credit agencies ($400million). The pricing on this deal, dubbed Son of Norbe, is likely to be much keener than the twoparents, maybe by as much as 100bp, at about 240bp over Libor making a refinancing much lessattractive. Interest in the deal, say Latin syndications bankers, was strong. The leads, BNP andHSBC, brought in Banco do Brasil, Banesto, BTMU, Caja Madrid, Citigroup, Credit Agricole,

DNB Nor, ING, ItauBBA, Banca Intesa, Natixis, Santander, SG, SMBC, Unicredit and WestLB.The three bond deals look like a natural progression, but their timing was a matter of luck, andthe three sponsors enjoy very different circumstances.

Still, Rabello says that the Norbe VI rig could still be a possible candidate for a bondrefinancing. There are, moreover, a number of Brazilian operators such as Petroserv, QuirozGalvao and Etesco that have financed their vessels with loan-to-value-based ship financestructures, and they should see some immediate benefits in terms of leverage by refinancing witha contract cashflow-based bond deal. As Nomura's Vigne notes, even where ECA-backed dealsmake commercial bank financing very competitive, a bond market option can have a beneficialeffect on keeping this pricing low.

What looked like an opportunity for a distressed asset buyer also seeded doubts about the abilityof Brazil's sponsors to raise the equity they needed to fulfil their charters.

The key to getting agencies, and putative buyers of the private placement, comfortable, was incoming up with creditable valuations for the vessel both with and without a charter. Thefinancing is designed to amortize completely over its life, but a bondholder would look verycarefully at loan-to-value ratios.


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The Brazilian conglomerate, with a series of toll road issues in Peru, and recent success in theBrazilian roads sector with the Rota das Bandeiras financing, has experience of opening upproject bond markets.

RDSUDW,Ltd

Status: Bonds closed 24 February, bank debt closed 10 March, funded 30 April

Size: $655 million

Location: Mexico

Description: Acquisition of semi-submersible ultra-deepwater drill-ship

Sponsor: Grupo R

Debt: $225 million non-recourse bank loan and $260 million bond tranche

Lead arranger and financial adviser: BBVA

Bookrunners: UniCredit, Natixis, Banco Espirito Santo, NIBC and WestLB

Bond bookrunner: Jefferies

Lender legal adviser and sponsor bond counsel: Clifford Chance

Bond counsel: White & Case

Lancer Finance Company

Status: Priced 21 October

Size: $270 million

Location: Brazil

Description: Recapitalisation of mid-depth drill-ship

Sponsor: Schahin Holdings

Maturity: 6 years

Coupon: 5.5%

Underwriter: Nomura
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Collateral agent: WestLB

Trustee: Deutsche

Underwriter legal: Hogan Lovells (international); Souza Cescon (local)

Sponsor legal: Linklaters (international), Lefosse (local)

Insurance: Moore-McNeil

Market consultant: ODS Petrodata

Independent engineer: Bureau Veritas

Norbe VIII/IX Finance Ltd

Status: Priced 10 November

Size: $1.5 billion

Location: Brazil

Description: Refinancing of construction debt for two ultra-deepwater ships

Sponsor: Odebrecht Oil & Gas

Maturity: 10.5 years

Bookrunners: Santander, HSBC, Banco do Brasil, Deutsche

Coupon: 6.35%

Sponsor legal: Davis Polk

Underwriter legal: White & Case (international), Souza Cescon (local)

Model auditor: PwC

Market consultant: ODS Petrodata

Insurance: Aon
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Title:Are Nigeria's banks ready for an upstream revival? Project Finance & InfrastructureFinance, 17567866, Dec2010


Are Nigeria's banks ready for an upstream revival?

Contents

1. NGL2 has local fans2. The start of a domestic independent sector3. Pausing for breath but LNG looks promising

A series of oil major-driven financings are prompting renewed activity in Nigeria's recoveringdomestic lending market. But legislative stasis and persistent violence are holding back the birth

of an independent sector. By Sarah Rundell

A year ago Nigeria's oil and gas industry would have struggled to raise any money in the localdebt market. The banking sector took a collective battering in 2009 when nine banks failed, someof them national champions, forcing a humiliating $4 billion government bail-out. Now a brisk$1.1 billion debt financing for Nigeria's state oil com-pany NNPC and Exxon Mobil's natur-algas liquids project NGL2 shows that signs of life and liquidity returning to the country's pro-jectfinance market. It's a rare bright spot in a sector where the deal pipeline has all but ground to ahalt ahead of elections in 2011 and as a Petroleum Industry Bill remains stalled.

NGL2 has local fans

Lead arranger Standard Chartered and Nigeria's United Bank for Africa (UBA) expect bids in bymid-December for NGL2, in time for a year-end close on the seven-year deal, with pricing peg-ged around 350bp above Libor. Sponsor ExxonMobil is providing 51% of the total, with the restcoming from international and local banks for a project that will fund expanding facilitiesconnected to Exxon's Qua Iboe energy complex in Akwa Ibom state in the Niger Delta, includingnew oil and gas wells.

The deal will also refinance the final portion of a three-year $265 million term loan that thesponsors put in place in 2009 to cover completion costs of the expansion, say bankers close tothe deal. The NGL2 plant processes around 950 cubic feet per day of rich gas and produces

45,000 barrels per day (bpd) of natural gas liquids for fractionation into butane, propane andpentanes.

Although international banks will finance the bulk of the project, local banks are able to competeon margin and tenor, and are expected to soak up an estimated $200 mil-lion between them.Lagos-based bankers say it's a sought after deal amongst top-tier names including First Bank,Guaranty Trust, Stanbic IBTC, the Nigeria unit of South Africa's Standard Bank, and Zenith
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Bank, since local lenders now have repaired balance sheets and renewed naira and dollarliquidity.

The start of a domestic independent sector

These banks will also benefit from a steady pipeline of small upstream deals that are within theirfunding reach as international oil companies start to hand over their fallow, shallow and onshoreacerage. They are set to bene-fit from a shift towards local content, outlined both in the newpetroleum bill, which seeks to end the major oil groups' grip on 90% of Nigeria's re-serves, infavour of newcomers and independents, and in Nigeria's Local Content Bill, passed in April,which gives domestic firms priority in the awarding of oil blocks. The bonanza, which could seelocal groups accessing an estimated 120 fallow fields off Nigeria, holding up to 120 millionbarrels of oil, has already begun.

Last March independent oil and gas producer Afren closed a $450 million reserve-based debtfacility for the development of its offshore Ebok field. BNP, Natixis and Credit Agricole led the

five-year loan, repayable semi-annually with a margin of between 450bp and 550bp over Libor.The initial deal is for $150 million but the loan can be increased to the full amount to fund anysubsequent phases of the Ebok field, in which Afren bought a stake in 2007. Exxon discoveredthe field in 1968 and thought it had a capacity of 25 million barrels of oil. That is now at 105million with an upside of 600 million barrels.

A flurry of local interest has also centred around oil giant Shell's decision to sell three onshoreand shallow water assets located in the northwestern part of the Niger Delta that includes 30wells, with a production capacity of around 50,000 barrels of oil equivalent per day. The Shellsale was the spur for the formation of a consortium of indigenous groups seeking both newfinancing and to refinance existing deals from the local market, say Lagos bankers.

But bank debt won't come cheap for Nigeria's new players. International banks are increasinglywary of financ-ing onshore and shallow water assets in the Nigeria Delta, where the in-surgencyhas pushed projects offshore and pricing skywards. Local banks are less worried about the riskbut spon-sors will still have to pay a high price for liquidity. It could push prices up to between700-800bp over Libor, pre-dicts one banker. Tenors beyond seven years are also a stretch, givenNigeria's banks' ongoing struggle to match liabilities with long-term borrowing themselves.

Pausing for breath but LNG looks promising

Upstream and development financing activity for small indigenous operators may have pickedup, but demand from international oil companies has all but ground to a halt. The big groupshave stalled financings on projects until the much-anticipated petroleum bill is passed, whenuncertainty around the future regulatory and tax landscape should clear up. Shell says it has some$40 billion worth of potential investment in deepwater oil projects in Nigeria on hold and UNfigures show foreign direct investment, mostly in the petroleum sector, sank to $5.85 billion in2009 from $13.96 billion in 2006. Political uncertainties ahead of next year's election have actedas another brake, as project developers hold fire lest the investment landscape changes again."The Nigerian government is the biggest player in the oil and gas industry," laments one banker.
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Bankers are looking to a future pipeline in 2011/2012 when the bill should have passed andwould stimulate a steady deal pipeline both from internationals rejuvenating mothballed projects,and Nigeria's reformed NNPC coming to the market in search of debt. Under the proposedlegislation NNPC will be stripped down to a profit-driven firm that can fund its own share of thejoint ventures through its own earnings and by raising money on the capital markets.While

greenfield programmes are on hold the market has turned its focus to brownfield sites. Bankershope the NGL2 project will be followed by more loans from the programme and by a significantnew satellite financing, the $4 billion Satellite 2 oil field financing. The first Satellite field closedin 2005, with a margin of below 200bp. It directly funded three new oil fields with a seven-yearuncovered deal split into a $270 million international loan, a $90 million local bank loan and a$250 million direct loan from ExxonMobil.

Other deals in the pipeline include Nigeria LNG, or NLNG, a joint venture that liquefies naturalgas for export, and whose shareholders includ NNPC, Shell, Total and Eni, which is reportedlyapproaching international banks in search of $2 billion in financing. Standard Char-tered andUBA are work-ing on the deal, with quotes for tenors put bet-ween 7 to 10 years, one banker

said. It is believed that part of the new loan will be used for upstream gas gather-ing facilities toensure gas sup-plies to the existing six trains. The $1 billion project loan from 2002 on the assethas nearly been repaid.There is still no final investment decision on the $3 billion Brass LNGventure, which has suffered long delays since the joint venture between the NNPC, Agip,ConocoPhillips and Total got off the ground in 2004. The pro-ject, which is designed to export10 mil-lion tonnes of LNG per year from 2012, has been hit by violence and in-stability in theNiger region and changes to the tax regime. LNG liquefaction plants in Nigeria have alsosuffered from political prevarication and a shift in energy policy towards diverting gas awayfrom export and towards inter-nal use to feed Nigeria's own desperate power needs.

Still, this shift made local gas oper-ators more confident in their plans to invest and borrow.AccuGas, a wholly owned subsidiary of Seven Energy International, which trades as SeptaEnergy in Nigeria and is a first-mover in the domestic gas market, signed a $70 million eight-year project finance facility with Stanbic IBTC Bank and UBA in June. Priced at 800bp overLibor, the facility finances AccuGas's pipeline project in Akwa Ibom State and includes theconstruction of a new 65km pipeline and a gas and liquids processing facility. It's the first phasein Septa Energy's plans to use the Niger Delta's gas reserves to meet the growing energy demandfrom power plants and industrial users in the region.The developments constitute good news, inthat Nigeria's banks are again putting their balance sheets to work for the right projects. Theirappetite for NGL2 illustrates how the banking crisis weeded out weaker players, allowing aflight to quality. In fact, Lagos executives say banks' ability and willingness to lend has neverbeen as much of a problem as Nigeria's shifting political terrain and a desperate need for reform.The stalled bill is their main hope, but until it is passed, the industry remains in a state of limbo.


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Title:FINANCIERS: DEBT-MARKET SITUATION COULD HAVE VARYING EFFECTON UPSTREAM CAPITAL ACCESS. By: Stell, Jeannie, Oil & Gas Investor - This

Week, 19405189, 8/27/2007, Vol. 15, Issue 34Database:Business Source Complete

FINANCIERS: DEBT-MARKET SITUATION COULD

HAVE VARYING EFFECT ON UPSTREAM CAPITAL

ACCESS

Current credit markets have not had much effect on energy capital, according to severalfinanciers. "It's probably factored in a little bit in the leverage we are anticipating for

acquisitions," says David Hayes, principal of Dallas-based Natural Gas Partners.

"If we looked at a $100-million acquisition transaction two months ago, we might have said wecould get $60 million of conventional bank debt. Now, those expectations might be tempered alittle bit, especially if it is a second-lien situation.

"But none of the deals we are doing are dependant on whether it is 60% leverage or 50%leverage. It's not going to make or break them. Relative to the broader market, it's not a hugeeffect on our business. I think there is probably a little pressure on (asset) pricing, but I haven'tseen any yet."

Gary Stone, vice president, engineering, Five States Energy Capital LLC of Dallas, says, "We'renot seeing any immediate effects from the sub-prime lending problem or any effects frominterest rates. Money is still prevalent in this industry. Many E&Ps have very little borrowings.Most companies are cash-rich and have minimum amounts borrowed."

Five States recently sold its E&P assets and is currently investing directly in E&P companies andprojects. "The bigger issue, although ironic," he says, "is that the one group that you would thinkwould have the most money has the least, and that's the independents. If there is an E&P thatneeds $300 million, the capital market is throwing money at them. If an independent needs $3million for additional drilling, or to put in a waterflood, that's too small for many capitalproviders to mess with.

"Our sweet spot is $5- to $15 million, and we can go up to $30 million. We generally like 10% to20% equity, but it depends on the deal."

Some bankers see opportunity for energy-capital lenders and investors as traditional bankstighten credit. "We haven't seen any effects of the sub-prime market upset yet, but it might be toosoon to tell," says Mark D. Hull, vice president of New York-based Prospect CapitalManagement LLC.


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"We think that it could, in fact, help us. When liquidity leaves the market, people who haveliquidity can find opportunity. We focus on mezzanine lending, and our debt is more attractivenow that a lot of the cheap debt has left the market."

Most energy investments are not as tied to the broader economy as generalist business. "We are

seeing a lot of opportunities and the risk-reward profile is getting better," Hull says. "Regardlessof the shake-up in the debt markets, we're doing okay. We're long-term investors so we try not tolet short-term swings affect our long-term deals."

~~~~~~~~

By Jeannie Stell


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Title:Donggi-Senoro upstream financing closes. Project Finance & Infrastructure Finance,17567866, Jan2014


Donggi-Senoro upstream financing closes

Medco has closed a $260 million seven-year reserves based loan for the Donggi-Senoroupstream LNG project, located in Central Sulawesi province, Indonesia.

Medco has closed a $260 million seven-year reserves based loan for the Donggi-Senoroupstream LNG project, located in Central Sulawesi province, Indonesia.

The sponsors signed the financing in July last year but have been waiting on a few conditionsprecedent to be met before closing the financing. The sponsors have now drawn on the debt and

will use part of the proceeds to fund a one off $30 million dividend to reimburse themselves forsome of the equity they have put into the project.

Bank Mandiri and Standard Chartered underwrote the entire financing last year for the projectand were joined shortly afterwards by another lender, which is understood to be ANZ. The leadarrangers have now launched a general syndication to the market, which they are expected toclose sometime in the first half of this year.

The project entails the development of conventional natural gas resources in Sulawesi asfeedstock for a two million tonnes per year LNG plant being constructed by Medco and itsconsortium partners Mitsubishi, Kogas and Pertamina. The sponsors are providing completion

support for the project during the construction phase but the loan will revert to a limited recoursefacility after certain tests are met.


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Title:Oando Energy Resources secures funding for acquisition of Nigeria upstream oil and gasbusiness of ConocoPhillips. African Business News, 2/2/2014

Database:Newspaper Source Plus

Oando Energy Resources secures funding for acquisition of

Nigeria upstream oil and gas business of ConocoPhillips

Oando Energy Resources, a company focused on oil and gas exploration and production inNigeria, on Friday announced that, further to its press releases dated December 20, 2012,September 16, 2013 and November 28, 2013, it has, subject to, amongst other things, TSXapproval, secured funding for the closure of the acquisition of the Nigerian Upstream Oil and

Gas Business of ConocoPhillips.

The Company currently estimates that the net purchase price payable to complete theConocoPhillips Acquisition will be approx. US$1.05 billion (after deducting payment of theUS$450 million deposit previously paid, an additional US$50 million to be paid and givingeffect to expected adjustments as of the Outside Date). Oando Energy Resources expects to fundpayment of the Net Purchase Price using:

- funds from the corporate facility and reserve-based loan agreement with third party lenders, asannounced today [January 31, 2014];

- proceeds from the proposed private placement of units of the Company, subject to approval bythe Toronto Stock Exchange ("TSX"), as announced on January 28, 2014; and

- a convertible loan from Oando Plc, the 94.6% shareholder of the Company, subject to, amongstother things, TSX approval.

Pursuant to an amendment agreement executed with ConocoPhillips, Oando Energy Resourcesand ConocoPhillips agreed to extend the outside date for completion of the ConocoPhillipsAcquisition from January 31, 2014 to February 28, 2014. As part of this agreement, OER willpay an additional US$50 million towards the Acquisition for a total deposit of US$500 million.

Closing of the ConocoPhillips Acquisition remains subject to satisfaction of closing conditions,including the anticipated consent of the Honourable Minister of Petroleum Resources in Nigeria.


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Title:Yuzhno: Upstream unleashed. Project Finance & Infrastructure Finance, 17567866,Jun2011


Yuzhno: Upstream unleashed

Contents

1. Severneftegazprom

The Yuzhno-Russkoye oil and gas condensate field development financing reached full financialclose on 25 May, with first disbursement taking place on 27 May.

The Yuzhno-Russkoye oil and gas condensate field development financing reached full financialclose on 25 May, with first disbursement taking place on 27 May. The eight-year minipermfinancing follows on from two bridge loans, and suggests that foreign lenders are now willing tocountenance full project financings, for Russian companies, governed by Russian law.

The project is the first onshore upstream oil and gas project financing in Russia. First gasproduction was in October 2007 and by late 2009 the field achieved plateau levels of productionequivalent to 25 billion cubic metres per year. This level of production is forecast to persist until2020.

In 2009 the sponsors, at that time Gazprom, with 75%, and BASF's Wintershall, with 25%,closed a one-year bridge loan split into dollar and euro tranches. Societe Generale, BNP Paribas,Credit Agricole, ING, Citi, Intesa, UniCredit, Mizuho and SMBC were the bridge's mandatedlead arrangers. Wintershall's tranches accounted for Eu68 million and $380 million of the bridge,priced at 125bp. Gazprom's debt was split Eu125 million and $705 million, carrying a hefty450bp margin.

E.ON completed the acquisition of a 25% share in the project later that year, in return forGazprom taking over a 49% interest in the Russian company Gerosgaz from E.ON Ruhrgas.Wintershall owns another 10% economic interest in the project through non-voting preferenceshares, so their economic split of the project is Gazprom, 40%, Wintershall, 35% and E.ON,

25%.

The three sponsors refinanced the bridge loan in June 2010, with a new nine-month bridge.Pricing on the Gazprom tranches (Eu77 million and $434 million) was reduced to 175bp, and onthe Wintershall tranches (Eu68 million and Eu380 million) to 62.5bp. The E.ON tranches (Eu48million and $271 million) carried the lower margin.
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The three sponsors then looked to put in place a long-term financing for the project, backed bytake-or-pay gas sales agreements. The sponsors issued requests for proposals for the projectfinancing on 29 July 2010.

Societe Generale was named financial adviser, and 13 banks committed to the financing in

October 2010. Mandated lead arrangers were Gazprombank, Intesa, BTMU, Credit Agricole,ING, Mizuho, Natixis, Societe Generale, SMBC, and UniCredit. BNP Paribas and WestLB tooklead arranger status, with DZ Bank classed as a participant. Bank appetite was strong for theproject, as the deal was around 60% oversubscribed, with Eu1.649 billion ($2.394 billion)equivalent in commitments from the 13 banks.

The banks signed the project's loan agreement on 16 March, but it took two months to fulfillconditions precedent and finalise the project documentation. This is because the project's gassales agreements are structured under Russian law, presenting enforcement challenges andmaking the sponsor guarantee and indemnity package all the more crucial to the lenders.

Even though it took two months, sources involved in the deal have stressed that finalising theproject documentation was a smooth process with very few disputed points. Getting internalapproval from the sponsors took some time, and there were some tweaks round the edges of theirsecurity packages. The sponsors also spent time finalising the wording of their request to drawon the facilities.

The financing is comprised of $1.53 billion equivalent in multi-currency debt and $322 millionin equity. Mandated lead arranger status goes to 10 banks: Gazprombank, Intesa, BTMU, CreditAgricole, ING, Mizuho, Natixis, Societe Generale, SMBC, and UniCredit. BNP Paribas andWestLB took lead arranger status, with DZ Bank classed as a participant.

The eight-year debt is split between a dollar tranche, a euro tranche and a rouble tranche. Therationale behind the rouble tranche is that it will decrease the project's hedging requirements, asthe project's revenue will be in local currency.

The split between euro and dollar tranches is a legacy of the project's bridge loans. Thisarrangement also reflects the fact that dollars are Gazprom's currency of choice, because itsaccounts are denominated in dollars, whereas the two German sponsors operate in euros.

The Eu474 million ($687 million) term loan and the $657.4 term loan both priced at the mid-200bp range over their respective benchmarks. The contributions from all lenders are splitbetween the dollar and euro tranches, although the banks took varying ticket sizes.

The R5.9 billion ($208.5 million) tranche, which comes solely from Gazprombank, features afixed interest rate of 11.4%. The deal is highly leveraged, with gearing at 83%. SponsorsGazprom, BASF/ Wintershall and E.ON are providing $322 million in equity to round out thefinancing.


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The project has an annual cash sweep, with all cash left at the bottom of the project's cashwaterfall split between the lenders and sponsors 70:30. The project also has three reserveaccounts, an expenditure reserve account and two debt service reserve accounts.

Furthermore, the sponsors can only pay their 30% share of the cash into accounts not pledged to

the lenders if the reserves accounts are filled to a required level, and if debt service due on therepayment date has been made. The cash sweep means that under the base case the loan will berepaid by mid-2017.

Although the sponsor group features German participants, the project company,Severneftgazprom, is registered in Russia and the gas supply contracts are denominated in rublesand regulated by Russian law.

Although Yuzhno closed without ECA support, the upcoming RusVinyl PVC project featuresECA tranches, with BNP Paribas, HSBC and ING as mandated lead arrangers. The tranche willcome in at around Eu450 million ($633.6 million), split between Coface, with Eu350 million,

and ONDD, with Eu100 million. The ECAs will cover 95% of the political risk but thecommercial risk coverage is expected to be lower.

Severneftegazprom

Status: Financial close 25 May 2011

Size: Eu1.3 billion equivalent.

Location: Yamal-Nenets autonomous area of the Tyumen Region, Siberia, Russia.

Description: Development of the Yuzhno-Russkoye field, with reserves of 180.9 billion cubicmeters of gas and 20.35 million tons of oil and gas condensate.

Sponsors: Gazprom (40%), BASF/Wintershall (35%), E.ON (25%).

Lenders: Gazprombank, Intesa, BTMU, Credit Agricole, ING, Mizuho, Natixis, SocieteGenerale, SMBC, UniCredit, BNP Paribas, WestLB, DZ Bank.

Lender legal: Linklaters

Sponsor legal: Herbert Smith

Sponsor financial advisers: Societe Generale and Russian Project Finance Bank

Insurance adviser: Willis.

Tax adviser: Ernst & Young

Reserves study: DeGolyer & Macnaughton, Model audit: PKF
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Title:Horizon closes financing for upstream projects. Project Finance & Infrastructure Finance,17567866, Apr2012


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Horizon closes financing for upstream projects

Horizon oil has closed a $160 million financing for the development of oilfields in China, NewZealand and Papau New Guinea

Horizon Oil has closed a $160 million financing for the development of oilfields in China, NewZealand and Papau New Guinea. The 6-year revolving credit facility will be used to develop the

Maari oil field off the Northern coast of the New Zealand, the Beibi oil field in the South ChinaSea and PRL 4 Stanley gas field in Papau New Guinea.

Standard Chartered, ANZ, BNP Paribas and the Commonwealth Bank of Australia provided thefinancing. Due to the geographic scope of the project a range of legal advisors were used; King& Wood Mallesons, Blake Dawson, Appleby, Farara Kerins, Gardere Wynne Sewell, GreenbergTraurig and Bell Gully were legal advisors for the sponsors. AAR, Conyers Dill & Pearnman,Walkers Global, McDonald Carano Wilson and Buddle Findlay were legal advisors for thelenders.


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Title:Unlocking upstream finance. By: Cumming, Walter, Petroleum Economist, 0306395X,Sep2011, Vol. 78, Issue 7


HTML Full Text

Unlocking upstream finance

Contents

1. Banks add value2. Syndication: a popular model3. Increased lending

Oil and gas companies with prospective North Sea acreage and diverse portfolios remainattractive to lenders, says Walter Cumming

FINANCIAL uncertainty has seen many oil and gas businesses prudently waiting out the stormin recent years, preserving cash and paying down debt where possible. Today, while far from thefinancial activity levels of 2007/8, confidence is gradually returning to the market. As a result,firms are assessing ways to use strengthened balance sheets to exploit the economic recovery andimprove market position.

Looking ahead to 2012, companies will be making decisions in the context of not only higher oil

prices, but also global influences such as tighter regulation in the aftermath of the DeepwaterHorizon disaster; unrest in the Middle East and North Africa and; in the North Sea, the UKgovernment's recent tax increase.

The phrase cautious optimism sums up where the oil and gas financial sector is right now. Withoil prices rising for the past year, resulting in a belief that the worst of the economic downturnhas passed, the oil and gas sector is back in the sights of the finance industry, as corporate bankslook to increase lending.

Banks add value

Companies can do much to improve their attractiveness to lenders, including building thebalance sheet, raising equity, diversifying risk and growing through mergers and acquisitions(M&A). They should look at banks that can provide more than just debt, but can add value inareas such as foreign exchange, bonding, hedging and investment banking.

An important step for any company seeking funds is to generate confidence in the opportunityand a clear indication of risk reduction. A strong, focused and credible management team is vital.
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A company with a strong balance between production and growth potential will have a muchgreater chance of securing investors' attention.

Exploration and production (E&P) firms need a well-managed output record, including stableproduction spread across a number of assets. By contrast, a small E&P player with a focus

perhaps on one asset, so less critical mass, represents a greater risk, although each case isconsidered on its merits.

In the oilfield-services sector, a strong and credible management team is also crucial; with thebusiness focus more on operational than capital expenditure; a diverse spread of businessstreams; the potential for growth; and a focus on quality throughout the organisation.

There is a growing trend towards club deals in terms of reserve-based lending, where companiesnegotiate with a number of lenders to create a group with a significant financial base. Such amodel can have significant benefits for banks, because they spread associated risks and increaseawareness of fellow club members. While for the company, such arrangements do not carry a fee

for underwriting the deal.

A disadvantage of this model is difficulty achieving synchronisation among all the clubmembers, which can lead to protracted processes.

Syndication: a popular model

Syndication is another popular model, although such deals are underwritten and are moreexpensive than club arrangements. One concern with this type of arrangement is that thecompany involved may have limited choice, and knowledge, of which banks join the syndicate.

A third option for smaller companies is a bi-lateral line arrangement, with a two-way linkbetween the client and the bank. The client can have separate agreements with a number ofbanks, which also has significant benefits through spreading risk and separately negotiating priceand terms. A down side is that often bi-lateral partners each have separate agreements that mustbe managed during the life of the loan.

The short-term fortunes of the oil and gas industry mirror those of the global economy, with anemphasis on rebuilding confidence eroded over the previous two years. The strong outlook foroil prices will drive investment, acquisitions and project development, as it helps to make thefinancial models work and makes investment decisions clearer.

In the UK North Sea, the majors' programme of divestment will continue. Increased taxes willcreate significant challenges, as buyers and sellers take stock and rerun investment models -some planned projects have already been cancelled. But with a significant number of small andmedium-sized finds being made, good access to markets and a skilled workforce, the North Searemains attractive for investors.

North America can expect increased upstream investment opportunities, despite tougherregulation post Deepwater Horizon. Questions will focus on the cost of change and firms will
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look to form partnerships and joint ventures to mitigate risk and spread the increased costs.Tighter US regulation, perhaps more in line with that in place in the North Sea, may pricesmaller players out of the market and lead to increased M&A activity. In response, companiesmust revisit risk and business strategies and perhaps change course to ensure success.

Barclays Corporate's approach to the sector has always been balanced in terms of lending welland avoiding losses. Last year, the oil and gas team committed $1 billion to a mix of clientsworldwide, and 2011 has followed that successful trend.

Last year, the bank completed deals in areas such as the UK Continental Shelf, the US, Asia-Pacific and the Middle East; with companies including Subsea 7, FMC Technologies, Ensco andWood Group. The finance was used for M&A, abandonment liabilities and corporate funding;and includes bonds, revolving credit and term-loan facilities.

Increased lending

Lending has become tighter across some parts of the industry, but Barclays Corporate isincreasing lending significantly. There remains a rigorous credit and business case regime with arobust due diligence process to navigate, although companies with good propositions and adiverse portfolio remain attractive targets to lenders.

Trends suggest well-managed companies recognise this, which is particularly relevant as themarket heads towards 2012 and a potential wall of credit. At the height of the booming market in2007, most companies took advantage of typically five-year debt and favourable pricing. Manyof these deals will need refinancing next year; coinciding with tighter bank regulations andimproving economic conditions.

The economic outlook for the oil and gas industry is generally improved: more available financewill bring increased financial activity. Geopolitical uncertainty, new regulation and tax changes,create specific challenges, but firms with flexibility in their business models will succeed. Thoseunable to adapt may well find the year ahead difficult.

~~~~~~~~

By Walter Cumming
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Title:Galp seeking finance for Brazil upstream. Petroleum Economist, 0306395X, Apr2011,Vol. 78, Issue 3


HTML Full Text

Galp seeking finance for Brazil upstream

Portugal's Galp Energia is looking to raise about 2bn ($2.8bn) through a capital increase at itsBrazilian subsidiary to finance several offshore oil projects. Galp's Brazilian operations comprisea total of 36 blocks spread over seven basins, including the huge Lula field. Analysts say that bydivesting a minority stake in its Brazilian subsidiary, Galp will retain operational control of itskey assets in the region and inject cash into its debt-laden balance sheet.


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Title:IFC to Invest $30Mn in Punj Lloyd Upstream. EmergingMarketsNOW, 10/10/2008


IFC to Invest $30Mn in Punj Lloyd Upstream

Section:Emerging Market News

International Finance Corporation (IFC), the PE arm of the World Bank, will invest USD 30million in Punj Lloyd Upstream, an India-based E&P drilling company. The investment, whichwill be made through a combination of debt and equity, will assist Punj Lloyd to offer drillingservices across the Middle East, North Africa, and South Asia. The move is in line with IFC'splan of enhancing presence in the Indian oil and gas industry along with helping companies indeveloping countries to expand operations across other developing markets. Punj Lloyd

Upstream is a subsidiary of Punj Lloyd, a leading Indian engineering and construction company.The company offers services in the energy and infrastructure sectors across the Middle East,Africa, the Caspian, Asia Pacific, and South Asia. Established in 1956, IFC provides privatesector investment, capital for international financial markets, and advisory services to businessesand governments. The company consists of 179 member countries, and employs 3,100professionals.


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Upstream Mergers, Downstream Competition, and R&D Investments.Authors:

Milliou, Chrysovalantou1Pavlou, Apostolis2

Source:

Journal of Economics & Management Strategy. Winter2013, Vol. 22 Issue 4, p787-809.23p.Document Type:

ArticleSubject Terms:

*RESEARCH & development*FINANCE*CONSOLIDATION & merger of corporations*INVESTMENTS*CONTRACTS*BUSINESS planning

*DECISION makingNAICS/Industry Codes:523930 Investment Advice523999 Miscellaneous Financial Investment Activities

Abstract:In this paper, we provide an explanation for why upstream firms merge, highlighting therole of R&D investments and their nature, as well as the role of downstream competition.We show that an upstream merger generates two distinct efficiency gains whendownstream competition is not too strong and R&D investments are sufficiently generic:The merger increases R&D investments and decreases wholesale prices. We also showthat upstream firms merge unless R&D investments are too specific and downstreamcompetition is neither too weak nor too strong. When the merger materializes, themerger-generated efficiencies pass on to consumers, and thus, consumers can be betteroff. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Economics & Management Strategy is the property of Wiley-

Blackwell and its content may not be copied or emailed to multiple sites or posted to a

listserv without the copyright holder's express written permission. However, users mayprint, download, or email articles for individual use. This abstract may be abridged. No

warranty is given about the accuracy of the copy. Users should refer to the original

published version of the material for the full abstract.(Copyright applies to allAbstracts.)

Author Affiliations:1Department of International and European Economic Studies, Athens University ofEconomics and Business2Department of Economics, Athens University of Economics and Business

ISSN:1058-6407

DOI:10.1111/jems.12034

dissertation lr title

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