Project Finance for the International Petroleum Industry - 1st Edition - ISBN: 9780128001585, 9780128005293

Project Finance for the International Petroleum Industry

1st Edition

Authors: Robert Clews
eBook ISBN: 9780128005293
Hardcover ISBN: 9780128001585
Imprint: Academic Press
Published Date: 4th April 2016
Page Count: 416
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Description

This overview of project finance for the oil and gas industry covers financial markets, sources and providers of finance, financial structures, and capital raising processes. About US$300 billion of project finance debt is raised annually across several capital intensive sectors—including oil and gas, energy, infrastructure, and mining—and the oil and gas industry represents around 30% of the global project finance market.

With over 25 year’s project finance experience in international banking and industry, author Robert Clews explores project finance techniques and their effectiveness in the petroleum industry. He highlights the petroleum industry players, risks, economics, and commercial/legal arrangements. With petroleum industry projects representing amongst the largest industrial activities in the world, this book ties together concepts and tools through real examples and aims to ensure that project finance will continue to play a central role in bringing together investors and lenders to finance these ventures.

Key Features

  • Combines the theory and practice of raising long-term funding for capital intensive projects with insights about the appeal of project finance to the international oil and gas industry
  • Includes case studies and examples covering projects in the Arctic, East Africa, Latin America, North America, and Australia
  • Emphasizes the full downstream value chain of the industry instead of limiting itself to upstream and pipeline project financing
  • Highlights petroleum industry players, risks, economics, and commercial and legal arrangements

Readership

Graduate students working in corporate finance and business, and professionals working in the project finance industry and the international oil and gas industry

Table of Contents

  • Introduction
  • Part I: Introduction to Project Finance
    • Introduction
      • Chapter 1: The Characteristics of Project Finance
        • Abstract
        • 1.1. Introduction
        • 1.2. Raising finance for large projects
        • 1.3. Using project finance to raise capital
        • 1.4. Risk analysis and risk mitigation
        • 1.5. Project economics, capital structure and debt capacity
        • 1.6. The Project finance process
      • Chapter 2: Project Finance Structures and Techniques
        • Abstract
        • 2.1. Introduction
        • 2.2. Project finance structures
        • 2.3. Project finance tools and techniques
        • 2.4. Security structures, sponsor support and other features
      • Chapter 3: Sources of Finance and the Global Project Finance Markets
        • Abstract
        • 3.1. Introduction
        • 3.2. Sources of equity
        • 3.3. Sources of project finance debt
        • 3.4. The Global project finance market
      • Chapter 4: Commercial Banks and Syndicated Lending
        • Abstract
        • 4.1. Introduction
        • 4.2. The Role of commercial banks in project finance
        • 4.3. Term loans and related financing
        • 4.4. Syndicated lending
        • 4.5. Loans market practice
    • Part II: The Petroleum Industry – Commercial Risks and Contracts
      • Introduction
        • Chapter 5: Fundamentals of the Petroleum Industry
          • Abstract
          • 5.1. Introduction
          • 5.2. The Business of petroleum
          • 5.3. The Industry value chain
          • 5.4. Industry structure, markets and economics
        • Chapter 6: Upstream Oil and Gas
          • Abstract
          • 6.1. Introduction
          • 6.2. Fundamentals of upstream oil and gas
          • 6.3. Upstream project risks
          • 6.4. Commercial structures and upstream contracts
        • Chapter 7: Petroleum Refining
          • Abstract
          • 7.1. Introduction
          • 7.2. The fundamentals of petroleum refining
          • 7.3. Refinery project risks
          • 7.4. Commercial structure and contracts
        • Chapter 8: Pipelines, Storage and Other Infrastructure
          • Abstract
          • 8.1. Introduction
          • 8.2. Fundamentals of pipelines and storage
          • 8.3. Pipelines, storage and infrastructure risks
          • 8.4. Commercial structures and contracts
          • 8.5. Oil and gas infrastructure tariffs and economics
        • Chapter 9: Petroleum Shipping and the Offshore Industry
          • Abstract
          • 9.1. Introduction
          • 9.2. Fundamentals of the shipping and offshore industries
          • 9.3. Shipping and offshore risks
          • 9.4. Commercial structures and contracts
          • 9.5. Shipping and offshore economics and finance
        • Chapter 10: Natural Gas and LNG
          • Abstract
          • 10.1. Introduction
          • 10.2. Fundamentals of the industry – the ‘natural gas chain’
          • 10.3. Risks in the natural gas industry
          • 10.4. Commercial structures and contracts
        • Chapter 11: The Petrochemicals Industry
          • Abstract
          • 11.1. Introduction
          • 11.2. Fundamentals of the petrochemicals industry
          • 11.3. Risks in the petrochemicals industry
          • 11.4. Commercial structures and contracts
        • Chapter 12: Project Development in the Petroleum Industry
          • Abstract
          • 12.1. Introduction
          • 12.2. Oil and gas project development
          • 12.3. The Project development process
          • 12.4. Contractors and contract terms
          • 12.5. Economics of project development
        • Chapter 13: Political and Environmental Risks, Tax and Insurance
          • Abstract
          • 13.1. Introduction
          • 13.2. Political and country risks
          • 13.3. Environmental risks
          • 13.4. Taxation and the petroleum industry
          • 13.5. Insurance
          • 13.6. Unforeseen events and force majeure
      • Part III: Project Finance Applied to the Petroleum Industry
        • Introduction
          • Chapter 14: The Role of Project Finance in the Petroleum Industry
            • Abstract
            • 14.1. Introduction
            • 14.2. Investment requirements of the petroleum industry
            • 14.3. Conventional sources of funding
            • 14.4. The role of project finance
            • 14.5. Hybrid finance structures for the petroleum industry
          • Chapter 15: Risk Analysis and Bankability for Oil and Gas Projects
            • Abstract
            • 15.1. Introduction
            • 15.2. Lender analysis of oil and gas project risks
            • 15.3. Sponsor risks in oil and gas project finance
            • 15.4. Lender approach to project risks
            • 15.5. Risk mitigation techniques and structures
          • Chapter 16: Project Economics and Cashflow Forecasting
            • Abstract
            • 16.1. Introduction
            • 16.2. The Role of cashflow forecasting and modelling
            • 16.3. Building the project forecasts
            • 16.4. Debt routines and model outputs
            • 16.5. Debt optimisation and the base case
            • 16.6. Sensitivity analysis and debt break-even
          • Chapter 17: Finance Structures and Terms
            • Abstract
            • 17.1. Introduction
            • 17.2. Overview of financial structuring
            • 17.3. Capital structure and the composition of debt
            • 17.4. Funding, repayment and maturity of debt
            • 17.5. Cost of funds
            • 17.6. Lender controls
            • 17.7. Sponsor support and other forms of credit enhancement
            • 17.8. Security
          • Chapter 18: Finance Structures for Upstream, Midstream and Downstream Projects
            • Abstract
            • 18.1. Introduction
            • 18.2. Upstream project finance structures
            • 18.3. Midstream project finance structures
            • 18.4. Downstream project finance structures
            • 18.5. Risk management and derivative contracts
          • Chapter 19: Oil and Gas Project Finance Documentation
            • Abstract
            • 19.1. Introduction
            • 19.2. Documenting the project finance transaction
            • 19.3. Lender commitments and term sheets
            • 19.4. Principal terms of the finance documents
            • 19.5. Project finance documentation processes
            • 19.6. Concluding remarks
        • Bibliography
        • Subject Index

        Details

        No. of pages:
        416
        Language:
        English
        Copyright:
        © Academic Press 2016
        Published:
        Imprint:
        Academic Press
        eBook ISBN:
        9780128005293
        Hardcover ISBN:
        9780128001585

        About the Author

        Robert Clews

        Mr. Clews is Head of Oil, Gas and Petrochemicals covering project finance in the EMEA for Sumitomo Mitsui Banking Corporation, one of Japan’s largest international commercial banks. His experience includes project investment appraisal, project finance advisory and arranging, joint venture and commercial contract negotiations and Export Credit Agency financing.

        Affiliations and Expertise

        Head of Oil, Gas, and Petrochemicals, Sumitomo Mitsui Banking Corporation

        Reviews

        "Robert Clews’ Project Finance for the International Petroleum Industry fills a significant gap in project-finance literature for both the academic and professional reader. Highly recommended. " --E.R. Yescombe, YCL Consulting Ltd., UK

        "The oil and gas industry is a capital intensive industry that carries very high risks in the upstream part of the value chain. The many companies involved in the upstream sector use a wide range of financial structures. Therefore, understanding how each company can finance its participation in projects and with what associated risks and costs is fundamental to the understanding of the issues at stake."  --Nadine Bret-Rouzaut, IFP School, France

        "Understanding different financial structures can be as important for the success of projects in the international petroleum industry as understanding physical structures and processes. This volume should help the interested reader make progress along the path towards such an understanding and to a greater awareness of many of the intricacies of project finance."  --David Mayston, University of York, UK

        "As experienced project finance professionals know, each sector has unique characteristics that must be take into account. Most books about energy finance emphasize financing at the expense of industry economics. In contrast, Robert Clews does a masterful job at tying together the features of oil and gas investments with the risk management and contract structures of energy project finance. During a time of dramatic changes in energy markets, this book sets the new standard for the analysis of structured finance during a period of dramatic change in energy markets."  --John S. Strong, College of William and Mary, USA