Course dates
Course overview
Even the most carefully structured energy project finance deals can face difficulties in attracting sufficient funding from international and local investors. Project developers, equipment suppliers, bankers and other creditors and investors must be properly equipped to analyse and explain the risks and prospects for a project’s future performance.
Delegates in this 5-day training course will learn how to structure upstream and downstream oil and gas projects including field development, rigs, platforms, pipelines, and other transportation infrastructure. The course will also examine LNG, fertilizer transactions, and power deals. By the conclusion of the course delegates will have developed a framework for recognising and analysing qualitative and quantitative project risks when financing green field projects as well as facility upgrades in the energy sector. They will also understand how excel models are used to assess project debt capacity, return on investment (ROI), and other metrics common to attractive deals.
Numerous examples of projects from the region and around the world are employed throughout the course to ensure understanding and application of concepts. Lectures include many recent examples of structured financing attractive to banks, bond investors, lessors and Islamic investors. Applications of energy related derivative instruments to enhance financing are also described. Finally, careful attention is paid to fund providers and credit enhancers such as Export Credit Agencies and International Financial Institutions (IFIs) like IFC, Islamic Development Bank, European Investment Bank, and other Bi-laterals.
The fifth day session is a stand-alone cash flow modelling workshop. Using excel software, participants create a model for an LNG Plant to test for project debt capacity as well as return on investment.
Summary of course content
- Project finance in today’s challenging markets
- Structuring large oil and gas field development projects
- Financing pipelines, oil rigs, platforms, and other infrastructure
- LNG and fertilizer plants
- Power project finance
- ‘Green’ energy deals and carbon credits
- Developing pro-forma estimates and cash flow models
- Working with banks and other debt providers
- Understanding key legal risks in projects
- Official providers of funds and credit support (export credit agencies, development banks and others)
- Managing price volatility in energy deals
Methodology
Formal lecture sessions, innovative deals and numerous examples of projects in the oil and gas, power and water desalination sectors are drawn from around the world and discussed throughout the course. You will develop a framework for recognising, and analysing qualitative and quantitative project risks.
Who should attend this training course?
- Financiers involved in project finance, investment analysis and syndicated lending
- Government and parastatal executives involved in sponsoring/assessing project finance deals
- Institutional bankers
- Corporate bankers
- Commercial and investment bankers
- Project sponsors
- Development banks
- Contractors
- Accountants and lawyers
- Project consultancies
- Export credit agencies
Supporting publications
DAY ONE
Themes: Energy markets; varying approaches to financing different types of energy projects; qualitative and quantitative analysis; cash flow modelling.
Oil, gas and power project finance today
- The changing market for financing energy transactions:
- Special features of limited recourse projects
- Corporate balance sheet usage
- Electricity and BOO, BOT, BOOT, BLT, etc.
- Private sector providing public services
- Players and their roles
- Steps in a project financing
- Types of projects and their comparative complexity
Identifying and allocating risks Risk identification and allocation in oil gas and power project financing: different approaches/differing risks
- Financing structures: limited recourse vs. balance sheet deals
- Pipelines
- Field development and platforms
- Production facilities
- Refineries and petrochemical plants
- Power plant
Sources of finance: a financing checklist
- Domestic borrowing
- Loans from international banks
- International capital markets: eurobonds, private placements
- Export credit support for loans and bonds
- Specialised agencies: IFC and others
- Leasing
- Equity from project sponsors and others
- Derivatives usage
Building a risk matrix
- Risk allocation between sponsors, creditors and others
- Technology and construction/ completion
- Reservoir/reserves risks
- Feedstock risk
- Sales and off-take, operation and maintenance
- Abandonment/decommissioning
- Environmental/regulatory issues
- Country/political risk
Quantitative analysis: designing pro-forma energy project models
- Approaches to modelling for oil and gas transactions
- Debt providers: DSCR, loan life, and other key ratios
- Balancing equity and debt suitably in different types of projects
- Developing an appropriate base case/running sensitivities
- Perspective of the sponsor and measures of investor return
Case study: financing an ammonia plant
Participants break into small groups to evaluate this security package this gas processing plant.
A computer simulation quantifies risk assessments.
DAY TWO
Themes: Legal issues to consider in accessing finance; bank markets; credit enhancement with ECAs;
upstream oil and gas field development
Case discussion: fertilizer
Legal issues in energy finance
- Legal environment for energy deals
- Commercial points and legal points in various project structures
- Incorporated and unincorporated joint ventures
- Partnerships and Limited Partnerships
- Separate and common financing in natural resources projects
- Key contractual agreements and structuring considerations
Domestic and international bank finance
- Club loans and bank syndicates: primary and secondary distribution
- Pricing, flexibility, timing in the sector and today
- What security do banks want?
- Offshore accounts and trustees
- Mortgages on fixed assets / contract assignments
- Swap requirements and other derivatives usage: interest rate and currency
- Recent structures; case examples from Africa and the Middle East
Sources of risk support: Export Credit Agencies (ECAs)
- Official guarantees, insurance and funding programmes for energy transactions
- Incentives in ECA programmes
- Which are most popular today?
- Costs and availability
Upstream oil and gas: oil and gas exploration, development and production
- Structure of the oil and gas industry: upstream, midstream and downstream
- Hydrocarbon basics: geology, reserves
- Supply and consumption, OPEC, etc.
- Oil production: process depletion and enhanced recovery
- Major systems and types of drilling equipment
- Offshore oil platforms in shallow and deep water
Case study: financing a condensate field development
Participants break into small groups to evaluate the security package and forecasted cash flows for an upstream condensate field development project.
DAY THREE
Themes: Alternative sources of finance and capital markets; energy price volatility management techniques; leasing and equipment finance
Case discussion: oil field development
Sources of risk support: development banks (IFIs)
- Key IFIs and programmes
- World Bank Group: World Bank, IFC, MIGA, ICSID
- Other multilaterals: Africa development bank, Islamic development, Inter-American development bank etc.
- Bilaterals: U.S. OPIC, FMO, Proparco and others
Accessing capital markets for projects pre- and postcompletion
- Capital markets and examples of projects
- Rule 144A and Eurobond financing
- Mezzanine Finance
- Infrastructure investment funds
- Rating agency criteria
- Construction finance vs. operating projects
- Greenfield vs. Brown field projects
- Crude oil export receivables securitisation
- Examples: Ras Laffan Qatar, Nigerian LNG, Trinidad
Oil and gas transportation/ shipping
- Logistics: pipelines, shipping, storage
- Types of tankers
- Average Freight Weight
Assessment classes (AFRA)
- ULCC to tanker lightering
- Understanding charters; time and voyage
Refineries: simple and complex
- Refined production
- Simple or topping refineries; vacuum distillation
- Complex refineries
- World profile and current transactions in Asia
Leasing equipment
- Objectives and structures
- Costs and calculations
- Applications in energy project finance
Case study: rig finance
In small groups participants will assess a proposed bond issuance to refinance a semi-submersible rig conversion. Evaluating operating cash flows.
DAY FOUR
Themes: Islamic finance; derivatives usage for energy price management; power markets power project financing
Case discussion: rig finance
Islamic financing alternatives for energy projects
- Structures: Istisna, Ijara, Sukuk
- Examples: Petro-Rabigh Saudi Arabia, others
Managing oil price volatility with derivatives
- Oil and gas price markets and players
- Oil and natural gas swaps and options
- Costs, structures, indices, applications
- Recent examples of usage
Introduction to power project financing
- Constructing a power risk matrix
- Understanding different types of thermal plants
- Peakers vs. base-load facilities and power dispatch curves
- Combining water desalination and electricity production
- Rating agencies’ analytical model
Case study: financing a thermal power plant
Participants will break into small groups to evaluate the security package for this cogeneration plant. A computer simulation is used.
Market forces and effect on electrical supply
- Fragmentation of electricity generation
- Merchant power plants with uncontracted sales
- Tolling arrangements
- Renewable energy: financing wind, solar and bio-fuel plants
- Comparative costs and “grid parity”
- Government support schemes for renewable projects
- Understanding carbon markets
Conclusion and self-test
DAY FIVE
Themes: LNG project modelling workshop
Participants build a pro-forma cash flow model for a Liquified Natural Gas (LNG) facility. They assess a wide range of scenarios in order to test a limited recourse financing package, the project’s debt capacity, and its suitability for investment. Discussion of common approaches to modelling was well as Excel, ‘dos’ and ‘dont’s’. Further practical uses for models in negotiations are described.
Modelling workshop overview: objectives and approaches
- Constructing a model/common myths
- Variations by project type
Structuring the model and organising the data to create a cash flow statement
- Developing the assumptions page
- Construction costs and timing
- Operating cost, plant capacity usage, fixed and variable costs reinvestment, plant expansion,
productivity shifts Financing section
- Equity first or pro rata manually designed equity subscription
- Draw-down of debt linked to specific contracts or expenditures or in a hierarchy
- Funding the debt service reserve account
Developing profit and loss and balance sheet statements
- Factoring in reserves
- Considering currencies
- Tax calculations
Ratios and sensitivity analysis: objectives and limitations
- Measuring debt capacity and investor return
- Using modelling output for initial project vetting
- Supporting on-going negotiations
Summary and conclusion of modelling workshop
Hilton Hotel Singapore, Singapore, Singapore
This programme takes place on a non-residential basis at Hilton Hotel Singapore. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.
InterContinental Grand Stanford Hotel, Hong Kong, Hong Kong
This programme takes place on a non-residential basis at the InterContinental Grand Stanford Hotel. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.
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Meg Osius
Margaret Osius specializes in capital markets, and risk management, as well as international project finance. She works with corporations, financial institutions, public agencies, law firms, and private equity investors. Training and advisory work has covered approaches to financing infrastructure build-out and facilities acquisition, selecting among debt, equity, and hedging alternatives, and related topics. She has considerable professional experience with the oil and gas, power, transport, and telecom sectors.
Ms. Osius began her career at JP Morgan Chase Manhattan Bank, where, as a Vice President, she structured highly leveraged transactions and project financings and advised clients on foreign exchange and other price risk management strategies. Ms. Osius was responsible for a team of analysts responsible for evaluating the quality of the bank's global loan portfolio as well as that of its newly acquired affiliates. In that role she had extensive experience with workout and distressed debt.
Ms. Osius has published articles in the business press and co-authored several self-study guides covering international project finance, trade and export finance, foreign exchange, and financial futures. The World Bank has published her articles on approaches to financial analysis in emerging markets. She is a primary speaker in a series of video sessions created to cover the topic of Sound Banking Principles during executive training sessions in Moscow.
Until 2008 Ms. Osius was Chair of the Technical Advisory Panel (TAP) of the Public Private Infrastructure Advancement (PPIAF that provides technical assistance to emerging market governments. She is a member of the council on Foreign Relations and received an M.B.A. from INSEAD, the European Institute of Business Administration. Her B.A. degree is from Princeton University.
Courses run by this instructor
Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.
21-23 May 2012 (Hong Kong, Hong Kong)
'Project Finance Modelling' is designed to support middle and senior managers dealing with financial models from disparate sources, to enable them to be compared and analysed on a consistent and focussed basis.
5-7 Mar 2012 (Singapore, Singapore)
8-10 Oct 2012 (Hong Kong, Hong Kong)
Euromoney Training presents, 'Advanced Project Finance Workshop', intended for those who have an interest in the risk management / structuring aspects of Project Finance projects.
This is Module One of the 2nd Annual Asia Project Finance Academy.
Modules are bookable separately or you can attend the whole Academy saving US$6,850
8-9 Mar 2012 (Singapore, Singapore)
11-12 Oct 2012 (Hong Kong, Hong Kong)
Euromoney Training presents, 'Energy Project Finance' course, the 18 'Pillars' of a successful programme / project are discussed in detail. This is Module Two of the 2nd Annual Asia Project Finance Academy. Modules are bookable separately or you can attend the whole Academy saving US$6,850
9-11 May 2012 (Bangkok, Thailand)
18-20 Sep 2012 (Singapore, Singapore)
This course shows you the most effective approaches to financing renewable projects in many parts of the world, focusing on how these transactions differ from more conventional deals
12 Mar 2012 (Singapore, Singapore)
Euromoney Training presents, 'Infrastructure Project Finance', intended for those who have an interest in the project finance aspects of the different infrastruture sectors and the risks involved. This is Module 3 of the 2nd Annual Asia Project Finance Academy. Modules are bookable separately or you can attend the whole Academy saving US$6,850
13 Mar 2012 (Singapore, Singapore)
Euromoney Training presents, 'Mining Project Finance', intended for those who have an interest in the area of project financing in the Mining industry and identifying the opportunities and potential pitfalls with this commodity-based project finance area. This is Module Four of the 2nd Annual Asia Project Finance Academy. Modules are bookable separately or you can attend the whole Academy saving US$6,850
16 Mar 2012 (Singapore, Singapore)
Euromoney Training presents, 'Building Project Finance Models'. This is Module Six of the 2nd Annual Asia Project Finance Academy. Modules are bookable separately or you can attend the whole Academy saving US$6,850
5-16 Mar 2012 (Singapore, Singapore)
The Euromoney Training Asia-Pacific Project Finance Academy is a comprehensive 10-day academy that examines advanced techniques relevant to the current stressed global financial markets and enhances your ‘sector’ skills in three key areas.
Register before 5th February 2012 & receive the advertised 5% discounted price
14-15 Mar 2012 (Singapore, Singapore)
A 2-day workshop on the application of Project Finance to Public- Private Programmes (PPPs) with a special session on which PPP programmes work and which do not. This is Module Five of the 2nd Annual Asia Project Finance Academy. Modules are bookable separately or you can attend the whole Academy saving US$6,850
Course dates