A 4-day intermediate training course covering:
-
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 cashflow 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
Who should attend
The course will be of value to professionals in the following areas:
Course Level
Today in the Gulf, as well as globally, project finance is uniquely challenging. Even the most carefully structured deals can face difficulties in attracting sufficient funding from international and local investors. More than ever, project developers, equipment suppliers, bankers and other creditors and investors must be properly equipped to analyze and explain the risks and prospects for a project's future performance.
Participants in this program will learn how to structure upstream and down stream oil and gas projects including field development, rigs, platforms, pipelines, and other transportation infrastructure. They will also see LNG, fertilizer transactions, and power deals. By the program's conclusion they will have developed a framework for recognizing and analyzing 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 use to assess project debt capacity, return on investment, 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. Many of these official players are today strenuously engaged in helping project developers and financiers weather recent market upheavals.
Day 1
Themes: energy markets; varying approaches to financing different types of projects; qualitative and quantitative analysis; cash flow modelling.
Introduction to energy finance: oil, gas and power project finance today
-
Structure of the oil and gas industry: upstream, midstream and downstream
-
Hydrocarbon basics: geology, reserves
-
Supply and consumption, OPEC, etc.
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 plants
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 proforma 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 2
Themes: legal issues to consider in accessing finance; bank markets; credit enhancement with ECAS; upstream oil and gas field development
Fertiliser case discussion
Legal issues in energy finance
Legal environment for energy deals
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?
-
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 programs for energy transactions
-
Incentives in ECA programs: which are most popular today?
-
Costs and availability
Upstream oil and gas: oil and gas exploration, development and production
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 3
Themes: alternative sources of finance and capital markets; energy price volatility management techniques; islamic finance and leasing; equipment finance
Oil field development case discussion
Sources of risk support: development banks (IFIs)
-
Key IFIs and programs
-
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 post completion
-
Capital markets and examples of projects
-
Rating agency criteria
-
Construction finance vas. operating projects
-
Crude oil export receivables securitisation
-
Examples: Ras Laffan Qatar, Nigerian LNG, Trinidad
Islamic financing alternatives for energy projects
-
Structures: Istisna, Ijara, Sukuk
-
Examples: Petro-Rabigh Saudi Arabia, Others
Leasing equipment
Case study: rig finance. In small groups participants will assess a proposed bond issuance to refinance a semi-submersible rig conversion. Evaluating operating cashflows.
Day 4
Themes: transportation, storage and shipping; power markets power project financing; derivatives usage for energy price management
Rig finance case discussion
-
Oil and gas transportation and shipping
-
Logistics: pipelines, shipping, storage
-
Types of tankers
-
ULCC to tanker lightering
Introduction to power project financing
-
Constructing a power risk matrix
-
Understanding different types of thermal plants
-
Peakers vas. 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: gencos/transcos/discos
-
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
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 usageWrap-up and self-test
-
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.
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.
Comments
This course has now expired please email us to find out when the course will next be running.