Energy Project Finance: Oil, Gas & Power
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A four day financial training course on Oil & Gas Project Finance where you will learn how suitable financial structures for oil, gas and electricity projects are created.
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Course Instructor
The Course Director specialises in capital markets, risk management, and international project finance. She has considerable professional experience with the oil and gas, power, transport, and telecom sectors. She 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.
A 4-day training course covering:
- Energy Project Finance in Today's Challenging Markets.
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Structuring large oil and gas field development projects.
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Financing pipelines, oil rigs, platforms, and other infrastructure.
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LNG, fertilizer, refineries, petrochemical facilities.
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Power project finance.
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'Green' energy deals and carbon credits.
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Developing pro forma estimates and cashflow models.
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Working with banks and other debt providers.
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Understanding key legal risks and project structures.
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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:
- All 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.
- Accounting and Legal Practices.
- Project Consultancies.
- Export Credit Agencies.
Course Level
Today in Africa, 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, refineries, petrochemical facilities and thermal power deals.
By the programme'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 used 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.
- Development banks and specialised agencies.
- 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.
- 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 programs for energy transactions.
- Incentives in ECA programs: which are most popular today?
Upstream oil and gas: oil and gas exploration, development and production
- 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 3
Themes: alternative sources of finance and capital markets; 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.
- Bilaterals: U.S. OPIC, FMO, Proparco and others.
Accessing capital markets for projects pre-and postcompletion
- Capital markets and examples of projects.
- Selling Project Bonds.
- Mezzanine finance.
- Infrastructure investment funds.
- Rating agency criteria.
- Construction finance vs. operating projects.
- Greenfield vs. Brown field projects.
- Crude oil export receivables securitisation.
- Islamic Financing Alternatives.
- Examples: Ras Laffan - Qatar, Nigerian LNG - Trinidad, Petro-Rabigh - Saudi Arabia.
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. You will use an excel model to evaluate projected cashflows as part of the exercise.
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.
- AFRA classes (average freight weight assessment).
- 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.
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 usage.
Wrap-up and self-test
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The Course Director specialises in capital markets, risk management, and international project finance. She works with corporations, financial institutions, public agencies, law firms, and private equity investors. She has considerable professional experience with the oil and gas, power, transport, and telecom sectors.
She began her career at JP Morgan Chase Manhattan Bank, where she structured highly leveraged transactions and project financings and advised clients on foreign exchange and other price risk management strategies. She 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.
She 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.
From 2000 to 2007 she was a member of the Technical Advisory Panel (TAP) of the Public Private Infrastructure Advancement (PPIAF) managed by the World Bank. In 2006 and 2007 she was the TAP’s chairperson. The fund provides technical assistance to emerging market governments in order to encourage private involvement in infrastructure development. She received an M.B.A. from INSEAD, the European Institute of Business Administration, in Fontainebleau, France. 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.
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8-11 Oct 2013 (Nairobi, Kenya)
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2-4 Sep 2013 (Johannesburg, South Africa)
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5 Sep 2013 (Johannesburg, South Africa)
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6 Sep 2013 (Johannesburg, South Africa)
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9 Sep 2013 (Johannesburg, South Africa)
A 1-day on course Infrastructure Project Finance. Industry fundamentals will be covered, together with the key metrics and due diligence issues alongside numerous case studies. International best practices will be delivered comprehensively.
10 Sep 2013 (Johannesburg, South Africa)
A 1-day course on Mining Project Finance. Industry fundamentals will be covered, together with the key metrics and due diligence issues alongside numerous case studies. International best practices will be delivered comprehensively.
11 Sep 2013 (Johannesburg, South Africa)
A 1-day course on Project-Finance Risk and Recovery, examining projects that have gone wrong, including a review of the credit factors/reasons why these deals would go wrong - incorrect 'project concepts'.
12-13 Sep 2013 (Johannesburg, South Africa)
A 2-day course on Building Project-Finance Models, looking at the key financial ratios and credit analysis as well as the forecast basis for any cashflow projection. This course is designed as a 'Build-your-own-model-from-scratch' with the final model used in a course bidding contest.