Euromoney Audit Training

On this 5-day training course, participants will learn about:

• 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
  

Supported By:

Day 1

Themes: Energy markets; varying approaches to financing different types of energy projects; qualitative and quantitative analysis; cash flow modeling.

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 heet 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

· Specialized 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 modeling 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

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 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

· 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 3

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 programs

– World Bank Group: World Bank, IFC, MIGA,ICSID
– Other multilaterals: Africa development bank, Islamic development, Inter-American development bank etc.

– Bilaterals: US 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 securitization

· Examples: Ras Laffan Qatar, Nigerian LNG, Trinidad

OIL AND GAS TR-ANSPORTATION/ 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.

4Day

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

– 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

Conclusion and self-test

Day 5

Themes: LNG project modeling 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 modeling as well as Excel, ‘dos’ and ‘dont’s’. Further practical uses for models in negotiations are described.”

MODELING WORKSHOP OVERVIEW: OBJECTIVES AND APPROACHES

· Constructing a model/common myths

· Variations by project type

STRUCTURING THE MODEL AND ORGANIZING 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 modeling output for initial project vetting

· Supporting on-going negotiations

Summary and conclusion of modeling workshop

• Margaret E. Osius

  Ms. Osius 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.
  
  Ms. Osius 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. 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.
  
  From 2000 to 2007 Ms. Osius 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. Ms. Osius 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

  • International Project finance & Cash flow Modeling - New York City
  • Renewable Energy Project Finance - New York City

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.

Renewable Energy Project Finance - New York City

15-17 Oct 2012 (New York, United States)

This program will discuss approaches to financing wind, biomass /biofuel, solar and other renewable projects in many parts of the world, focusing on how these transactions differ from more conventional thermal-based deals.

International Project finance & Cash flow Modeling - New York City

11-15 Jun 2012 (New York, United States)
12-16 Nov 2012 (New York, United States)

This program is designed to help participants break the project analysis process into its component parts. While differentiating between countries and industrial sectors, sessions introduce techniques for assembling market information and making qualitative judgments, as well tools for conducting thorough quantitative financial analysis.

Wealth Management & Private Banking Workshop - Miami

9-12 Jul 2012 (Miami, United States)

Private Equity Investments - New York City

5-7 Nov 2012 (New York, United States)

This three-day course has been designed to provide participants with an overview of the private equity industry and the investment process throughout the different stages of a company’s growth. It explains the investment process, objectives, financial instruments and negotiation options from the point of view of both the investor as well as the business owner.

Real Estate Modeling - New York City

10-12 Sep 2012 (New York, United States)

Real Estate Modeling is an intensive hands-on course that provides attendees with knowledge regarding both fundamental and challenging modeling issues in the real estate industry. Delegates will learn how to model mixed development projects, residential projects with multiple portfolios, cash flow waterfalls, and simulation of risk associated with different lease rolls. Sessions of the course will include effective presentation of model outputs and comprehensive scenario analysis. In addition, the program will enable delegates to develop their skills in a variety of modeling issues associated with setting-up inputs, working with flexible time periods and incorporating alternative financing structures.

Loan Syndication – Structuring, Selling Down & Documentation - Miami

22-24 Aug 2012 (Miami, United States)

With the financial world currently undergoing significant changes, one of the most important challenges in banking is to reinforce the syndicated loan function and to refresh techniques given the evolution of the syndicated loan market. This course enables you to ensure that your staff – whether bankers, lawyers or investment professionals – have the tools to cope with the new environment.

Trade Finance Structures for Commodity Supply Chains - Miami

24-27 Jul 2012 (Miami, United States)

Liquidity Risk Measurement and Management - New York City

26-28 Nov 2012 (New York, United States)

This course is designed to increase participants’ understanding of the increasingly complex and sophisticated process of liquidity risk measurement and management exploring both its issues and challenges. The 2007- 2009 crisis has only accelerated the spread of “new” best practices. National and international regulators, including FSA and CEBS are adding more complexity. All delegates will receive comprehensive course documentation for use before and during the program. This will enable you to return to your organization with an extensive and valuable source of information for future reference.”

Wealth Management & Private Banking Workshop - New York City

24-27 Sep 2012 (New York, United States)

The objective of this Workshop is to provide the assisting delegates with the necessary tools, techniques and criteria in order to further develop the skills competencies, and knowledge that are essential in managing client relationships, investment risk, and communicating portfolio management solutions

Project Finance Modeling Masterclass - New York City

1-3 Oct 2012 (New York, United States)

Project Modeling Masterclass is an intensive hands-on course in which participants receive comprehensive instruction on accounting, programming, engineering, statistical and economic aspects of project finance models. We believe that in a few days, participants can become proficient in project finance modeling and produce models that are consistent with top flight banks and investment banks