Course dates
By attending this highly interactive and practical 5-day training school you will:
- Gain a better understanding of oil and gas markets and how oil and gas projects are financed.
- Gain a better understanding of the current trends in energy project finance.
- Review the technical evaluations of upstream and downstream projects.
- Understand how the technical issues of energy projects are translated into financial and credit risks.
- Understand the finer aspects of financial modelling by identifying and quantifying the major risks that impact a project’s cash flow generation capabilities.
- Gain a better understanding of credit structuring techniques, so as to effectively mitigate the credit risks of an energy project.
- Review the finer aspects of legal documentation, with legal documentation techniques and tips to help you properly reflect a credit structure in the legal contract.
Featuring 3–individually bookable modules:
- Upstream development & production
- Mid-stream pipelines & LNG projects
- Downstream oil refineries & petrochemical plants
- Including: 16 key industry case studies to improve your understanding
Course Background & Methodology
The course will enable participants with skills to identify and analyse prospective borrowers, structure credit facilities, and prepare credit applications for formal presentation and approval by bank credit committees. These skills can be used by the origination teams and credit teams of lenders and to support organisations which run or sponsor projects.
Each section will be covered briefly as a module in a traditional class style, and the real learning experience will be found in the exercises within each module. Suggested solutions to each exercise will be provided and discussed. Supporting materials will be available for further in-depth learning.
Module 1: Upstream Development & Production
Day 1
Overview of the Oil and Gas Sector; the lending markets; recent developments in lending; overview of the credit process; identifying and mitigating credit risks
Overview of the oil and gas sector
- Brief history of the modern petroleum industry
- Oil: 20th century superpower
- World oil and gas reserves and consumption
- The evolution of Fiscal Terms (e.g. PSC’s, concessions, service agreements etc.) and the emerging dominance of the National Oil Company
The bank lending markets
- Understanding the origins of the established oil & gas lenders and opportunities for new lenders
- Common types of lending: reserve based lending, mezzanine debt, bonds
- Credit risk vs. equity risk
- How debt is used to manage cash flow
- Recent developments in lending
Case study 1: Each team will review an upstream oil and gas company, identify its financing needs and propose an appropriate
financing solution.
Overview of the credit process
- Initial deal review
- Proposal
- Due diligence
- Credit approval
- Term sheet
- Legal documentation
- Deal closing
- Deal monitoring
Case study 2: Each team will prepare an initial deal review of an independent oil & gas company. Findings and recommendations will be presented to the mock credit committee.
Converting Technical Risks into Credit Risks
- What can the financial analyst do before calling a Technical Engineer?
- Reviewing the reserve report
- Assessing the development plan
- Credit risk mitigation strategies
Case Study 3: Each team will review the technical report for an oil field development, identify technical risks and propose credit risk mitigation strategies.
Identifying and Mitigating Risks
- Management and operating & capital strategies
- Development risk, including government approvals
- Reserve risk
- Commodity price risk
- Environmental Risk
- Insurance risk
- Lender’s ability to perfect security over borrowing base assets
- Corporate structure of borrower
Case Study 4: Each team to undertake a credit analysis and prepare a credit application for an oil and gas company, which will be presented to the mock credit committee.
Day 2
Financial Modelling in excel; Credit structuring including covenants and pricing; legally documenting the transaction; High Leverage Situations; Mezzanine debt product; Overview of Downstream O&G project financing and the importance of upstream knowledge
Modelling in Excel
- Creating an upstream oil & gas projection model
- Earnings vs. cash flow
- Debt amortisation schedule
- Assumptions
- Using derivative products to hedge price risk and enhance debt capacity
- Ratio analysis
Credit structuring
- Security over borrowing base assets and non-borrowing base assets
- Covenants, including cover ratios
- Lending to an operating company vs. special purpose vehicles (SPVs)
Country risk credit considerations
- Assessing the legal environment and political risks, plus risk mitigation strategies
- Syndication strategies in the current credit climate
Case study 5: Selecting a country/region-mitigating country risk and lender’s ability to perfect security over collateral; syndication considerations. Each team will present a credit analysis that will address country risk/political risk and outline a syndication strategy.
Legally documenting the transaction
- Overview of a legal contract
- Perfecting security
- Subordination and inter-creditor agreements
- Project/field agreements
- Identifying credit risks and risk mitigation
Case Study 6: Each team will review excerpts of a draft credit agreement and identity any credit documentation issues and propose risk mitigation strategies.
High leverage situations
- Credit risks: exploration vs. development vs. production
- Senior debt vs. mezzanine debt vs. bonds
- “Stretch” tranches
- Lender issues and risk mitigation
Mezzanine debt product
- Increasing debt capacity: oil price deck; reserve profile; cover ratios; reserve tail requirement
- Pricing
- Warrants
- Syndication considerations
Case Study 7: Each team will review the economics of an oil development project and determine the debt capacity. An appropriate finance package will be recommended by each team.
Overview of Oil & Gas Finance: Downstream Project Finance
- Why upstream knowledge is needed to better understand downstream project finance
- Financing oil refineries
- Financing LNG projects
Summary and Close for the Upstream O&G Finance Section
Module 2: Mid-stream Pipelines & LNG projects
Day 3
Overview of global midstream energy markets; overview of the global LNG market and its impact on regional gas markets; Technical Review for a mid-stream project; LNG project: financial modelling in Excel
Overview of global midstream energy markets
- Overview of the business development and credit process - why does country risk matter?
- Global and regional oil and gas production
- Geo-political influence on midstream energy projects, how can this mitigate credit risk?
- Major global oil and gas production projects in development
- Locations of global refining capacity
- Transportation the “lynchpin” in the oil & gas value chain
Overview of the global LNG market
- World/Regional gas consumption
- World/Regional gas production
- Transportation of Gas - how LNG globalised a local commodity
- Growth in LNG investment and the collapse of gas prices – future concerns and opportunities
- Review of LNG projects in development and proposed projects
Credit analysis: LNG project finance
- Quantitative risks and mitigation strategies
- Qualitative risks and mitigation strategies
Case study 8: Credit structuring. Each team will analyse a transaction and develop an appropriate credit structure to mitigate credit risks. Expert feedback will be received.
Technical review for a midstream project
- Why is the technical analysis so important in assessing mid-stream oil and gas projects?
- Reviewing the reserve report of the oil or gas fields that will supply the pipeline or LNG project
- Identifying credit risks and mitigation strategies
Case study 9: Qatar Gas II – Whose risk is it anyway? Each team to undertake a credit analysis of the Qatar Gas II project, with expert feedback provided on candidate responses.
LNG project finance: financial modelling in Excel
- Creating financial models for LNG financing
- Earnings vs. cash flow
- Debt amortisation schedule
- Assumptions
- Ratio analysis
Case study 10: Each team will develop a financial model for a LNG financing and assess the strengths and weaknesses of the project. Each team will present their findings and propose whether to proceed or decline the transaction. Expert feedback will be provided.
Summary and Close
Module 3: Downstream Oil Refineries & Petrochemical Plants
Day 4
Overview of the downstream sector; the bank lending markets, including project finance and working capital facilities; Overview of a downstream oil and gas project financing, including a review of recent trends.
Overview of the downstream sector
- Oil and gas demand fundamentals: who buys the oil and gas?
- Review of regional demand for oil and gas
- Global concentrations of oil refineries and petrochemical production
- The economic cycle and the boom, bust nature of the downstream sector; the trend is the lender’s friend
- Overview of the working capital and capital expenditure requirements of a refinery and a petrochemical producer: how is debt used to manage cash flow?
Case study 11: Team exercise in identifying the working capital and capital expenditure financing needs of a petrochemical producer. Expert feed back provided.
The bank lending markets
- Project finance vs. balance sheet lending
- Working capital facilities and asset based lending
- Credit risk vs. equity risk
- Recent developments in lending
Country risk credit considerations
- Assessing the legal environment and political risks, plus risk mitigation strategies
- Syndication strategies in the current credit climate
Case study 12: Selecting a country/region: mitigating country risk and lender’s ability to perfect security over collateral; syndication considerations. Each team will present a credit analysis that will address country risk/political risk and outline a syndication strategy. Expert feedback provided.
Overview of a downstream oil and gas project financing
- Typical project finance structures
- When is a project finance structure the preferred choice?
- Understanding the objectives of parties involved in the project financing:
- Sponsor / Borrower
- EPC contractors
- Government agencies
- Lender
- Institutional investors
- Review of recent down-stream oil and gas project financings
- Credit risk mitigation strategies in project financing
Day 5
Overview of the credit process; technical reviews: identifying credit risks and risk mitigation strategies; credit analysis, including qualitative factors; financial modelling, including developing assumptions and stress testing.
Legally documenting the credit facility; the finer aspects of legal documentation and ensuring the bank approved term sheet is reflected in the legal contract
Overview of the credit process
- Initial deal review
- Drafting a proposal
- Due diligence
- Credit application
- Credit approval
- Term Sheet
- Legal documentation
- Deal closing
- Deal monitoring
Case study 13: Each team to undertake a credit analysis and prepare a credit application for a working capital facility for a petrochemical producer, which will be presented to the simulated credit committee. Expert feedback will be received.
Technical reviews: identifying credit risks and mitigation strategies; credit analysis
- Why is the technical analysis so important in assessing downstream oil and gas projects?
- Identifying credit risks and risk mitigation strategies
Credit analysis
- Coverage ratio calculations
- Reserve accounts
- Qualitative credit risk factors
Financial modelling; assumptions, including stress testing assumptions
- Creating a financial model for a working capital financing
- Earnings vs. cash flow
- Debt amortisation schedule
- Assumptions, including stress testing assumptions
- Ratio analysis
Case study 14: Each team will develop a financial model for a working capital financing and assess the strengths and weaknesses of the project. Each team will present findings and propose whether to proceed or decline the transaction. Expert feedback will be provided.
Legally documenting the transaction
- Overview of a legal contract
- Legal jurisdiction
- Perfecting security
- Subordination and inter-creditor agreements
- Project/field agreements
- Risk mitigation
Legally documenting the credit facility
- Overview of a legal contract
- Legal jurisdiction
- Perfecting senior security positions over assets; fixed and floating charges
- Subordination and inter-creditor agreements
- Project agreements
- Typical credit documentation issues and risk mitigation strategies.
Case study 15: Each team will review excerpts of a draft credit agreement and identify any credit documentation issues and propose risk mitigation strategies. Expert feedback will be provided.
The finer aspects of legally documenting the credit facility: ensuring the bank approved term sheet is reflected in the legal contract
- Covenants, including cover ratios
- Post-closing credit facility monitoring considerations
- Lending to an operating company vs. SPV
- Syndication considerations
Case study 16: Each team will review excerpts of a draft credit agreement and compare it with the bank approved facility term sheet. Any differences between the draft credit agreement and the term sheet will be identified and solutions proposed. Expert feedback will be provided.
Summary and Close
Central London Hotel (energy), London, UK
All Euromoney Energy Training courses are held at four or five star venues in Central London, Zone 1. We strive to provide you with a training environment of the highest quality, to ensure that the whole learning experience exceeds your expectations.
Your training venue will be confirmed by one of our course administrators approximately 3-4 weeks before the course start date.
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John Aggelakos
John Aggelakos has over 20 years banking experience in the oil and gas sector. John has an Honours BA degree from University of Toronto. John qualified as a Chartered Accountant at KPMG in Canada and Ireland before moving into Banking, where he has held key positions at BMO Nesbitt Burns, GMAC Commercial Finance, West LB and Bank of Scotland.
John’s assignments have included providing finance or acting as financial advisor to: ExxonMobil in Nigeria, Essar Global, and Qatar Gas II and Qatar Gas IV LNG projects. John now works as an independent consultant and advises banks and industry on energy issues.
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.
19-22 Jun 2012 (London, UK)
4-7 Dec 2012 (London, UK)
This Euromoney Energy Training course examines markets, pricing and products to provide you with a thorough overview of the sector. The course will explore mechanisms and tools for both physical and financial oil trading allowing unparalleled access to the world of trading, its role within the oil industry and its importance in the success of oil companies. You will leave this course with a thorough understanding of the workings of crude oil markets and the range of contracts, tools and techniques available to traders.
26-28 Nov 2012 (London, UK)
This Euromoney Energy Training course examines the roles of benchmarking and performance monitoring through key performance indicators and the analysis of business models.
25-27 Jun 2012 (London, UK)
17-19 Dec 2012 (London, UK)
This Petroleum Company Performance Management training course has been designed to offer personnel from corporations and financial institutions a full complement of tools to use most effectively in developing and analysing the corporate performance measures for oil and gas companies.
24-27 Sep 2012 (London, UK)
15-18 Apr 2013 (London, UK)
The Commercial and Trading Aspects of Oil Refining course will provide you with in-depth knowledge of the refining business and an understanding of how trading/hedging can improve margins and reduce risk. Discover how to optimise refinery margins and manage the profitability of commercial refining.
20-24 Aug 2012 (London, UK)
This Euromoney Energy Training course provides a comprehensive overview of the oil and gas industry from upstream exploration and production to downstream refining, sales and marketing. You will gain an appreciation of industry dynamics and the key issues affecting its development and future. This course will provide a thorough foundation for understanding the changing industry dynamics.
8-10 May 2013 (London, UK)
This course will investigate the mechanisms for trading physical oil, freight, shipping and derivatives to optimise margins and achieve profit targets. The interdependence between oil markets and ship chartering will be extensively explored, revealing links to the derivative markets and the use of trading tools.
17-19 Oct 2012 (London, UK)
13-15 Feb 2013 (London, UK)
This Euromoney Energy Training course provides a comprehensive overview of the oil and gas industry from upstream exploration and production to downstream refining, sales and marketing. Under the guidance of our expert course faculty, participants will gain an appreciation of industry dynamics and the key issues affecting its development and future.
10-12 Jul 2012 (London, UK)
This 3-day Euromoney Energy Training course will give you an in-depth understanding of the problems and solutions in unit formation, negotiation of participation factors and operating agreements. The role of governmental agencies in consent and oversight will also be discussed.
8-10 May 2013 (London, UK)
This course will investigate the mechanisms for trading physical oil, freight, shipping and derivatives to optimise margins and achieve profit targets. The interdependence between oil markets and ship chartering will be extensively explored, revealing links to the derivative markets and the use of trading tools.
12-15 Jun 2012 (London, UK)
11-14 Dec 2012 (London, UK)
This practical Euromoney Energy Training course will enable delegates from all technical and commercial disciplines to understand the theories and methods used to value oil and gas prospects. The four-days will reveal the fundamental aspects of upstream petroleum economics and risk analysis. Through computer-based exercises, participants will construct economic models, incorporating relevant cash flow data for case study projects and scenarios.
10-12 Oct 2012 (Singapore, Singapore)
This course explores the structure and mechanisms of production sharing contracts (PSC's) for upstream oil and gas projects. Studying the underlying processes and commercial drivers, participants will examine case studies to illustrate the economic structure of these complex agreements.
17-20 Dec 2012 (Dubai, United Arab Emirates)
This 4 day International Oil & Gas Contracts course is specifically designed for professionals involved internationally in the oil and gas industry, it offers a unique opportunity to rapidly increase your understanding of the legal issues involved in various UK and international scenarios and to improve your techniques and skills in drafting a variety of international contracts.
3-5 Dec 2012 (London, United Kingdom)
Euromoney Energy Trainings Petroleum Sales Contracts course is designed to give attendees a comprehensive understanding of crude oil, natural gas and refined products markets and the sales contracts that are utilised for transactions through the supply chain.
29-31 Oct 2012 (London, UK)
This course is designed for professionals who need to develop an understanding of the unique aspects of the energy industry, including the oil and gas commercialisation and business development or facilities evaluation and commercialisation.
The course will focus on the skills required in evaluation (both buyside and sell-side), financing, acquisition, and exploitation planning for an oil and gas entity, a midstream facility or electrical generation plant.
11-13 Sep 2012 (London, UK)
This course explores the structure and mechanisms of production sharing contracts (PSC’s) for upstream oil and gas projects. Studying the underlying processes and commercial drivers, participants will examine case studies to illustrate the economic structure of these complex agreements.
22-24 Oct 2012 (London, UK)
This 3 day Upstream Oil and Gas Acquisition and Divestment course will explain how upstream oil and gas assets are traded from both buyer and seller perspectives.
The course includes references to failed and successful deals and provides valuable insight into how to conclude successful transactions.
The principles of Licensing Rounds, Farm In and Farm Out processes are explored as well as key industry processes underpinning these transactions. It includes assessment of case studies, and an element of group work based on an “acquisition and divestment opportunity” where buyers and sellers meet to consider an opportunity and to “close a deal”.
12-15 Nov 2012 (Singapore, Singapore)
The Energy Risk Management: Mastering Volatile and Complex Markets course is a comprehensive and systematic introduction to risk management for complex energy markets. The course will detail why and how risks in energy – particularly gas and electricity - are more acute than in other traded market sectors, and how classic risk management techniques must be adapted and extended to meet these demanding conditions.
1-5 Oct 2012 (Singapore, Singapore)
This 5-day course is a comprehensive review of the key features of upstream management ranging from exploration and development through to production and transportation. The course will benefit attendees who wish to broaden and deepen their upstream management skills
16-19 Jul 2012 (London, UK)
People coming to energy risk management for the first time are taken aback by the extreme market conditions that are commonplace in the complex markets of oil, coal, and above all, gas and electricity. Levels of volatility and basis risk are unprecedented: and there are additional risks that are unique to energy. This course shows delegates how to deploy traditional risk management tools in the challenging context of volatile energy markets, and to extend these techniques to master the unique risk characteristics of gas and electricity.
19-21 Sep 2012 (London, UK)
This 3 day course concentrates on a review and analysis of energy trends over the next 20 years. While predicting future energy trends can be fraught with uncertainties, attention is given to reviewing and analysing a variety of key market drivers, applying sensitivities and discussing probable outcomes.
11-15 Jun 2012 (Singapore, Singapore)
A 5-day course designed to provide participants with in-depth knowledge of oil products, oil trading, market participants and fundamentals such as pricing.
17-19 Sep 2012 (London, UK)
21-23 Nov 2012 (Lagos, Nigeria)
Attend this practical and interactive three-day training course and enhance your knowledge in the following key areas: The fundamental economic principles underpinning production sharing contracts (PSC’s); The history and evolution of production sharing contracts (PSC’s); The PSC structure, content and flowchart; Cost recovery, profile share, bonuses, sliding scales; Royalty and Taxation; Ringfencing; Key economic issues in PSC negotiations and bidding, featuring: Nigeria PSC economic modelling workshop, The economic impact of the Petroleum Industry Bill (PIB) and Global case studies
19-21 Nov 2012 (Singapore, Singapore)
11-14 Jun 2012 (London, UK)
For operator drilling contractor and service company personnel that desire a specialised familiarisation, understanding and comprehension of Deepwater Drilling Operations, equipment, processes, systems and activities.
25-29 Jun 2012 (London, UK)
This 5-day course is a comprehensive review of the key features of upstream management ranging from exploration and development through to production and transportation. The course will benefit attendees who wish to broaden and deepen their upstream management skills.
16-19 Jul 2012 (London, UK)
4 days of course modules that focus on the review and examination of the key elements of the supply chain from upstream activities of exploration, development and production through transportation to downstream sector that involves trading, refining, petrochemicals and final distribution to the consuming markets.
28-30 May 2012 (London, UK)
This Fundamentals of Crude Oil Valuation & Pricing course covers everything you need to know about how oil is traded and priced in the international market. The course covers the valuation and pricing of physical cargoes of crude oil, as well as how derivatives such as oil futures and swaps are structured.
18-20 Jul 2012 (New York, United States)
This course will give you an in-depth introduction to petroleum refining technology and economics. The focus is on transportation fuels refineries, however, petrochemical production and biofuels are also discussed. The first part of the program includes an
overview of crude oil supply and petroleum product demand. This is followed with a description of refinery process technology. Key refining technologies are described such as crude oil distillation, heavy oil conversion options, hydrotreating, and catalytic reforming.
5-8 Nov 2012 (Hong Kong, Hong Kong)
4 days of course modules that focus on the review and examination of the key elements of the supply chain from upstream activities of exploration, development and production through transportation to downstream sector that involves trading, refining, petrochemicals and final distribution to the consuming markets.
20-22 Aug 2012 (Hong Kong, Hong Kong)
This course is designed for professionals who need to develop an understanding of the unique aspects of the energy industry, including the oil and gas commercialisation and business development or facilities evaluation and commercialisation.
The course will focus on the skills required in evaluation (both buyside and sell-side), financing, acquisition, and exploitation planning for an oil and gas entity, a midstream facility or electrical generation plant.
25-27 Sep 2012 (Singapore, Singapore)
This Fundamentals of Crude Oil Valuation & Pricing course covers everything you need to know about how oil is traded and priced in the international market. The course covers the valuation and pricing of physical cargoes of crude oil, as well as how derivatives such as oil futures and swaps are structured.
8-10 Oct 2012 (Singapore, Singapore)
This Euromoney Energy Training course examines the roles of benchmarking and performance monitoring through key performance indicators and the analysis of business models.
20-22 Aug 2012 (London, UK)
24-27 Sep 2012 (London, UK)
22-31 Oct 2012 (Hong Kong, Hong Kong)
20-23 Nov 2012 (Singapore, Singapore)
For operator drilling contractor and service company personnel that desire a specialised familiarisation, understanding and comprehension of Deepwater Drilling Operations, equipment, processes, systems and activities.
12-14 Nov 2012 (Hong Kong, Hong Kong)
This 3 day course concentrates on a review and analysis of energy trends over the next 20 years. While predicting future energy trends can be fraught with uncertainties, attention is given to reviewing and analysing a variety of key market drivers, applying sensitivities and discussing probable outcomes.
12-15 Nov 2012 (Singapore, Singapore)
14-16 Nov 2012 (Almaty, Kazakhstan)
This course explores the structure and mechanisms of production sharing contracts (PSC’s) and the economic principles that underpin them. Studying the underlying processes and commercial drivers, participants will examine case studies to illustrate the economic structure of these complex agreements.
17-27 Sep 2012 (London, UK)
An 8-day comprehensive, intense and practical programme covering the financial structures used today to finance energy projects worldwide at each stage along the energy supply chain.
17-21 Sep 2012 (London, UK)
This 5-day course is designed to introduce both lawyers and nonlawyers alike to the theories and practice of international commercial and investment arbitration in the oil & gas industry.
Course dates