Introduction to Oil and Gas

• Structure of the oil and gas industry upstream /midstream/downstream
• Reserves and how hydrocarbons are formed
• Reserves estimation and modelling
• The oil and gas value chain
• Introduction to upstream financing (including upstream infrastructure), pipeline financing, LNG financing, refinery financing and petrochemical financing

What is Project Finance?

• Definition – The financing of long-term infrastructure, industrial projects and public services based upon a non-recourse or limited recourse financial structure where project debt and equity used to finance the project are paid back from the cashflow generated by the project
• Origins of project finance
• Why project finance is used
• Market review – sectors, geography and trends
• Defaults and loss given defaults
• Project finance vs. corporate finance – pros and cons

Upstream Oil and Gas Financing

• From Titusville to shale gas – the history of the oil and gas industry
• Exploration and production
• Single Field Financing
• The Borrowing Base Facility

Qualitative Risk Analysis and Mitigation

• Sponsor Risk
• Construction completion and technology risk and liquidated damages
• Input risk (raw materials supply / reserves etc.)
• Output risk (merchant / contracted / demand / offtake etc.)
• Security
• Operation and maintenance
• Country risk and regulation
• Environmental risk
• Insurance and force majeure provisions

Quantitative Risk Analysis

• Building the cashflow model
• Key inputs
• Establishing the debt capacity of a project
• Key measurement tools (ADSCR, LLCR and PLCR etc.)
• The Repayment Schedule (straight line, sculpted and annuity profiles)
• Sensitivity analysis • Key financing risks (interest, inflation and foreign exchange) • Interest rate and exchange rate hedging

Floating Production Storage and Offloading Units (FPSOs)

• What is an FPSO?
• Construction and operation
• Bareboat Charter Agreements
• Quiet enjoyment
• The future for FPSOs

Liquefied Natural Gas (LNG)

• What is LNG?
• History of the LNG Industry
• The LNG “chain”
• LNG supply and demand drivers
• The changing LNG market – the trend to shorter contracts
• Quiet enjoyment

Refining

• The refining process
• Refining capacity
• Crude characteristics
• The Nelson Index
• Refining margins

The Project Finance Process

• Key participants
• The role of advisors
• Financial advisors
• Technical advisors
• Insurance advisors
• Legal counsel
• The financing feasibility study
• Debt structuring
• Arranging, underwriting and syndication
• Ongoing monitoring

Project Financing Documentation

• The term sheet
• Key provisions
  
  • purpose
  • fees and margins
  • repayment
  • representations and warranties
  • covenants and undertakings
  • conditions precedent
  • security
  • cashflow waterfall
  • events of default

Environmental and Social Awareness

• The equator principles – origins and purpose
• Recent developments
• Banks “obligations”
• Project classification under the equator principles
• Environment and social impact awareness