This overview of project finance for the oil and gas industry covers financial markets, sources and providers of finance, financial structures, and capital raising processes. About US$300 billion of project finance debt is raised annually across several capital intensive sectors?including oil and gas, energy, infrastructure, and mining?and the oil and gas industry represents around 30% of the global project finance market.

With over 25 year’s project finance experience in international banking and industry, author Robert Clews explores project finance techniques and their effectiveness in the petroleum industry. He highlights the petroleum industry players, risks, economics, and commercial/legal arrangements. With petroleum industry projects representing amongst the largest industrial activities in the world, this book ties together concepts and tools through real examples and aims to ensure that project finance will continue to play a central role in bringing together investors and lenders to finance these ventures.

Reviews

"Robert Clews’ Project Finance for the International Petroleum Industry fills a significant gap in project-finance literature for both the academic and professional reader. Highly recommended. " --E.R. Yescombe,?YCL Consulting Ltd.,?UK

"The oil and gas industry is a capital intensive industry that carries very high risks in the upstream part of the value chain. The many companies involved in the upstream sector use a wide range of financial structures. Therefore, understanding how each company can finance its participation in projects and with what associated risks and costs is fundamental to the understanding of the issues at stake."? --Nadine Bret-Rouzaut, IFP School, France

"Understanding different financial structures can be as important for the success of projects in the international petroleum industry as understanding physical structures and processes. This volume should help the interested reader make progress along the path towards such an understanding and to a greater awareness of many of the intricacies of project finance."? --David Mayston, University of York, UK

"As experienced project finance professionals know, each sector has unique characteristics that must be take into account. Most books about energy finance emphasize financing at the expense of industry economics. In contrast, Robert Clews does a masterful job at tying together the features of oil and gas investments with the risk management and contract structures of energy project finance. During a time of dramatic changes in energy markets, this book sets the new standard for the analysis of structured finance during a period of dramatic change in energy markets."? --John S. Strong,?College of William and Mary, USA?

Feature

• Combines the theory and practice of raising long-term funding for capital intensive projects with insights about the appeal of project finance to the international oil and gas industry
• Includes case studies and examples covering projects in the Arctic, East Africa, Latin America, North America, and Australia
• Emphasizes the full downstream value chain of the industry instead of limiting itself to upstream and pipeline project financing
• Highlights petroleum industry players, risks, economics, and commercial and legal arrangements

Introduction Part I: Introduction to Project Finance Introduction Chapter 1: The Characteristics of Project Finance Abstract 1.1. Introduction 1.2. Raising finance for large projects 1.3. Using project finance to raise capital 1.4. Risk analysis and risk mitigation 1.5. Project economics, capital structure and debt capacity 1.6. The Project finance process Chapter 2: Project Finance Structures and Techniques Abstract 2.1. Introduction 2.2. Project finance structures 2.3. Project finance tools and techniques 2.4. Security structures, sponsor support and other features Chapter 3: Sources of Finance and the Global Project Finance Markets Abstract 3.1. Introduction 3.2. Sources of equity 3.3. Sources of project finance debt 3.4. The Global project finance market Chapter 4: Commercial Banks and Syndicated Lending Abstract 4.1. Introduction 4.2. The Role of commercial banks in project finance 4.3. Term loans and related financing 4.4. Syndicated lending 4.5. Loans market practice Part II: The Petroleum Industry – Commercial Risks and Contracts Introduction Chapter 5: Fundamentals of the Petroleum Industry Abstract 5.1. Introduction 5.2. The Business of petroleum 5.3. The Industry value chain 5.4. Industry structure, markets and economics Chapter 6: Upstream Oil and Gas Abstract 6.1. Introduction 6.2. Fundamentals of upstream oil and gas 6.3. Upstream project risks 6.4. Commercial structures and upstream contracts Chapter 7: Petroleum Refining Abstract 7.1. Introduction 7.2. The fundamentals of petroleum refining 7.3. Refinery project risks 7.4. Commercial structure and contracts Chapter 8: Pipelines, Storage and Other Infrastructure Abstract 8.1. Introduction 8.2. Fundamentals of pipelines and storage 8.3. Pipelines, storage and infrastructure risks 8.4. Commercial structures and contracts 8.5. Oil and gas infrastructure tariffs and economics Chapter 9: Petroleum Shipping and the Offshore Industry Abstract 9.1. Introduction 9.2. Fundamentals of the shipping and offshore industries 9.3. Shipping and offshore risks 9.4. Commercial structures and contracts 9.5. Shipping and offshore economics and finance Chapter 10: Natural Gas and LNG Abstract 10.1. Introduction 10.2. Fundamentals of the industry – the ‘natural gas chain’ 10.3. Risks in the natural gas industry 10.4. Commercial structures and contracts Chapter 11: The Petrochemicals Industry Abstract 11.1. Introduction 11.2. Fundamentals of the petrochemicals industry 11.3. Risks in the petrochemicals industry 11.4. Commercial structures and contracts Chapter 12: Project Development in the Petroleum Industry Abstract 12.1. Introduction 12.2. Oil and gas project development 12.3. The Project development process 12.4. Contractors and contract terms 12.5. Economics of project development Chapter 13: Political and Environmental Risks, Tax and Insurance Abstract 13.1. Introduction 13.2. Political and country risks 13.3. Environmental risks 13.4. Taxation and the petroleum industry 13.5. Insurance 13.6. Unforeseen events and force majeure Part III: Project Finance Applied to the Petroleum Industry Introduction Chapter 14: The Role of Project Finance in the Petroleum Industry Abstract 14.1. Introduction 14.2. Investment requirements of the petroleum industry 14.3. Conventional sources of funding 14.4. The role of project finance 14.5. Hybrid finance structures for the petroleum industry Chapter 15: Risk Analysis and Bankability for Oil and Gas Projects Abstract 15.1. Introduction 15.2. Lender analysis of oil and gas project risks 15.3. Sponsor risks in oil and gas project finance 15.4. Lender approach to project risks 15.5. Risk mitigation techniques and structures Chapter 16: Project Economics and Cashflow Forecasting Abstract 16.1. Introduction 16.2. The Role of cashflow forecasting and modelling 16.3. Building the project forecasts 16.4. Debt routines and model outputs 16.5. Debt optimisation and the base case 16.6. Sensitivity analysis and debt break-even Chapter 17: Finance Structures and Terms Abstract 17.1. Introduction 17.2. Overview of financial structuring 17.3. Capital structure and the composition of debt 17.4. Funding, repayment and maturity of debt 17.5. Cost of funds 17.6. Lender controls 17.7. Sponsor support and other forms of credit enhancement 17.8. Security Chapter 18: Finance Structures for Upstream, Midstream and Downstream Projects Abstract 18.1. Introduction 18.2. Upstream project finance structures 18.3. Midstream project finance structures 18.4. Downstream project finance structures 18.5. Risk management and derivative contracts Chapter 19: Oil and Gas Project Finance Documentation Abstract 19.1. Introduction 19.2. Documenting the project finance transaction 19.3. Lender commitments and term sheets 19.4. Principal terms of the finance documents 19.5. Project finance documentation processes 19.6. Concluding remarks Bibliography Subject Index