Energy and Resources Financing
A Practical Handbook
Energy and Natural Resources Financing in Practice covers financing across the energy and natural resources spectrum, from upstream oil and gas, pipelines and liquefied natural gas through to refineries, and from conventional power and renewable energy to nuclear power and mining.
This new book answers the need for a comprehensive guide for financing in these sectors and is written by leading practitioners from their position at the centre of transactions in this moving market. It provides invaluable insight into the challenges faced by modern practitioners and how these challenges are addressed against the backdrop of highly volatile oil, gas and other commodity prices, as well as the need to find ways of financing huge investment into renewables and nuclear energy necessary to control carbon emissions.
The book is co-edited by oil and gas financing expert Huw Thomas and renewables and conventional power expert Antony Skinner. Contributions are made by leading practitioners from Milbank, Clifford Chance, Infrastructure Development Partnership, Arntzen de Besche and Ashurst.
Energy and Natural Resources Financing in Practice is aimed at executives in energy and resources companies, as well as bankers and advisers involved in these sectors. The content and style is accessible to those who are new to these sectors, but the level of practical insight is valuable even to the most seasoned executives and professionals. This title is a useful introduction to these sectors and a day-to-day reference point for those working on transactions.
Table of Contents
|Refinery and petrochemical projects||83|
|Project de-risking in financing oil and gas pipelines||53|
|Power and renewables projects||111|
|High yield financings||183|
|Norwegian high yield bonds||197|
|Export credit agencies||259|
|About the authors||287|
Erlend B Bakken
Lawyer, Michelet & Co
Erlend Bakken is one of the founders of Michelet & Co, a law firm with fully integrated offices in Oslo and London. Michelet & Co provides legal and strategic advice to a range of clients within the oil and energy sector. Erlend has more than 15 years’ experience advising oil and gas companies, investors, financiers and investment banks on corporate projects and corporate finance transactions. He regularly acts for both issuers and investment banks in bond issues. Erlend has a law degree from the University of Oslo and an LLM from the University of California.
Counsel, Ashurst LLP
Kerion Ball is a counsel in the derivatives and structured products practice of the securities and derivatives group of Ashurst LLP, based in London. Kerion advises banks, funds, other investment firms and corporates on a wide range of derivative products, with a focus on corporate equity and commodities derivatives, prime brokerage, structured funding transactions, regulatory capital driven structures and hedging solutions. Kerion regularly advises on netting, collateral and security issues as well as clearing and other regulatory matters associated with such transactions.
Kerion has recently advised on mezzanine financing linked to future projected oil production in connection with a secured borrowing base facility and related hedging of projected oil production in connection with the borrowing base facility, as well as hedging arrangements on a number of public authority sponsored project finance transactions. His experience also includes advising on an innovative structured energy derivative.
Senior associate, Ashurst LLP
Nacim Bounouara is a senior associate in the energy, transport and infrastructure department of Ashurst LLP, based in London. He specialises in project development and financing of energy and infrastructure projects, acting for lenders and sponsors across Europe, Africa and the Middle East.
Nacim’s recent experience includes advising ACWA Power on the three phases of the Noor solar projects in Ouarzazate (Morocco) and the lenders on the development and financing of the Dublin Waste-to-Energy project.
Senior lawyer, Arntzen de Besche Advokatfirma AS
Hege Dahl is a senior lawyer in the corporate and M&A department of Arntzen de Besche. She assists with questions related to corporate law, capital market transactions, securities law and financial markets regulation. Hege assists companies and investment banks in connection with stock exchange listings, in restructurings of companies and in takeover bids for listed shares. Hege also provides legal advice on regulatory requirements for investors, investment firms, funds, financial institutions and insurance companies.
Hege has worked as a lawyer at the Oslo Stock Exchange. She also has experience as a deputy judge as well as a senior adviser at the Ministry of Finance. Hege has been a member of and secretary for several government-appointed law commissions, in particular related to security law.
Partner, Infrastructure Development Partnership LLP
Tom has over 20 years’ experience as a lawyer, risk analyst and business strategist.
Tom has been a core member of negotiating teams that have delivered globally significant energy projects, including the 1 million bpd BTC oil pipeline and the parallel 10 bcma SCP gas pipeline and he led the negotiation of the government agreements for the 10 bcma TAP gas pipeline. He has advised governments as well as companies and has led cross-functional teams delivering commercial structuring, financing and strategy advice for energy projects across Africa, the Middle East and North America. Prior to IDP, he was regional adviser to BP plc for Africa, the Middle East, Russia, the Caspian and Turkey. Recently, Tom authored a study on global cross-border oil and gas pipelines under a grant from the Association of International Petroleum Negotiators (July 2014) and was consulting editor for Risk and Energy Infrastructure, published by Globe Law and Business (London, 2011).
Lawyer, Michelet & Co
Geir Evenshaug is one of the founders of Michelet & Co which has fully integrated offices in Oslo and London. Michelet & Co provides legal and strategic advice to a range of clients within the oil and energy sector. Geir has more than 15 years’ experience advising oil and gas companies, investors, financiers and investment banks on corporate projects and corporate finance transactions. He has been involved in most of the major corporate oil and gas transactions in Norway during recent years. He also has considerable experience in cross-border bond loan issues and complex restructurings. Geir has a law degree from the University of Oslo and an LLM from the University of Cambridge, England.
Partner, Allen & Overy LLP
Barry Irwin is a partner in Allen & Overy, based in Singapore, and specialises in advising clients in the energy and resources sector, with a focus on mining, oil and gas, renewable energy and related infrastructure. He has advised clients throughout the Asia-Pacific and Africa on a range of crossborder transactions including structuring new projects, project acquisitions and disposals, joint ventures, farm-ins, offtake arrangements, mining services, and sales and marketing. Barry is recognised in independent directories as one of the leading global mining and oil and gas lawyers. He is a member of the Mining Law Committee of the International Bar Association, and the President of the Asian chapter of the Australian Mining and Petroleum Lawyers Association.
Barry is one of the authors of Minerals and Mining, published by Globe Law and Business, a contributing author to the World Bank Institute’s Guide to Key Documentation and Governance for Extractive Industries, and a contributor to Long Term Contracts, published by the Federation Press, on the practical, commercial and legal operation and effect of long-term commodities supply agreements.
Associate, Clifford Chance LLP
Anthony Martinez is an associate in the corporate practice of Clifford Chance LLP, specialising in private mergers and acquisitions, joint ventures and private equity transactions, particularly in the energy sector and emerging markets. He is a member of the firm’s energy and infrastructure sector group and advises on a variety of transactions, including corporate and asset-level acquisitions and disposals as well as project development work across the energy value chain. He has advised both private and public sector entities in various regions, particularly the former Soviet Union, Africa, the Middle East and Latin America, and was recently seconded to the energy regulatory agency of a Latin American government, where he advised on upstream oil and gas agreements, including production-sharing contracts and licences, joint operating agreements and farm-ins.
Partner, Ashurst LLP
Nikhil Markanday is a partner at Ashurst LLP, based in London. He specialises in the project development and financing of energy projects, in particular in the oil and gas sector. Nikhil is a finance specialist with significant expertise in acting for both sponsors and lenders on complex multi-sourced financings across the energy sector, including projects involving project bonds. He has advised clients on the project financing aspects of a number of LNG projects, pipeline, refinery and thermal power projects. Nikhil has also spent time on secondment to the European Investment Bank where he worked in the legal directorate.
Partner, Milbank, Tweed, Hadley & McCloy LLP
Clive Ransome is a partner in the projects, energy and infrastructure group of Milbank, Tweed, Hadley & McCloy LLP, based in London. He has specialised in oil and gas, power and infrastructure projects and other project-financed transactions for over 20 years while based in London and the Far East.
Clive was a member of the Linklaters team that advised the 214 bank lending syndicate on the UK France Channel Tunnel project. He is currently advising Mitsubishi Heavy Industries, Itochu and EnGie on the Sinop nuclear power plant project in Turkey. He has also worked on the $12 billion Sadara and $7 billion PetroRabigh petrochemicals projects in Saudi Arabia – two of the largest project financings in the market in recent years.
Clive was a contributor to The International Legal Guide to: Project Finance 2013 (OUP); the UK chapter in Guide to Financing Oil and Gas Projects (Euromoney); and frequently contributes articles on finance and energy to legal magazines.
Senior associate, Ashurst LLP
Nick Ross-McCall is a senior associate in the resources and utilities group of Ashurst LLP, and is based in London. He specialises in the financing and development of energy projects, in particular upstream and power financings, with over 10 years’ experience.
He has advised lenders and sponsors on numerous reserve-based lending transactions and other upstream finance products, including of assets in the North Sea, South East Asia, Russia, the Middle East and Africa.
Nick speaks regularly at conferences on energy matters and has authored many chapters and articles on upstream financing and other energy issues.
Antony is a partner in the corporate projects team of Ashurst based in London. He specialises in renewable and thermal power with respect to development, financing and M&A in the UK, Europe and Africa. Antony has advised sponsors and lenders, purchasers and vendors in a range of transactions in relation to renewables and power generation developments and in connection with a number of renewable portfolio acquisitions and financings. Antony advised the developer in connection with the development, equity raising and financing of a 60MW wind farm in Kenya. Antony has also advised Infinis in connection with the development and financing of over 300MW of onshore wind farms in the UK. Antony also advised the lenders in connection with the financing of the Carrington 884MW combined cycle gas turbine project in the UK.
Partner, Ashurst LLP
Anna-Marie Slot is the head of high yield at Ashurst and a partner in the finance practice. She is currently based in Hong Kong. She has extensive experience acting for banks and other companies in a wide range of corporate finance and securities transactions, including high-yield debt offerings, tender offers, debt buybacks, refinancings, and numerous securities transactions such as Rule 144A and Regulation S offerings, as well as mezzanine debt investments and senior credit facilities. Her practice also includes advising companies on US securities law matters.
She has represented the underwriters in the first clean energy company out of India to issue a high yield bond, the underwriters in an offering by an Indonesia conglomerate with oil and gas interests in Indonesia, and MIE Holdings, an upstream oil and gas company, on its high yield issuances.
Anna-Marie is described by clients as “our first choice of adviser for complex matters” in Chambers 2015 Asia Pacific for China: high yields products.
Partner, Ashurst LLP
Huw Thomas is a partner in the resources and utilities group of Ashurst LLP, based in London. He has specialised in energy and natural resources financings for over 25 years, with a particular emphasis on upstream oil and gas financings. Huw has led Ashurst teams on a number of leading upstream oil and gas financings, including the $4 billion borrowing base facility for Lundin Petroleum AB, the up to $1.7 billion corporate facility for EnQuest plc and the $340 million borrowing base facility for Oranje-Nassau Energie BV, among many others.
Huw has also advised on Norwegian high yield bond issuances for several UK-headquartered oil and gas exploration and production companies, including Xcite Energy Resources plc, Salamander Energy plc and Iona Energy Co (UK) plc.
Huw speaks regularly at conferences on oil and gas financing and is a regular author on upstream oil and gas financing topics.
Partner, Ashurst LLP
Philip Thomson is a partner in Ashurst LLP, based in London. Philip specialises in the development and financing of large-scale projects in the energy sector. He acts for project sponsors, borrowers, lenders and host governments. His experience also includes joint ventures, commercial contracts, M&A transactions and restructuring transactions in the energy sector. He has a particular focus on the LNG industry and has worked on numerous transactions across all segments of the LNG value chain. Earlier in his career, he spent several months on secondment to BG Group based in Bolivia working exclusively on a natural gas liquefaction project. Philip has recently returned from four years working out of the Singapore office on transactions across the Asia-Pacific region.
Partner, Ashurst LLP
David Wadham is a partner in the utilities and resources group of Ashurst LLP, based in London. He is global head of the firm’s utilities practice and has previously worked in the Middle East and Paris. David specialises in the development and financing of large-scale energy and infrastructure projects.
In particular, David advises sponsors and funders (including export credit agencies) on the development and financing of independent power projects (IPPs). He also advises on commercial agreements, such as power purchase and gas supply agreements, construction and operating sub-contracts, as well as conventional and Islamic financing documentation.
David has advised on power projects in developing markets across the Middle East and Africa, as well as in fully liberalised markets such as the United Kingdom. His experience spans conventional forms of generation such as gas and oil, renewables, including wind and solar, as well as nuclear power projects.
Partner, Allen & Overy
Peter Wilkes is a partner in the project, energy and infrastructure group of Allen & Overy, based in Perth. He holds a Bachelor of Jurisprudence and Bachelor of Laws. Peter specialises in financing and project development in the energy and resources sector. He has over 25 years’ experience acting for sponsors and banks on the financing techniques relevant to the mining sector including project financing, syndicated bank facilities, hybrid funding, loan notes issued in the international capital markets and farm-ins and joint ventures.
Peter led the team that acted for Fortescue Metals Group on its $2 billion secured project bond in 2006 as well as the Allen & Overy team which acted for Fortescue Metals Group on its $5bn senior secured term loan facility, winner of the ALB Australasia Law Awards, Debt Market Deal of the Year 2013.