Post on 19-Jan-2016
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A Global A Global Investment Investment Partner forPartner forThe Development The Development of India’s Oil and of India’s Oil and Gas ResourcesGas Resources
International Finance Corporation
Presentation StructurePresentation Structure
Working with IFC
Working with IFC
InternationalFinance
Corporation
InternationalFinance
Corporation
IFC’sOil & GasBusiness
IFC’sOil & GasBusiness
International Finance International Finance CorporationCorporation
A member of the World Bank Group since 1956, net worth over $6 billion
Our mission is to promote sustainable private sector investment in developing countries, so as to reduce poverty and improve people’s lives
We operate on a commercial basis, and have made a profit every year since our inception
AAA rated international borrower: allows us to offer competitive financing to clients
Catalytic: mobilization of capital, minority role, investment limit
Business partnership: same risks as other investors, no government guarantees, satisfactory returns as well as benefit to host country
Additionally: private sector not displaced
Our Guiding PrinciplesOur Guiding Principles
The resources of a development The resources of a development bank and the flexibility of an bank and the flexibility of an
investment bankinvestment bank
IFC’s Products
Global industry andcountry knowledge
and contacts
Global industry andcountry knowledge
and contacts
Commercial andtechnical skills inemerging markets
Commercial andtechnical skills inemerging markets
Understanding togovernment
policies
Understanding togovernment
policies
Capital Mobilization Syndication with commercial banks (B loan program) Co-financing
Capital Mobilization Syndication with commercial banks (B loan program) Co-financing
Long-Term Financing Corporate / Project Equity / Quasi-equity
Long-Term Financing Corporate / Project Equity / Quasi-equity
Advisory Services Country, industry, financial and technical
Advisory Services Country, industry, financial and technical
Flexible Loans
Equity Participation
Fixed/floating rates, currency of choice (including Rupees) Commercial rates, repayment tailored to project needs Long maturities: 6-10 years, appropriate grace periods Range of security packages suited to project/industry
Portfolio investor Technical /commercial knowledge in many sectors Long-term partnership
Credit Enhancement Partial credit guarantees on local / foreign currency bond issues Credit enhancement mechanisms for asset securitization
Flexible set of loan and equity Flexible set of loan and equity products and structuring products and structuring
expertise add value to sponsorsexpertise add value to sponsors
Expropriation, contract repudiation, currency convertibility Governance Political stability
Country Risk Mitigation
$2.8 bn invested in India since $2.8 bn invested in India since 19581958
IFC’s own account portfolio, by sector (as of June, 2003)
IFC : $ 1.05 billion
Syndications: $72.6 Million
Infrastructure, Power, Telecom
17%
Manufacturing & Services
42%
Other12%
Financial Institutions
29%
Innovative ApproachesInnovative Approaches
Corporate GovernanceAdvise companies on oversight structures,
inter-company transactions, shareholder protections etc
Environmental SustainabilityAdvise companies on how to minimize
environmental costs and risks, and how to profit from environmentally sustainable business practices
Social SustainabilityAdvise companies on how to work with
local communities to ensure mutually beneficial outcomes which ensure lasting business success
Next Topic…Next Topic…
WorkingwithIFC
WorkingwithIFC
InternationalFinance
Corporation
InternationalFinance
Corporation
IFC’sOil & GasBusiness
IFC’sOil & GasBusiness
IFC in oil and gas – sectorsIFC in oil and gas – sectors
UpstreamEarly appraisal/limited
explorationDevelopmentPipelines
DownstreamPipelinesProcessingRefiningDistribution
Oil and Gas Opportunities in Oil and Gas Opportunities in IndiaIndia
Domestic Gas fieldsDevelopmentPipelines
Cross-border Gas TradeLNG TerminalsPipelines
Distribution and RetailingCNG auto fuels
Financing volumes – IFC Oil & GasFinancing volumes – IFC Oil & Gas
IFC Oil, Gas and Chemicals Commitments ($m)
0
200400
600
1997 1998 1999 2000 2001 2002 2003
B loans
IFC
IFC in oil and gas – Advantages IFC in oil and gas – Advantages
Capacity to accept/deal with political risksSpread of assetsRelationships with governments and
World BankStructuring experience
Team of Specialists –Finance,engineering, legal, social and environment
Broad international experience in project financing working with investors and banks
Focus on added development value – SME initiatives etc
Well recognized policies and guidelines No withholding tax on interest on IFC loans
Gasfield development in GujaratExpansion of first private sector gas development in India
and exploration/development of a greenfield gas fieldNiko’s strong operating history in India allowed for a
flexible corporate loan packageUS$30 mm A Loan, with an additional $10 mm if
additional reserves prove up
India : Niko Resources LtdIndia : Niko Resources Ltd
Venezuela – Petrobras Venezuela – Petrobras Energía Venezuela Energía Venezuela
Sponsors: Pecom Energia (Argentina)
Project Details: Expansion of Existing oil service contract at a time when bank financing for Venezuelan projects is not available
IFC’s Involvement and rationale: Financing of $105m to finance Pecom’s share of project development costs. Developmental impacts expected from:
(i) Expansion project for an operation that is generating significant benefits for local community and workers
(ii) Supporting regional company maintain an effective presence in Venezuela at a time when the private sector generally is under pressure there.
(iii)Tax revenues and exports for Venezuela
Kazakhstan – Lukoil Kazakhstan – Lukoil
Sponsors: Lukoil, British Gas, AGIP/ENI
Project Details: Karachaganak gas condensate development, Kazakhstan
IFC’s Involvement and rationale: Financing of $150m made up of $50m A loan, $25m C loan for IFC and $75m B loan for commercial banks. Support for environmental and social assessment and program. Developmental impacts expected from:
(i)Large project in a remote area that will support local community by providing employment and wide range of services
(ii)Important environmental remediation(iii)Training for local employees including
transfer of technical and management skills(iv)Tax revenues and exports for Kazakhstan.(v)Supports development of regional company
Oil sector in Nigeria – tumultuous history but new government implementing far reaching reforms
Small business development key to IFC’s investment strategy
$30 million credit facility providing competitively priced medium term loans – complemented by a TA program
Jointly funded by IFC, Shell and a local bank
Goal of facility: To build indigenous industrial capacity in the Niger Delta – a small but important first step
Nigeria: Oil Services Local Nigeria: Oil Services Local Contractor Credit FacilityContractor Credit Facility
Supporting business linkages between Supporting business linkages between small, local companies and majors…small, local companies and majors…
Chad Cameroon Pipeline Project Chad Cameroon Pipeline Project - IFC - IFC
Finance of $2bn pipeline:Providing up to $100m of financing for its own
account$100m B loan from commercial banks and working
with other financiers on due diligence Working with government,sponsor and other lenders
on:Revenue ManagementEnvironmental, social, technical due diligence
including EMPProject design, consultation, mitigation measures,
etcHelping increase local benefits in terms of
arrangements about local recruitment, training, SME development etc
Neutral broker to help parties reach agreement in relevant areas
Oil field in Chad and pipeline Oil field in Chad and pipeline (1050km) through Cameroon (1050km) through Cameroon
(total cost $3.7bn) (total cost $3.7bn)
Kazakhstan – FIOC/SazankurakKazakhstan – FIOC/SazankurakProject Location and cost : Kazakhstan - $45m
Sponsors: FIOC (USA) and AMG (Kazakhstan)Project Details: Sazankurak oil development 120km west
of Atyrau, Kazakhstan
IFC’s Involvement and rationale: Loan, quasi-equity and equity finance totaling $20m. Developmental impacts expected from:
(i) Small project in a remote area that will support local community by providing employment.
(ii) Training for local employees including transfer of technical and management skills
(iii)Tax revenues and exports for Kazakhstan.(iv)Supports government objective of effectively
developing small oil fields that large companies may not be interested in.
Albania – Patos MarinzaAlbania – Patos Marinza
Project Location and cost : Albania - $266m (subsequent plan Phase I $198m, Phase 2 $100m)
Sponsors: Anglo Albanian Petroleum Ltd (Premier (UK), Preussag (G), Albpetrol (A)
Project Details: Enhanced oil recovery for Patos Marinza field in Albania
IFC’s Involvement and rationale: Equity of $28.5m and loans total of $40m - Sponsors need for financing in Albania and strong developmental impact from:
(i) One of the first new private investments following changes in Albania.
(ii) Oil exports that generated foreign exchange and taxes.
(iii) Demonstration of best practice environmental (first EIA) and progressive rehabilitation of past damage.
(iv) Technical and Management Skills Transfer through introduction of new technology and management methods
Cote d’Ivoire – Block CI-11Cote d’Ivoire – Block CI-11Project Location and cost : Cote d’Ivoire >$200m over
time
Sponsors: Unincorporated joint venture with UMC, Petroci (State), GNR and Pluspetrol
Project Details: Development of the small offshore Block CI-11 oil and gas field, including pipeline to shore
IFC’s Involvement : Equity investment ($38m) as UJV partner and loans for IFC account ($30m) and for account of commercial banks in syndicated “B loans” ($40m).
Rationale/development Impact:
(i) First foreign investments in oil and gas sector following sector reform with assistance of World Bank – commercial banks would not invest with out IFC and investors concerned about Government gas offtake risk.
(ii) Source of low cost local gas to displace fuel oil and facilitate major new private investment in the power sector
(iii) Oil export revenue (iv) Revenue for government in the form of taxes and
profit shares.(v) Encourage further new investment
Other Recent InvestmentsOther Recent Investments Colombia – $35m medium term loans for oil
field expansion Africa - $0.25m seed capital for oil
development venture Cameroon - $20m extension of oil
development credit facility Bulgaria - $17m medium term loans for
small offshore gas field development Brazil – $40m 9 year term loans to support
gas investment program of local company Queiroz Galvao
Argentina – financing to local oilfield developers Astra, Bridas, San Jorge
Next Topic…Next Topic…
WorkingwithIFC
WorkingwithIFC
InternationalFinance
Corporation
InternationalFinance
Corporation
IFC’sOil & GasBusiness
IFC’sOil & GasBusiness
IFC Financing for private IFC Financing for private investment oil and gas - investment oil and gas -
productsproducts A loans – long term, US$, Fixed or floating B loans – syndicated funds raised from
commercial banks Guarantees Equity and quasi equity – including UJVs General Rules:
Not project managerMaximum of 30% project cost (A
loans/equity)Market ratesLook to sponsor for project completionNot pure exploration but will take
development/appraisal risk
How IFC Adds ValueHow IFC Adds Value
Access to equity and loan finance from one source
Longer tenor loans/longer grace periods
Loan syndication
State of the art financial structuring
‘Honest broker’ role with business partners, government
Global financial and technical expertise
Global leader on corporate governance and environmental and social sustainability
SummarySummary
WBG is keen to work with industry and others to ensure sustainable oil and gas development
Both private investors and countries have a strong incentive to manage the risks well to ensure this.
IFC can help with financing and other assistance
Likely areas for focus:Riskiest countriesGas developmentCross-border projectsServices sectorDevelopment value added – E&S, SME , etc
For more information, please For more information, please contact:contact:
No. 1, Panchsheel Marg,ChanakyapuriNew Delhi 110 021Telephone: (11) 2611-
1306Facsimile: (11) 2611-
1281
Email: SouthAsia@ifc.orgWebsite: www.ifc.org/
southasia
International Finance Corporation
Godrej Bhavan, 3rd Floor
Murzban RoadFort, Mumbai 200 001Telephone: (22) 5665-
2000Facsimile: (22) 5665-
2001
Dimitris Tsitsiragos Director, South Asia Department
A Global A Global Investment Investment Partner forPartner forThe Development The Development of India’s Oil and of India’s Oil and Gas ResourcesGas Resources
International Finance Corporation