Oil, Gas and Energy Financing

Euromoney Trading Ltd, May 2011, Pages: 182

Oil, Gas and Energy Financing covers the whole range of practical advice on every aspect of this wide subject. This is THE FIRST to deal with the post-uprising in the Middle East.

Moving from oil letters of credit to Product Sharing Agreements and hedging tactics, every case study, flow chart and example is real and drawn from the author's 25 years spent in banking in and for the Middle East, Africa and FSU countries.

From husk-generated sales, electricity grids and renewable energy sources to hydrocarbons and hedging Uranium, this book deals with:

- Pre Shipment Finance Models and Examples
- Nuclear Power in the Emerging Markets
- Country Risk of Oil Producing Countries and Political Risk Insurance
- Back-to-Back Letters of Credit, Guarantees, Forfaiting and all Financial Products
- Trader Financing Issues and how to avoid the 'Joker Brokers'
- Hydro-Power Projects
- Practical solutions in Azerbaijan, Algeria, Ghana, Cambodia, Turkey, The Falklands, India, Ecuador, Uganda, Kazakhstan among many, many others.

This global book will appeal to all involved in financing in and for the emerging markets. A must-have for bankers, traders, financiers and producers, up-stream and downstream.

Foreword

Buying oil and energy products in political turmoil

Acknowledgements

About the author

List of exhibits

List of boxes

1 An overview
The special nature of energy and hydrocarbon products
An analytical view of oil prices
Oil and gas sovereign risk
Special uses of traditional financing instruments
Being reimbursed in oil

2 The utilisation of oil Letters of Credit
A risk appraisal of a Letter of Credit. Who takes the most risk?
Standby and deferred payment oil Letter of Credit mechanics
Discounting Letters of Credit
Red Clause Letters of Credit and using Letters of Credit for pre-shipment finance.
The utilisation of control clauses

3 Back to back financing
The mechanics of back to back oil Letters of Credit
Securities and pitfalls

4 Practical, structured energy financing
Finance contracts with traders
Oil tolling financing dissected and risks analysed
Utilising the secondary markets
The Chinese model
The real forfaiting markets (Turkish importer–Azerbaijani exporter)
Calculating discount rates
High-political risk: oil refinery construction buyback (Ecuador)
Drinking at the ‘Last Chance’ saloon
Oil for planes: a pragmatic and structured pre-finance alternative to barter
An escrow account: tips for the faint-hearted

5 The reality of oil contract procedures
Stages of finance
The guarantee, its uses and abuses
Avoiding ‘joker brokers’
Classic back to front standby frauds
The red flags

6 Project structures and product sharing agreements
The PSA model, its uses and risk factors
Expenditures under a contemporary PSA
The calculations

7 Oil and energy political risk insurance
What is political risk?
Political risk: scientific versus market analysis
Pricing country risk
What are the real macro-risks in oil and energy PRI?
What are the real micro-risks in oil and energy PRI and how to manage them?

8 An econometric analysis of two hydrocarbon producing nations: a step-by-step approach to creating a country-lending matrix
Bank and country risk: the grid
Phase 1 The financial factors
Step 1 Outstanding debt service
Step 2 Debt service ratio
Step 3 Liquidity gap ratio
Step 4 Current account deficit (CAD) as a percentage of GNP
Step 5 Visible import coverage (VIC)
Phase 2(A) Structural/economic factors – Uzbekistan
Systemic risk quality of banking system
Phase 2(B) Economic scoring grid
Uzbekistan – political risk scoring matrix
Final score and categorisation
Algeria – a quick econometric analysis model for medium term lending
The political risk story of oil

9 Hedging with futures and OTC options, swaps and derivatives
The crude oil futures contract
Crude oil options
Swaps and swaptions
Derivatives risk
Tripartite margin call, a common speculative issue
Paper barrels, non-physical oil

10 Strategic, structured, oil financing
Securitisation the ultimate risk mitigator (Cambodia)
Structured export notes

11 Nuclear power in emerging market countries
Overview and profile of uranium production and nuclear power in the emerging markets
The cost of electricity generation by nuclear power
Financing models for nuclear generation plants
Specific nuclear power risks
Uranium, supply, demand and option case study – going long and repairing

12 Financing husk power and ethanol
The problems of private funding
Ethanol financing: the stages of financial input
Financial exposure to ethanol financing

Appendix I
Fitch Ratings – IndoCoal Exports (Cayman)
Limited series 2005-1 special export note report.
Future flow/Indonesia presale report

Appendix II
Behre Dolbear Group Inc 2010 ranking

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