Dolphin International AS, a subsidiary of Norway’s Fred. Olsen Energy ASA , has signed a new five year bank credit facility of up to $1.5 billion.
The company will use the money to prepay existing bank loans, full-finance the newbuild Bolette Dolphin drillship and for general corporate purposes. The facility is provided by 12 international banks and GIEK/Eksportfinans.
The 6th generation drillship, under construction at Hyundai Heavy Industries’ shipyard in South Korea, is expected to be delivered in the third quarter of 2013. It will be able to operate in water depths of 12.000 feet (3660 m), and equipped for a maximum drilling depth of 10,000 feet (3050 m). Total project cost is estimated at $650 million.
After the delivery, the vessel will sail away to Mozambique to work for Anadarko under a contract signed in November 2011. The drillship, of Gusto P10000 design, has been chartered on a four-year drilling contract at a rate of approximately $488.000 per day.
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The Export-Import Bank of the United States (Ex-Im Bank) has authorized a $2.95 billion direct loan to support U.S. exports to the Australia Pacific liquefied natural gas (LNG) project.
The transaction is Ex-Im’s second-largest single-project financing in history and is also the Bank’s first LNG project in Australia.
The project on Curtis Island in south-central Queensland will produce natural gas from coal-seam wells and will have total capacity of nine million metric tons per year. China Petroleum and Chemical Corp. (Sinopec) and Kansai Electric Power Co. Inc. of Japan will purchase most of the LNG produced. China Ex-Im Bank and commercial lenders are also providing debt financing for the project.
Ex-Im’s financing is expected to support an estimated 11,000 American jobs. Principal U.S. exporters are ConocoPhillips Co. and Bechtel International, both of Houston, Texas. Additional exporters and suppliers include numerous small businesses in Texas, Colorado, Nevada, California, Oregon and Oklahoma.
“Our authorization paves the way for U.S. companies to export equipment and services to this major LNG project and, in so doing, to maintain thousands of American jobs across the country,” said Ex-Im Bank Chairman and President Fred P. Hochberg. “This financing also demonstrates how the United States and China can work together for our mutual benefit to foster trade and develop critically needed energy resources.”
The transaction, approved by Ex-Im’s board of directors on May 3, was announced following Chairman Hochberg’s trip to China, where he participated in the fourth round of the Strategic and Economic Development Dialogue (S&ED) with Treasury Secretary Timothy F. Geithner and other officials. The S&ED was held in Beijing on May 3-4.
Bechtel official Jay C. Farrar, who manages the company’s office in Washington, D.C., cited the importance of Ex-Im’s financing for U.S. exporters to large international projects. “Since 1992, Ex-Im Bank has been instrumental in the successful awarding and completion of projects involving Bechtel that have supported thousands of jobs for highly skilled employees at our company. The Bank’s financing also has helped to maintain thousands of additional jobs related to the supply chain for these projects,” Farrar said.
The Australia Pacific LNG project will involve development of coal-seam natural-gas fields, two gas transmission lines to a collection hub, a natural gas liquefaction plant and an adjacent marine shipping export terminal on Curtis Island near the city of Gladstone.
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In one of the most significant cross-border financings involving Brazil’s offshore energy sector this year, Milbank, Tweed, Hadley & McCloy LLP has represented a consortium of major international lenders providing a US$692 million debt facility for the purchase of the Black Diamond I deepwater drillship by Schahin Group.
The Brazilian energy and construction conglomerate is purchasing the drillship – to be built by Korea’s Samsung Heavy Industries – and will then charter it to Brazil’s Petrobras (Petróleo Brasileiro SA). Schahin Group has also entered into an operating agreement with Petrobras. Milbank advised joint lead arrangers The Export-Import Bank of Korea (Kexim), Mizuho Corporate Bank, WestLB AG and Standard Chartered Bank – along with a group of five other lenders from Europe and Asia.
A series of recent offshore discoveries by Petrobras have catapulted Brazil to the front ranks of energy-rich nations – industry watchers project that the country could become the world’s fourth-largest oil producer over the next decade. The Black Diamond I drillship – vital in the pursuit of capturing deepwater oil and gas reserves – has the capacity to operate in sea depths up to 3,000 meters (9,800 feet), and drill to a depth up to 10,000 meters, including area beneath the seabed (32,800 feet).
Milbank project finance partner Daniel Bartfeld led the firm’s representation, along with project finance senior associate Roland Estevez and associates Anne Shutkin, Alyssa Frederick and Jeeseon Ahn.
“International interest in the Brazilian offshore sector continues to be very strong, as major new fields continue to be identified, solidifying Brazil’s importance as a critical source of global energy for decades to come,” Mr. Bartfeld said. “We are pleased to work with some of the world’s leading international institutions in the financing of a new drilling rig to be used by Petrobras. The transaction highlights that leading lenders such as KEXIM, Mizuho, Standard Chartered, WestLB and the others have strong capacity for financing well-structured projects in Brazil’s offshore energy sector.”
Mr. Estevez added, “The international lending community is keenly interested in supporting major energy projects throughout Latin America, and nowhere is that appetite more acute right now than in Brazil. This deal, involving several of the key energy players in the country, is another example of Milbank’s ability to help leading Brazilian companies raise significant capital.”
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