Robust Project Finance in Oil and Gas - Risk and Debt Management

Review and develop debt structures for high CAPEX projects to balance the impacts the “credit crisis” on financing and investments

Attend this three-day interactive programme to gain insights into:

  • Various debt financing options for a project, both on a Project Finance basis as well as other corporate debt financing options - including Borrowing Base loan facilities
  • Debt structuring techniques that reflect and allocate the risks inherent in a project
  • Financial models to assess financial viability for the key project stakeholders
  • Motivations of key stakeholders in projects and their implications for the financing approach
  • Identification, evaluation and allocation of key risks in Project Finance
  • Risk and return issues for  both debt providers and  equity investors in the project in order to develop an appropriate capital structure

What is the programme about?

Oil and gas companies are faced with the challenges of the on-going impact the relatively weak and slowing economic growth in many major economies. Regardless of whether recent falls in energy prices reflect a temporary downturn or something more durable it is essential that financings are structured to reflect increased uncertainty in the business environment. Moreover the scale of some oil and gas projects makes it imperative to consider the viability of potential financial solutions.

This interactive and dynamic training programme will provide participants with a practical framework for the analysis and effective financial structuring of projects in a range of sectors in and related to the oil and gas industry. A special emphasis is put on debt management and restructuring to improve your cash flow and liquidity. It is a training programme you can’t afford to miss!


This practical and interactive programme is designed for all those involved in planning, advising, and financing high CAPEX projects in the oil and gas industries either within national and international oil companies, financial institutions or governments including:

  • Finance Managers, Analysts and Advisors
  • Auditors
  • Investment Managers investing in project backed bonds
  • Project engineers seeking to expand their knowledge of the financing of oil and gas projects
  • Personnel in banks in the following areas working with companies in the oil and gas sector
    - Credit risk analysis of corporates involved in Project Finance
    - Credit portfolio management
    - Corporate Banking Relationship Managers
    - Origination teams in debt and equity capital markets
    - Syndicated loan teams
    - Lawyers
  • Fund Management organisations with significant exposure to the oil and gas markets
  • Development Finance Institutions
  • Export Credit Agencies
  • Contractors
  • Corporate Treasury functions and other corporate personnel working with the financing of large scale projects
  • Lawyers and other professional advisers


A brief review of key influences on corporates’ debt financing decisions and potential use of Project Finance

Capital structuring decisions

  • Debt vs. equity considerations – risk and return
  • Credit rating and debt structuring issues and the impact of weakening energy prices
  • Debt pricing – how banks look at risk and return – principles of Risk Adjusted Return on Capital (RAROC)
  • Exercise: participants review and discuss the capital structures of selected companies in the oil  and gas industry

Introduction to Project Finance

  • Discussion based on case study in the  pre course material
  • Review of fundamental aspects of Project Finance, including the use of Project Finance  vs. other debt financing options and the roles and motivations of key project stakeholders

Risk analysis and allocation

  • Key risks, mitigants and risk allocation in Project Finance
  • Construction related
  • Financial risk exposures / Capital structure
  • Political risks in the current business environment
  • Lessons of experience in terms of key risks –principal reasons for projects , including oil and gas projects, facing difficulty
  • Environmental issues – Equator Principles and Environmental incentives

Case study – rating a Project Finance transaction and developing a rationale for involvement in a project.
Participants prepare a summarised Rating for a project (debt perspective)
Participants prepare a summary of the key risks and mitigants for an assigned project

Development and financial analysis of the projected operating performance and key drivers

Reviewing the project financial statements and developing a forecast

  • Developing the underlying assumptions
  • Peer group analysis

Participants will review of the underlying assumptions for a Project Finance transaction in the oil and gas industry.


Developing the operating cash flows

  • Key elements of a financial model for a Project Finance transaction
  • Key outputs of a model from an equity, debt and user perspective and key Project Finance financial ratios
  • Sensitivity techniques and assessing the ability of projects to withstand current weaknesses in energy prices

Reviewing and developing the underlying assumptions – participants review and develop background on a project to assess, develop and sensitise the underlying assumptions and the impact on the Project IRR.

Sources of debt financing in projects: financiers and their objectives

  • Impact of the “credit crisis” on Project Finance and implications for the oil and gas industry
  • Use of Project Finance: Project Finance vs. other debt financing options for projects – corporate debt, Borrowing Base facilities
  • Structuring Project Finance:
  • Tailoring the debt to reflect the operating cashflow profile for the project
  • Operational phase
  • Involvement of  political risk insurers
  • Export Credit Agencies and Development Banks
  • Accessing the Debt Capital markets
  • Credit enhancement techniques
  • Interest and foreign exchange management issues in Project Finance

Based on background information provided to the participants on terms and conditions for selected debt financing options participants will:
Review and develop the debt structure for the assigned case study and sensitise the DSCR to reflect key operating operating and financial risks
Decide on the financing approach in terms of the potential involvement of potential debt providers to a project as well as suggested pricing


How equity investors assess projects - financial yardsticks used by investors

  • Risk and return – refresher on issues relating to Cost of Capital
  • Access to equity capital for companies in the oil and gas sector in current market conditions – review of trends in equity valuation
  • Understanding the equity investor’s approach to achieving returns from the project company, including operating relationships with the project company, and cash extraction through re– financing

Participants will take put their hands on project appraisal techniques – evaluation of risk and return issues .

Delegates will work on the development of the Capital structure for an assigned project as a basis for developing a capital structure that meets the objectives of both equity investors and debt providers.

Documentation for Project Finance

  • Review of the key issues to be covered in Project Finance term sheets
  • Rationale and structure of loan documentation
  • Intercreditor issues
  • Third party credit support and security issues for debt financiers, including critical commercial issues in offtake agreements, fuel supply agreements, O&M agreements, construction contracts, and shareholder agreements

Participants consolidate the information developed during the course to produce a summarised recommendation with respect to an oil and gas related project.
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Testimonials for our Courses

“Very professional presentation, documentation and useful practical exercises. The occasional bouts of laughter were also welcome.”

Delivered by

Malcolm Sullivan started his career with National Westminster Bank (now part of RBS) before movin

Dates & Locations

This course is only available as a custom course tailored for your business, contact us to discuss your requirements.