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Capex financing is critical to the development of the industry in the crisis environment

In order to be able to meet increased capex requirements, the oil and gas sector needs to find solutions for long-term funding for upstream development, downstream modernisation, and corporate consolidation. Long-term projects and corporate financing are becoming important instruments.

Estimates suggest that Russia will need to spend US$150bn on the oil and gas sector in the seven years to 2015.

SMBC group has provided corporate funding to the sector totalling over US$2bn, including facilities for some of the largest Russian oil and gas companies. Project financing is in its early stages in Russia, and SMBC is committed to developing this product. We recently arranged US$5.3bn financing for a 13.5-year facility with JBIC guarantee for Sakhalin II.

Our leading position with the Japanese governmental agencies JBIC and NEXI will be crucial to the provision of long-term and low-cost financing to facilitate the required investment in the sector.

The involvement of other agencies such as Korea Eximbank, European Investment Bank, and Nordic Investment Bank, as well and European and US ECAs will often be of great importance for the future growth of this sector.