Non-recourse financing secured by oil and gas fields

SMBC Group has been involved in transactions in various parts of the world, including the North Sea, Africa, southeast Asia and the Americas. The bank’s reserve-based lending activity is supported by in-house technical resources, including a reservoir engineer. In addition, it supports the offshore services industry through financing drilling rigs, floating production storage and offloading units (FPSOs) and oil field services companies. SMBC Group has arranged or participated in over 65 transactions since 2001.

Offshore services

Financing for FPSOs, floating storage and regasification units (FSRUs) and drilling rigs

Limited recourse project financing loan facilities and sale-and-lease-back financing for charter agreements.

Decommissioning

United Kingdom

SMBC Group offers solutions for covering decommission liabilities for the parties of a joint operating agreement in the form of abandonment guarantees or letters of credit. These can be arranged bilaterally or in a syndicated deal.

Exploration fund financing

Norway

The Norwegian tax regime allows for companies participating in production and transport of petroleum products on the Norwegian Continental Shelf to claim annually a percentage of eligible exploration costs from the Norwegian state.

Debt facilities are typically structured as a three to five year senior secured revolver. The amount available to the borrower is generally capped at a percentage of the tax value of the eligible exploration costs. Repayment is generated from the tax refunds as opposed to the company’s operational revenues or cash flows.

Related oil and gas products

SMBC Group has a strong track record in providing oil and gas project finance. Commodity hedging solutions for hydrocarbons clients is available from SMBC Nikko Capital Markets.