CANCELLED S&E: Distinguished Lecturer Jeffrey Jeter - Environmental Due Diligence for International Finance of Oil and Gas Projects
Development of large scale oil and gas projects is complex and expensive, with recent projects running into the tens of billions of US Dollars. Cash flow is critical on these projects, as once construction begins expenditure reaches a maximum and stays at or near this point for several years before being reduced to a somewhat steady state at a much lower rate for operations period. Income streams, however, do not begin until several years after maximum expenditure, and therefore large amounts of debt are carried for several years. If external financing is factored in to the cash flow model for these projects, it is essential that such financing is secured within the time frame allocated in the model; otherwise, project shareholders will have additional unanticipated cash calls to fund development of the project. The objective of this presentation is to explain the requirements and process of environmental due diligence implemented by the European Bank for Reconstruction and Development and similar public and commercial financial institutions (including numerous "Equator Principle" banks) and to share the lessons learned through the environmental due diligence on two recent projects, the Baku-Tbilisi-Ceyhan pipeline and the Sakhalin Energy Investment Company Sakhalin II project. Such an understanding can help avoid delays in securing future project financing.
Location:
Houston Petroleum Club
800 Bell St Ste 4300
Houston
,
TX 77002