In one of the few financings of a new-build off-shore oil/gas unit so far this year, Milbank, Tweed, Hadley & McCloy LLP has advised BBVA, HSBC, Sabadell and Santander in providing non-recourse project financing to fund construction and operation of two offshore drilling units to be owned by affiliates of Grupo R for oil and gas exploration by Mexico’s state-owned petroleum company Pemex (Petróleos Mexicanos).
The financing, which was led by Milibank Global Project Finance partners Dan Bartfeld (practice group leader) and Roland Estevez closed on March. It was the first successful vessel-related financing transaction in 2016 involving Pemex.
Pemex will lease the KFELS B-class mobile offshore, self-elevating drilling rigs – commonly known as jack-ups – from affiliates of leading Mexican energy infrastructure company Grupo R. Regarded as a workhorse for major offshore exploration, the KFELS B-class rigs, mounted several stories high over the water’s surface, are able to operate in shallow waters (depths up to 400 ft), with a drilling depth exceeding 30 000 ft. They are also known for best-in-class design for safety and environmental engineering features, with minimal emissions and discharges.?
“This would be a significant financing in any environment, but it’s especially impressive given the downturn of the global commodities markets,” said Mr. Bartfeld. “It demonstrates that as long as you have a strong sponsor, sound financial structuring and the demand of a producer of the scale of Pemex, you’ll still see a healthy international appetite for oil and gas assets coming out of Latin America.”
Mr. Estevez added, “Mexico has become the most important energy market in Latin America. Although the implementation of historic energy reforms has taken longer than expected, the reforms have started to bear fruit as the government continues to support partnerships with foreign producers.”?
Also part of the Milbank financing team representing the lenders were Global Project Finance associates Alejandra Garcia Garcia, Jennie DiFiore and Mark Greenfogel. ? ?Milbank has played a key part in Pemex’s offshore exploration efforts for many years, working on previous Grupo R financings and the development/financing of other Mexican and international companies focused on the Mexican offshore sector.
Adapted from a press release by Louise Mulhall
Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/05042016/milbank-advises-lenders-in-financing-of-two-offshore-drilling-units-for-use-offshore-mexico/