ROSNEFT & BP: GOING AHEAD
A $1.5-2 billion loan involving BP and Russian oil giant Rosneft is going ahead, bankers said on Thursday, even after arranging banks Lloyds and HSBC pulled out as unease grows among some Western lenders about funding Russian deals.
However, they said it was unclear whether the British-based banks would be replaced or the remaining lead arrangers, Deutsche Bank and Bank of China, would push on with completing the syndicated oil-prepayment loan on their own.
"There is an extensive bank group including Japanese, Chinese and European banks. The issue is not replacing the money ... it is whether we will replace the mandated lead arranger roles," a banker close to the deal said.
Rosneft and London-based BP, via a specially created company, are trying to complete the financing which is backed by the Russian group's future oil production.
Rosneft, BP and Lloyds declined to comment while HSBC could not immediately be reached for comment.
Lloyds is 25 percent-owned by the British government, which has repeatedly condemned Russia over its annexation of Crimea in March and accused it of involvement in a separatist rebellion in eastern Ukraine.
Moscow denies the charges but Rosneft chief Igor Sechin has been hit by U.S. sanctions as part of a broader move to punish Russia for its seizure of Crimea from Ukraine.
The loan was launched to banks in late November at $5 billion but progress has been slow and it was reduced to up to $2 billion in April.
Bankers said the deal still has enough support from lenders to go ahead despite the loss of Lloyds, which walked away this week followed by HSBC.
"All the other banks are still in the deal, I don't think it will have any impact, we are surprised they were there in the first place," a second banker said.
In April Royal Bank of Scotland, which is 80 percent owned by the British government, also walked away from a $1 billion club loan for Russian petrochemicals company Sibur.
Bankers are watching to see whether Deutsche Bank will continue to support the deal but said the lender was not under the same political pressure as British banks. Germany, which is a major importer of Russian natural gas, has often been more cautious towards Moscow than Britain, which gets most of its gas from the North Sea and Qatar.
"Germany has a greater energy dependency on Russia than the UK," the first banker said.
Rosneft is relying increasingly on pre-payment loans as other sources of financing dry up for Russian companies. Many Russian bankers have acknowledged growing difficulties in raising funds due to tensions with the West and the U.S. and European Union sanctions.
Rosneft took out two jumbo syndicated loans totalling $30.1 billion in late 2012 and early 2013 to finance its purchase of the TNK BP oil company. Lenders were left overexposed to Rosneft and its plans to refinance the bridging loans with bond issues fell through last May.
More information here.
|July, 16, 11:05:00|
|July, 16, 11:00:00|
|July, 16, 10:55:00|
|July, 16, 10:50:00|
|July, 16, 10:45:00|
|July, 16, 10:40:00|
AN - China National Offshore Oil Corp. (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.
REUTERS - Production at Libya’s giant Sharara oil field was expected to fall by at least 160,000 barrels per day (bpd) on Saturday after two staff were abducted in an attack by an unknown group, the National Oil Corporation (NOC) said.
IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.