In one of the only financings of a newbuild offshore oil/gas unit so far this year, Milbank, Tweed, Hadley & McCloy has advised BBVA, HSBC, Sabadell and Santander in providing non-recourse project financing to fund construction and operation of two jackups to be owned by affiliates of Grupo R for oil and gas exploration by Mexico’s state-owned petroleum company Pemex.
The financing closed on 16 March and was led by Milbank Global Project Finance partners Dan Bartfeld and Roland Estevez. 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 from affiliates of leading Mexican energy infrastructure company Grupo R. The jackups are able to operate in shallow waters with depths up to 400 ft, with a drilling depth exceeding 30,000 ft.
“This would be a significant financing in any environment, but it’s especially impressive given the downturn of the global commodities markets,” Mr Bartfeld said. “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.”