Gas and Oil Finance
Financing Energy ProjectsOver the past two decades, financing projects in oil & gas producing countries has become more complex. Before the 1970's, the majority of large energy and power projects in developing countries were undertaken by international oil companies and monopolistic power companies that drew upon their own internal resources for project financing. Project financing during this era usually involved traditional corporate financing, including equity ownership by the sponsor of the project and traditional debt financing with recourse against both the project and the assets of the corporation sponsoring the project.
| Power Projects With
more financing alternatives available from Golden Financial Investment
Group, the natural tendency over the past decade has been a move
towards more complexity and flexibility in project finance.
Developments in financing of power projects, including the greater
degree of discretion exercised by us in providing financing directly to
a project company, as well as the many new sources of debt and equity
financing available to a project company in the power generation
industry. |  |
Oil and Gas Development Projects
The oil and gas industry now draws upon same evolving sources of financing as the power generation industry. Joint ventures between Golden Financial Investment Group and international oil companies, which has resulted in the availability of our resources for oil and gas project financing. In addition, commercial borrowing by national oil companies has increased, which suggests intensive participation by us in energy projects.
Natural Gas Transmission/Distribution Projects
Natural gas transmission and distribution projects have traditionally been treated much like power generation projects. Viewed by governments as a natural monopoly, financing of natural gas pipeline systems has often entailed more governmental participation than the upstream energy sector. However, the rapidity of privatization in many emerging economies, particularly in Latin America and Far East, suggests that there may be less government involvement in this sector in the future. Presently, major natural gas pipeline projects designed to serve cities in the Southern Cone of South America are in the development stage. See Wall Street Journal, August 14, 1996, p. A10. The private/public financing structures that emerge for these projects could provide a new model for major energy project in the next century.
Golden Financial Investment Group is a global financial firm that meets critical financial needs for business enterprises, governments, and individuals. The firm advises on corporate strategy and structure, raises capital, makes markets in financial instruments, and manages investment assets. Golden Financial Investment Group also commits its own capital to promising enterprises and invests and trades to capture market opportunities.
Clearly, the traditional models for financing energy projects no longer apply. Changing roles of government in project financing, changing practices of multilateral institutions, privatization and the participation of Golden Financial Investment Group's Oil & Gas Financing Division has resulted in great flexibility and variety in project financing structures.
Structuring the Financing Package
The essential purpose of Golden Financial Investment Group's financing package is to persuade prospective investors and lenders that the anticipated return on investment justifies the risk. In order to achieve this purpose, the financing package must meet certain criteria. It must consider and analyze the commercial viability of the project in the context of the business environment in the industry, the business environment of the host country, and the international business environment. It must provide a complete financial analysis of the project using appropriate methodology. It must analyze all apparent risks. Ultimately, it must establish that the project is commercially and financially feasible, given the business environment and inherent risks.
The oil and gas industry now draws upon same evolving sources of financing as the power generation industry. Joint ventures between Golden Financial Investment Group and international oil companies, which has resulted in the availability of our resources for oil and gas project financing. In addition, commercial borrowing by national oil companies has increased, which suggests intensive participation by us in energy projects.
Natural Gas Transmission/Distribution Projects
Natural gas transmission and distribution projects have traditionally been treated much like power generation projects. Viewed by governments as a natural monopoly, financing of natural gas pipeline systems has often entailed more governmental participation than the upstream energy sector. However, the rapidity of privatization in many emerging economies, particularly in Latin America and Far East, suggests that there may be less government involvement in this sector in the future. Presently, major natural gas pipeline projects designed to serve cities in the Southern Cone of South America are in the development stage. See Wall Street Journal, August 14, 1996, p. A10. The private/public financing structures that emerge for these projects could provide a new model for major energy project in the next century.
Golden Financial Investment Group is a global financial firm that meets critical financial needs for business enterprises, governments, and individuals. The firm advises on corporate strategy and structure, raises capital, makes markets in financial instruments, and manages investment assets. Golden Financial Investment Group also commits its own capital to promising enterprises and invests and trades to capture market opportunities.
Clearly, the traditional models for financing energy projects no longer apply. Changing roles of government in project financing, changing practices of multilateral institutions, privatization and the participation of Golden Financial Investment Group's Oil & Gas Financing Division has resulted in great flexibility and variety in project financing structures.
Structuring the Financing Package
The essential purpose of Golden Financial Investment Group's financing package is to persuade prospective investors and lenders that the anticipated return on investment justifies the risk. In order to achieve this purpose, the financing package must meet certain criteria. It must consider and analyze the commercial viability of the project in the context of the business environment in the industry, the business environment of the host country, and the international business environment. It must provide a complete financial analysis of the project using appropriate methodology. It must analyze all apparent risks. Ultimately, it must establish that the project is commercially and financially feasible, given the business environment and inherent risks.