Project Finance Petrozuata
Evaluation of
Petrolera Zuata, Petrozuata C.A.
Project Finance Case Study
1
Table of Content
Petrozuata introduction ....................................................................................................................... 4
1. How should PDVSA finance the development of the Orinoco Basin? What are the costs and benefits of using project finance instead of traditional internal debt finance? ...................... 4
1.1. Project finance scenario (BBB) ................................................................................................. 6
1.2. Corporate finance scenario (BB) ............................................................................................... 6
2. What are Petrozuata’s three or four most important operating risks? How does the deal structure address these risks? Who would bear these risks if the project were financed internally by PDVSA instead? ............................................................................................................. 6
2.2 Pre-completion risks ................................................................................................................. 7
2.3 Post completion risk .................................................................................................................. 7
2.4 Sovereign risk ........................................................................................................................... 8
2.5 Financial risk ............................................................................................................................. 8
3. As one of the sponsors, what are your expected returns? Please assume the asset beta for an integrated drilling, pipeline, and refining firm is 0.60. ................................................................. 9
3.1 The ECF Method ..................................................................................................................... 10
3.1.1
Scenario 1:
Petrolera Zuata, Petrozuata C.A.
Project Finance Case Study
1
Table of Content
Petrozuata introduction ....................................................................................................................... 4
1. How should PDVSA finance the development of the Orinoco Basin? What are the costs and benefits of using project finance instead of traditional internal debt finance? ...................... 4
1.1. Project finance scenario (BBB) ................................................................................................. 6
1.2. Corporate finance scenario (BB) ............................................................................................... 6
2. What are Petrozuata’s three or four most important operating risks? How does the deal structure address these risks? Who would bear these risks if the project were financed internally by PDVSA instead? ............................................................................................................. 6
2.2 Pre-completion risks ................................................................................................................. 7
2.3 Post completion risk .................................................................................................................. 7
2.4 Sovereign risk ........................................................................................................................... 8
2.5 Financial risk ............................................................................................................................. 8
3. As one of the sponsors, what are your expected returns? Please assume the asset beta for an integrated drilling, pipeline, and refining firm is 0.60. ................................................................. 9
3.1 The ECF Method ..................................................................................................................... 10
3.1.1
Scenario 1: