PETROZUATA CASE STUDY

Petrozuata Case Study



Petrozuata Case Study

Petrozuata

Petrozuata aims to maximize the benefits of project launch in Venezuela's Orinoco Belt oil fields. This is Venezuela's efforts to maximize its oil and gas revenues as part of. Petrozuata sponsorship, which is the company responsible for most of Venezuela's nationalization of oil companies BP SA (PDVSA) and the U.S. company ConocoPhillips stock name of the operation. (Leland and Pyle, 2007, 371-387)

Petrozuata, a2.4 billion oil field project in Venezuela, is the latest example of effective use of project financing, for several reasons. First, the analysis shows that a value can create large-scale Greenfield assets (in this case, wells, pipelines and breeder), which can be used as an independent entity, investment, project finance and support the typical scenarios a high degree of leverage the role. Given the nature of these investments, we can consider the venture capital project financing for fixed assets, if a 100 to 1000 times the investment, mainly through debt rather than equity financing. (2004393-414 Diamond)

Petrozuata, ConocoPhillips and Maraven are a joint venture established in 1993 under the initiative of developing the Orinoco Belt, all the world's largest known heavy oil deposits. The project consists of three parts: to create a series of extra heavy oil wells, pipeline transportation of crude oil and heavy crude oil chest Joseph clarify some of liquids coastal cities. Once refined, synthetic raw materials ensures the withdrawal agreement DuPont Conoco sold at market prices. 35-year contract at the end of the sale, ConocoPhillips Maraven transfer their shares, free of charge. (Bronars and Deere 2007232-254)

The Sponsor has agreed to use $ 975 million (40%) and $ 1.45 billion in debt (60 per cent) of the total cost of $ 242.5 million financing. Financial adviser, Citigroup and Credit Suisse First Boston, with several aspects of the financing strategies to increase the commercial banks, development agencies and bond investors, debt. Finally, sponsors of the bank financing raised $ 4.5 million and $ 100 million in bonds to Rule 144A, in which each non-recourse to sponsors, once the project.

The role of the organization

Petrozuata include domestic oil coast in which clear expression of opportunistic behavior is concerned. Instead, individual owners of oil fields and pipelines, are dedicated to find their own sponsors. However, not have their own boat, from the Venezuelan coast, heavy oil refinery in the United States transport, because the court is not specific to this transaction. Identification of the project also reflects the downstream partners expressed concern about theft, because only a few plants able to control the output, a serious oil. The project is a 35-year-old troop withdrawal agreement, ConocoPhillips refinery in Lake Charles (purchase contract) is closest to the refinery can handle oil.8 Although the long-term contract with ConocoPhillips, PDVSA (Venezuela's national oil company) is still hope is part of Conoco's owner, in order to avoid possible conflicts between the ex-post bilateral monopoly.

Petrozuata described in the above example, enforcement of contracts with Telstra's capital structure, including 85% of the ...