Cash Secured for Balai Cluster RSC Pre-Development (Malaysia)
BC Petroleum Sdn Bhd (“BCP”), the company incorporated by ROC, PETRONAS and Dialog Group to operate and manage the Balai Cluster Risk Service Contract in Malaysia, has secured project finance for the pre-development phase of the project.
BCP has entered into a facility agreement for the financing of the pre-development phase for US$162 million. The three banks acting as mandated lead arrangers are Sumitomo Mitsui Banking Corporation, Standard Chartered Bank and CIMB Bank Berhad (“CIMB”) and, with the appointment of CIMB Investment Bank Berhad as facility agent and security agent and CIMB as account bank. The final maturity date for the loan facility is 16 December 2014.
The Balai Cluster includes four discovered oil and gas fields; Balai, Bentara, West Acis and Spaoh. The pre-development phase of the Balai Cluster RSC is progressing and work undertaken since the start of 2012 has included: the fabrication of four wellhead platforms; the commencement of load-out and installation of wellhead platforms; the finalisation of a drilling rig contract; the procurement of drilling supplies and services (drilling is anticipated to commence mid-year); and completion of the purchase of an oil tanker and commencement of its conversion to an Early Production Vessel (“EPV”). The pre-development phase is expected to be completed by February 2013.
All fields within the Balai Cluster will be appraised during the pre-development phase. On successful completion of the pre-development phase and agreement on economic viability of the fields, BC Petroleum will submit a field development plan and progress to the development phase.
Since the commencement of the Balai Cluster RSC pre-development phase, ROC has directly contributed funds of US$30 million to BCP. The total cost of the pre-development phase is estimated to be between US$200 and US$250 million.
BCP’s Chief Executive Officer and ROC’s Chief Operating Officer, Rolf Stork, stated that:
“Securing project finance for the pre-development phase of the Balai Cluster RSC is an important step, not only for BCP, but also for the broader Malaysian upstream oil and gas sector. Project financing of the Balai Cluster RSC demonstrates the confidence of international financial institutions in the structure and bankability of the RSC negotiated between joint venture partners and PETRONAS. Moreover, project financing of the Balai Cluster RSC will provide ROC with additional financial capacity and flexibility, which will assist the Company in pursuing future growth through a range of further opportunities located in the focus region of China, South East Asia and Australasia.”
Offshore Energy Today Staff, May 17, 2012