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Norton Rose Fulbright advises on US$1.26 billion project financing for an FPSO Charter Project

Posted on: 27 October 2015

Global legal practice Norton Rose Fulbright has advised ING Bank N.V. (ING) and Sumitomo Mitsui Banking Corporation (SMBC) on an approximate US$1.26 billion loan to Tartaruga MV29 B.V. (TARMV29). TARMV29 is incorporated in the Netherlands and each of MODEC, Inc. (MODEC), Mitsui & Co., Ltd., Mitsui O.S.K. Lines, Ltd. and Marubeni Corporation have an equity stake.

The loan, provided as project financing, will support a project in which a long-term Floating Production Storage and Offloading (FPSO) chartering service to be offered by TARMV29 to Brazilian state-owned oil company Petróleo Brasileiro S.A. (Petrobras) for 20 years.

MODEC will build an FPSO unit with the capacity to produce up to 150,000 barrels of crude oil and 176,000,000 cubic feet of gas per day, and store about 1,600,000 barrels of crude oil. The FPSO is expected to be moored in the Tartaruga Verde and Tartaruga Mestica oil fields, offshore Brazil in waters 765 metres deep during the fourth quarter of 2017 and is the ninth FPSO chartered to Petrobras by MODEC.

The syndicate of lenders includes ING and SMBC as coordinating banks, and Mizuho Bank, Ltd., Overseas-Chinese Banking Corporation Limited, Clifford Capital Pte. Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd., DVB Bank SE, Natixis, Sociètè Gènèrale, Mitsubishi UFJ Trust and Banking Corporation, Sumitomo Mitsui Trust Bank, Limited and Crèdit Industriel et Commercial as co-financers.

The portion of the loan provided by the syndicate is around US$1.01 billion, and an additional US$252 million was provided by the Japan Bank for International Cooperation (JBIC), the Japanese export credit agency.

Adrian Joyce, partner, Norton Rose Fulbright commented: “The deal marks the first time ING and SMBC have together acted as coordinating banks on a MODEC FPSO chartered to Petrobras. Despite the challenges currently facing Brazil’s economy this syndicated financing demonstrates the confidence in Brazil’s offshore oil and gas sector, which MODEC considers to be the most promising market for the FPSO sector. We worked together across international offices to achieve the financial close and this is one of over 40 FPSOs and drilling units we have now advised on offshore Brazil as a global team.”

The Tokyo team was led by partner Adrian Joyce, supported by partner Jeremy Gibb, associates Jonathan Wang and Sophie Spells, as well as trainees Zheng Hao Chan and Ashleigh Standen. The Amsterdam team supported in relation to Dutch law aspects of the deal and was led by partner Wouter Hertzberger, assisted by associate Henry Palmen and trainee Koen Durlinger. The Singapore team supported in relation to anti-corruption/bribery matters, and was led by partner Wilson Ang, assisted by associate Samuel Leong. The London office provided support on the hedging aspect of the transaction, and was led by partner Nigel Dickinson, assisted by associate Victoria Nevins.

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