Gulf Oil and Gas accountACCOUNT

Completion Guarantee Lifted for Petro Rabigh Financing

Source: 4/18/2012, Location: Middle East

Rabigh Refining and Petrochemical Company (Petro Rabigh), jointly founded by Sumitomo Chemical and Saudi Aramco, is operating an integrated refinery and petrochemicals complex (the Rabigh Project) in Rabigh, Saudi Arabia. In undertaking the Rabigh Project, Petro Rabigh had entered into project financing agreements with a syndicate of banks, and Sumitomo Chemical provided a financial completion guarantee in that connection. As certain requirements imposed under the financing agreements in respect of the complex’s consecutive operational performance and Petro Rabigh capabilities of debt repayment came to be satisfied recently, Sumitomo Chemical was released from its completion guarantee, effective April 17, 2012.

A financial completion guarantee is an arrangement whereby sponsors (investing companies) for a given project guarantee full repayment of a loan to its lender on behalf of the project company, with the guarantee obligation lasting until, following the completion of plant construction, the project company becomes able to verify its capabilities of continuously generating cash flow at a level allowing the debt repayment through stable plant operation.

In March 2006, Petro Rabigh signed the project financing agreements with the Japan Bank for International Cooperation (JBIC), the Public Investment Fund (PIF) of Saudi Arabia and other financial institutions to receive an aggregate loan of US$5.8 billion, which accounts for about 60% of the total project cost amounting to approximately US$10 billion. Concurrently, under contract with the syndicate of banks, Sumitomo Chemical and Saudi Aramco each offered a financial completion guarantee, corresponding to half the total amount of the loan, respectively.

Petro Rabigh already commenced making the scheduled repayment of the debt principal in June 2011, and the outstanding debt as of April 2012 stands at approximately US$5.5 billion. Going forward, the company will repay the balance of the loan out of cash flow generated from its operating activities, without having recourse to the sponsors’ creditworthiness.

Sumitomo Chemical will continue to support Petro Rabigh so that the company will be able to keep stable operation and achieve sustained growth in the years ahead.

Financials and Investment News in Saudi Arabia >>

United Kingdom >>  2/15/2019 - Angus Energy has announced that the Company has placed, subject to admission to trading on AIM, 55,000,000 new Ordinary Shares in the Company with exi...
Egypt >>  2/14/2019 - Dana Gas PJSC ("Company"), the Middle East's largest regional private sector natural gas company, today announced its Preliminary Unaudited Financial ...

Saudi Arabia >>  2/14/2019 - Saudi Aramco has selected banks to arrange its first international debt sale which will help it finance the acquisition of a stake in Saudi Arabian Ba...
Australia >>  2/12/2019 - Carnarvon Petroleum Limited is conducting a placement to institutional and sophisticated investors to raise approximately $50 million. The Placement c...

Norway >>  2/7/2019 - DNO ASA, the Norwegian oil and gas operator, announced 2018 net profit of USD 354 million on revenues of USD 829 million, the highest annual revenues ...
Tanzania >>  2/7/2019 - The Company is pleased to announce that as it enters a period of operations it has raised approximately £1.85 million (approximately $2.40 million) be...

Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Saudi Arabia Oil & Gas 1 >>  2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 |

Oil & Gas Projects in Saudi Arabia >>

More News

Related Links

Gulf Oil and Gas
Copyright © Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.