Lloyds Bank Withdraws From Rosneft-BP Loan

Posted by Joseph R. Fonseca
Tuesday, June 03, 2014

 

Lloyds Bank, part-owned by the British government, has withdrawn from a $1.5-$2 billion trade finance deal involving oil major Rosneft, in a development highlighting the growing unease among Western banks in funding Russian deals.

Lloyds, along with Deutsche Bank, HSBC and Bank of China was a mandated lead arranger (MLA) on the loan to finance BP's purchase of crude oil and refined products from Rosneft.

The loan would be similar to previous such deals Rosneft had with BP or trading houses Glencore and Vitol but, according to banking sources close to the deal, Lloyds decided to walk away after several weeks of hesitation.

The bank is 25 percent-owned by the UK government, which has repeatedly condemned Russia over its actions in Crimea and eastern Ukraine. Rosneft's powerful chief Igor Sechin was hit by U.S. sanctions as part of a broader move to punish Russia for the annexation of Crimea.

"Lloyds' decision to leave the deal is because it does not want to embarrass the government, considering the current political situation with Russia," said one of the bankers. "I think it was scared of going upstairs to ask permission."

BP, Rosneft and Lloyds all declined to comment.

It is not clear yet if another bank will replace Lloyds as an MLA, the banker said. The loan has support from several lenders including Japanese, European and Chinese banks.

Rosneft and BP, via a specially created company, are trying to complete the financing, which is backed by Rosneft's future oil production. The loan was launched to banks in November but progress has been slow.

The deal stalled after the United States proposed sanctions against Sechin, a close ally of Russian President Vladimir Putin, at the end of April.

"[The deal] is grinding forward at a glacially slow pace," said the banker.

However, bankers are confident that the deal will still be completed.

"Lloyds walking away doesn't change anything," said a second banker. "Lloyds is not a Russian player, something will get done anyway. The surprise isn't that Lloyds has walked away but that it is there in the first place - its involvement was only based on its relationship with BP."

The facility pays a margin of 200 basis points (bps) plus fees.

Rosneft has become increasingly reliant on pre-payment loans as other sources of financing, including the bond markets, dry up for Russian companies.

Many Russian bankers have acknowledged growing difficulties in raising funds due to tensions with the West and sanctions.

Many Western banking chiefs snubbed the main Russian investment forum at the end of May although Rosneft and BP signed an important deal to explore for hard-to-recover oil in Russia.

Rosneft is also negotiating a similar $1.5-$2 billion deal with Swiss energy trader Vitol. BP has a stake of just under 20 percent in Rosneft.

(Additional reporting by Dmitry Zhdannikov; Editing by Pravin Char)

Maritime Reporter July 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Contracts

VT Halter to Build Bouchard ATB Tugs

VT Halter Marine, Inc., a subsidiary of Vision Technologies Systems, Inc. (VT Systems), today announced new contracts to build two 130-foot Articulated Tug Barge

Del Mar Signs Agency Agreement with Ciramar

Del Mar Marine Corp. announced it has signed an agency agreement with Ciramar Shipyards allowing the company to promote Ciramar Shipyard´s docking and facilities

Great Lakes Shipyard Wins EPA Drydock Contract

Great Lakes Shipyard has been awarded a contract for the United States Environmental Protection Agency (EPA) vessel R/V Lake Explorer II. The scope of work will include drydocking,

Legal

Bulk Carrier Detained; Two Crew Convicted

A Hong Kong flagged vessel was detained in Queensland following a Port State Control (PSC) inspection conducted by the Australian Maritime Safety Authority (AMSA)

Bill Promotes US LNG Vessel Transport

Congressman John Garamendi (D-CA-03), Ranking Member of the House Transportation and Infrastructure’s Coast Guard and Maritime Transportation Subcommittee, introduced H.

Citigroup Seeks British Court Backing on China Metals Claims

Citigroup Inc said on Friday it has started proceedings in commercial court in London to enforce its rights over $285 million of financing at two ports in China,

Offshore

Japan Loans Petrobras $500m to Build Ship Platforms

Brazil's state-controlled oil company Petrobras signed on Friday a $500 million loan from Japan to build eight ship platforms for the oil industry, as part of the

ESS Lands Second Contract with Dolphin Drilling

ESS Support Services Worldwide, part of Compass Group, has won a new, three-year contract, worth £10.5 million, to provide hotel and catering services to Dolphin Drilling Ltd.

MNZ Opens New Office in Port Taranaki

Maritime New Zealand (MNZ) informs that for the first time in 5 years it has a permanent presence in New Plymouth on the opening of a new office at Port Taranaki

Finance

Fortis Earns $47 mi in the 2Q 2014

Fortis Inc. achieved second quarter net earnings attributable to common equity shareholders of $47 million, or $0.22 per common share, compared to $54 million, or $0.

Japan Loans Petrobras $500m to Build Ship Platforms

Brazil's state-controlled oil company Petrobras signed on Friday a $500 million loan from Japan to build eight ship platforms for the oil industry, as part of the

SEACOR Holdings Announces Q2 Results

SEACOR Holdings Inc. has announced its results for its second quarter ended June 30, 2014. For the quarter ended June 30, 2014, net income attributable to SEACOR Holdings Inc.

Energy

Japan Loans Petrobras $500m to Build Ship Platforms

Brazil's state-controlled oil company Petrobras signed on Friday a $500 million loan from Japan to build eight ship platforms for the oil industry, as part of the

SEACOR Holdings Announces Q2 Results

SEACOR Holdings Inc. has announced its results for its second quarter ended June 30, 2014. For the quarter ended June 30, 2014, net income attributable to SEACOR Holdings Inc.

Kurdish Crude Oil Tankships: End-Game Still in Doubt

After a legal show-down in Texas this week, the outlook for a handful of tankers holding some $300 million worth of Kurdish oil is not looking good. Seemingly

News

Princess Cruises to Add New Ship to Fleet

Today, Princess Cruises, a subsidiary of Carnival Corporation & plc, announced that it has reached an agreement with the Italian shipbuilder Fincantieri to build a new ship,

Activity at Lerwick Harbor - Forecast

Increases in cargo, passengers and mackerel landings helped the Port of Lerwick achieve forecast traffic levels in the half-year to June, 2014, compared with the same period in 2013.

HII in $49.6 mi Deal for Work on USS George Washington (CVN 73)

Huntington Ingalls Industries (NYSE:HII) announced today that its Newport News Shipbuilding division has received a $49.6 million contract to begin planning

Mergers & Acquisitions

“K” Line and Ports America Deal on Strategic Partnership

KAWASAKI KISEN KAISHA, LTD. (“K” Line) is pleased to announce that “K” Line and Ports America have agreed to form a strategic partnership aimed at enhancing

Rio Tinto Pulls Plug on Mozambique Coal Venture

Rio Tinto has agreed to sell coal assets it bought through a $4 billion acquisition of Riversdale in 2011 for just $50 million to an Indian joint venture, ending

Rohr Dredge Continues European Expansion

Rohr International Dredge Holdings, Inc. announced that it acquired Eurl Rohr France, including its current backlog, inventory and all associated intellectual property (IPR), on July 23, 2014.

Offshore Energy

Japan Loans Petrobras $500m to Build Ship Platforms

Brazil's state-controlled oil company Petrobras signed on Friday a $500 million loan from Japan to build eight ship platforms for the oil industry, as part of the

ESS Lands Second Contract with Dolphin Drilling

ESS Support Services Worldwide, part of Compass Group, has won a new, three-year contract, worth £10.5 million, to provide hotel and catering services to Dolphin Drilling Ltd.

Geo-Science Provider TGS Reports Strong Half 2014 Results

TGS reports net revenues of USD 205 million in Q2 2014, compared to USD 210 million in Q2 2013. Earnings before interest and taxes (EBIT) totaled USD 82 million,

 
 
Maritime Security Maritime Standards Offshore Oil Pipelines Pod Propulsion Port Authority Salvage Ship Repair Ship Simulators Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1315 sec (8 req/sec)