International Finance Corporation A long term partner for global oil and gas Introduction to IFC IFC: A MEMBER OF THE WORLD BANK GROUP IBRD IDA IFC MIGA ICSID International Bank for International International Finance Multilateral Investment International Centre for Reconstruction and Development Corporation and Guarantee Agency Settlement of Development Association Loans to middle- Interest-free loans and income and credit- grants to governments in direct investment’s worthy low-income of poorest private non-commercial risks country governments countries sector development Investment Disputes Solutions Guarantees of foreign Conciliation and arbitration of investment disputes IFC: INTEGRATED SOLUTIONS FOR INCREASED IMPACT INVESTMENT  Loans  Equity  Trade finance  Syndications  Securitized finance broader market development and  Risk management enabling environment for private sector  Blended finance $51.7 bn portfolio (FY14) IFC ASSET MANAGEMENT ADVISORY  Firm-level advice  PPP transaction advice  In partnership w/World Bank, advice on 720 projects valued at $1.1 bn (FY14) COMPANY  Wholly owned subsidiary of IFC  Private equity fund manager  Invests third-party capital alongside IFC $6.4 bn under mgmt (FY14) IFC’S GLOBAL REACH   109 country and regional offices worldwide 4,015 staff (57% based outside Washington DC) ● ● ● Paris ● Washington ● Mexico City ● Santo Domingo ● ● Sao Paulo Buenos Aires ● Almaty ● Cairo New Delhi ● Dakar ● ● Tbilisi Istanbul ● ● Moscow ● Nairobi Johannesburg ● ● IFC HQ / Hub Offices IFC Country Offices Hong Kong THE POWER OF PARTNERSHIPS 900 Financial Institution Clients 3,000 Employees in 86 Countries IFC’S GLOBAL NETWORK FOR SOLUTIONS Host County Governments 30+ IFIs/DFIs 2,000 Private Sector Clients Civil Society Sovereign Wealth Funds/ Institutional Investors 20+ Bilateral Donors/ 15+ Private Foundations IFC Added Value in Oil & Gas OVER 50 YEARS OF SECTOR EXPERTISE: Greenfield projects Oil and gas corporate strategy Expansion projects Relationships with international stakeholders, including investors Modernization projects Technical advice and support OIL AND GAS EXPERTISE IFC HAS EXPERIENCE THROUGHOUT THE VALUE CHAIN UPSTREAM MIDSTREAM DOWNSTREAM EXPLORATION E&P OIL PIPELINE GAS PIPELINE LNG Paraguay Egypt, Algeria, Bulgaria Chad, Cameroon Nigeria Peru Turkey Peru President Energy Petroceltic ExxonMobil Seven Energy Peru LNG IZGAZ Calidda $24,000,000 $100,000,000 $200,000,000 $105,000,000 $300,000,000 $51,000,000 $50,000,000 Equity Investment Senior Loan Senior Loan & Syndication Equity Investment Syndicated Project Financing Senior Term Loan Junior & Senior Term Loans Investor (with AMC) Lender Lender Lender April 2014 June 2007 June 2009 March 2010 GAS DISTRIBUTION Mandated Lead Arranger Investor December 2013 April 2013 June 2001 LONG-TERM COMPETITIVE FINANCING One stop shop for full range of financing instruments › Private placement in listed equities › Traditional private equity › Asset level farm-ins › Typically 5-20% shareholding › Not just financial investor, adding to shareholder value › Subordinated loans › Income participating loans › Convertibles, preferred shares › Fixed and floating rates › Corporate loans - Reserve based lending, Straight corporate debt, Partial credit guarantees for bonds › Long-term project finance - Greenfield, Expansion › Mobilization of funds from other lenders and investors, through financings, syndications, underwritings and guarantees 10 › Local currencies › Up to 20-year maturity COUNTRY RISK MANAGEMENT CAPABILITIES World Bank synergies Strong government relations Country Risk Withholding tax benefit Mitigation Reduced risk of expropriation 15 Reduced risk of breach of contract, convertibility Best practice tools in E&S risk management  Ensure smooth and continuous operations HELP TO IMPROVE THE BOTTOM LINE PERFORMANCE STANDARDS  Maximize local development benefits fosters good neighborly relations  Raise project’s acceptance locally and with governments through good corporate citizenship  Optimize resource management (water, energy, etc.)  Create reliable and cost effective supply chains  Attract top talent both locally and internationally   Enhance company brand value to investors Pollution prevention  Cleaner production  Socioeconomic / workplace / labor issues IFC’S IN-HOUSE ENVIRONMENTAL AND SOCIAL SPECIALISTS ASSIST CLIENTS WITH:  Land acquisition / resettlement / compensation 16  Indigenous people  Biodiversity  Community development & consultation  Cultural property  Impact assessments  E&S management systems  Health & safety  HIV / AIDS Select IFC Oil & Gas Investments KUWAIT ENERGY Ifc’S TRUSTED BRAND ATTRACTS CAPITAL IN RISKY MARKETS Kuwait Energy is the largest privately-owned E&P company in Kuwait with Selected Key Investment Risks: assets in Egypt, Yemen, Oman and Iraq  uncertainty around the near-term behavior of oil prices led to investor discomfort, leading IFC to step in to fill the vacuum In 2009, IFC provided Kuwait Energy (KEC) with an innovative Sharia compliant US$50 million financing package at a time when commercial banks had limited liquidity The package consisted of a US$35 million reserve-based loan and a US$15 million income participation loan IFC also actively assisted KEC with Commodity price risk: Following the sharp decline in oil prices in the second half of 2008, oil prices in 2009 experienced high volatility Given that backdrop,  Country and political risk: Due to the volatility of the political regimes in some countries in which KEC operates, there is risk that a change in government may result in losing licenses issued by previous governments or the enactment of other obstacles of doing business This was highlighted during the Arab Spring events IFC continued to fund the company during these times corporate governance and environmental and social issues Due to the risks above, among others, investors were relying on IFC participation to provide confidence and comfort in the company and the investment IFC’s ability to deliver results led KEC to seek IFC’s further partnership In 2010, KEC invited IFC to participate in a pre-IPO private placement as an Summary of IFC Engagement with KEC: Net Production anchor investor KEC was expecting to raise US$50 million equity from IFC and an additional US$50 million from other investors IFC’s participation was seen by potential new investors as key in demonstrating confidence in the company’s growth potential In 2012, following the Arab Spring and with limited appetite from international commercial banks for Middle Eastern risk, IFC again provided the company a  2008 – First engagement with IFC IFC provides Corporate Governance  4,630 boepd  9,364 boepd  12,798 boepd  15,018 boepd  24,921 boepd advice US$165 million reserve based loan alongside Deutsche Bank  2009 – Following the global financial crisis, IFC provides KEC the first ever Shariah compliant RBL and income participation facility  First ever Shariah compliant RBL 2010 – IFC’s participation in equity round as anchor investor allows KEC to raise US$100 million in midst of Arab Spring  2012 – IFC and Deutsche Bank’s US$165 million RBL for KEC wins Project Finance’s Middle East Upstream Deal of the Year  2014 – IFC continues to provide corporate governance advice ahead of potential IPO 18 KOSMOS ENERGY AND THE JUBILEE OIL FIELD ifc structures Innovative Solutions to fit client needs Kosmos Group is privately held and owns growing oil and gas exploration companies focused on West Africa Kosmos is the partner with the second largest share in the Jubilee project In 2009, IFC provided Kosmos Energy with US$100 million loan as part of a US$750 million reserve-based lending facility The proceeds of the RBL were used for the first phase of development of the Jubilee oil field, Ghana’s first oil production project IFC took on an important leadership role in negotiating and structuring the transaction IFC was essential in converting the financing into a multi-tranche (bridge / senior / junior stand-by / junior overrun) facility that closely met the needs of the borrower Additionally, IFC made a key contribution to the investment, facilitating discussions with the Government of Ghana, allowing the company to obtain requisite consents to put the loan facility in place When Kosmos took on a second RBL, IFC was happy to continue its support of the company and the Jubilee project by participating in the new US$2.0 billion facility This second IFC investment, a US$100 million senior loan in 2011, supported an expansion of the Jubilee field as well as the development of new fields in Ghana The Kosmos financing was awarded Deal of the Year 2009 by Project Finance Magazine and Project Finance International Magazine in the African Oil and gas category IFC further supported the Jubilee project, investing in the partner with the largest share in the field: Tullow Oil In 2009, Tullow raised a US$2.0 billion reserve-based lending facility to refinance outstanding commercial bank debt with the remaining proceeds going towards its portion of Phase of the Jubilee project IFC invested US$115 million in the facility IFC invested an additional US$50 million in 2011 when Tullow increased its RBL to US$3.5 billion to fund continued capital expenditure needs In 2012, Tullow refinanced its existing RBL facility, requesting IFC to refinance its US$165 million investment as both the company and the other investors valued IFC’s involvement 19 GEOPARK LIMITED ifc forms long-term partnerships with its clients GeoPark is a growing Latin American oil and gas company with operations in Chile, Colombia, Brazil, Peru, and Argentina February 2006: IFC invested US$10 million in early-stage equity (pre-IPO) in GeoPark Limited, a junior independent ark oP Ge exploration and production company with limited production focused on development of marginal oil and gas reserves in gro wth dev and p elo nt me Argentina and Chile May 2006: GeoPark was listed on the AIM market of the London Stock Exchange December 2006: IFC disbursed a US$20 million loan to GeoPark This capital was used to expand operations By year-end 2006, GeoPark had established itself as the first private oil and gas operator in Chile 2008: IFC helped facilitate a gas pre-sale financing agreement for US$40 million with Methanex, a methanol producer in Chile Methanex was looking to pre-order stable gas off-take, which enabled GeoPark to accelerate its Fell Block debt 338 35 2008-9: IFC participated in additional equity rights issues, the proceeds of which helped GeoPark to further expand February 2014: GeoPark was listed on the New York Stock Exchange under ‘GPRK’ Although GeoPark has now achieved financial independence, the company continues to seek IFC’s advice on topics ranging (US $ million) block in Chile (has since been divested) 45 00 00 20 13 bo e p d) 2011: IFC acquired 12.5% working interest in the GeoPark-operated unincorporated joint venture in the Otway exploration P r o d u c t i o n ( t h o u s Ne a n d t Re ve nue operations from expansion into challenging markets to how to devise a environmental and social action plan for maximum development impact 13.5 1.4 0 0 13 2P Re s e rve s (mmboe ) 61.6 20 29 16 00 42 20 09 20 13 Delonex Energy Limited With its knowledge and resources, ifc supports its clients at every critical juncture Delonex Energy Limited is an early-stage E&P company that seeks to build a portfolio of East and Central African oil and gas assets The portfolio will be built up through acquisitions, farm-ins, and direct awards from host governments In January 2013, IFC approved an equity investment of up to US$60 million in Delonex IFC’s investment is part of a US$600 million equity line that will be disbursed as needed based on the company’s achievements As a start-up company, Delonex has no producing assets, and as such, needed to offer a unique investment product to raise capital at favorable terms IFC played a key role in structuring such a product In addition to helping structure a tailor-made product, IFC provides additional added value to Delonex as well Because Delonex is new E&P company in the frontier East and Central Africa region, IFC’s participation provides political risk mitigation comfort to the company to its investors Delonex intends to enter countries including Ethiopia, South Sudan, Madagascar, Mozambique, Tanzania, Kenya, Uganda, and Chad With IFC as its partner, Delonex is able to tap IFC’s knowledge of and experience in investing in these risky countries Additionally, a long-term partnership with IFC will provide support for Delonex’s future growth plans through additional equity and/or debt Delonex views IFC as a key resource in its efforts to implement robust environmental and social standards and corporate governance policies in its operations 21 IFC Oil & Gas Track Record DIVERSIFIED COMMITTED $2.2 BILLION OIL & GAS PORTFOLIO 52 projects in over 30 countries (June 30, 2014) BY PRODUCT BY REGION WORLD; $0 SOUTHERN & EASTERN EUROPE; $0 SUB- SAHARAN AFRICA; $0 EQUITY*; $0 LATIN AMERICA; $0 ASIA; $0 SENIOR DEBT & EQUIVALENTS; $1 MIDDLE EAST & NORTH AFRICA; $0 23 *Equity at market value Selected investments: LATIN AMERICA Colombia Colombia Paraguay Colombia Pacific Midstream President Energy Infrastructure Colombia Argentina PetroNova Medanito Pacific EXMAR LNG $240,000,000 Syndicated Project $380,000,000 Equity $24,000,000 Equity Investment $150,000,000 Equity Investment $30,000,000 Equity Investment Equity Investment Investment and AMC Mobilization Mandated Lead Arranger Lead Equity Investor Investor Investor (with AMC) Investor (with AMC) Investor (with AMC) Ongoing December 2014 December 2013 December 2013 September 2012 July 2011 Brazil Argentina Peru Peru Peru Argentina Constellation Pan American Overseas $103,000,000 Equity Investment CAPSA $60,000,000 BPZ Energy Corporate Facility $75,900,000 Convertible Notes, Maple Energy $10,000,000 Equity Investment Reserve-Based Facility & Equity 24 $48,000,000 Financing Peru LNG $300,000,000 Syndicated Project Energy $550,000,000 Financing Corporate Loan Syndicated Investor Lender Investor & Lender Investor Lender Mandated Lead Arranger April 2010 December 2009 2006 - 2009 July 2007 June 2007 June 2007 Selected investments: AFRICA Nigeria Nigeria Gabon Africa Region Cote d’Ivoire Seven Energy Seven Energy VAALCO Delonex Energy Rialto Energy $50,000,000 High Yield Bond $105,000,000 Equity Investment $65,000,000 Reserve-Based Loan $60,000,000 Equity Investment $20,000,000 Equity Investment Facility Investor Investor (with AMC) Lender Investor Investor (with AMC) October 2014 April 2014 January 2014 November 2013 January 2012 Ghana Ghana Gabon Africa Region Mozambique Kosmos Energy Tullow Oil VAALCO Afren ENH Mozambique $100,000,000 25 Senior Loan $165,000,000 Senior Loan $40,000,000 Revolving Credit Facility $1,000,000 Equity Investment $18,500,000 Equity Investment Mandated Lead Arranger Mandated Lead Arranger Lender Investor Investor 2009, 2012 2009, 2011 January 2005 April 2005 February 2004 Selected investments: EUROPE / MENA Turkey Egypt, Algeria, Bulgaria Albania Tunisia TransAtlantic Petroceltic Bankers Petroleum Candax Energy $80,000,000 Reserve-Based Lending Senior Loan $67,000,000 Senior Loan & Equity $10,000,000 Equity Investment Mandated Lead Arranger Mandated Lead Arranger Investor & Lender Investor & Lender May 2014 April 2013 2009, 2012, 2013 January 2012 Kuwait Tunisia Egypt Kuwait Energy Topic Melrose Resources $165,000,000 26 $100,000,000 Senior Loan $40,000,000 Revolving Credit Facility $1,000,000 Seed Equity Investment Investor Investor & Lender Investor 2009, 2011, 2012 October 2008 November 2006 Selected investments: ASIA China Thailand & Indonesia India Thailand & Indonesia ENN Energy Salamander Energy Cairn Energy Salamander Farm-In $75,000,000 Senior Loan $117,500,000 Senior Revolving Credit Facility & Junior Term Loan $271,000,000 Credit Facility & Equity $25,000,000 Equity Investment Investment Mandated Lead Arranger & Investor Lender 2013 2008, 2009, 2011 India Vietnam Punj Upstream SOCO $30,000,000 27 Investor Mandated Lead Arranger Debt / Equity Financing $45,000,000 Credit Facility Investor & Lender Lender September 2008 September 2005 2007, 2009 January 2009 Selected investments: gas / lng China Dom Republic Peru Turkey India ENN Energy Linea Clave Calidda IZGAZ GSPC Gas $75,000,000 Senior Loan $5,000,000 Junior Term Loan $50,000,000 Junior & Senior Term $51,000,000 Senior Term Loan $15,000,000 Equity Investment Loans Mandated Lead Arranger Lender Lender Lender Investor 2013 January 2010 March 2010 June 2009 September 2008 India Peru India Romania Colombia GSPL Peru LNG Petronet LNG DistrigazSud Promigas $89,000,000 Equity Investment & Term Loan 28 $300,000,000 Syndicated Project Financing $150,000,000 Syndicated Corporate €49,000,000 Equity Investment $50,000,000 Credit Facility Loan Investor & Lender Lender Lender Investor Lender October 2007 January 2007 April 2007 February 2006 December 2005 IFC Oil & Gas: global coverage GLOBAL OIL & GAS Lance Crist Global Head Washington, DC +1 202 473 0773 lcrist@ifc.org Olivier Mussat Chief Investment Officer Washington, DC +1 202 458 0244 omussat@ifc.org Haran Sivam Principal Investment Officer Washington, DC +1 202 473 4591 hsivam@ifc.org Jorge Bongiovanni Principal Engineer Washington, DC +1 202 458 1796 kolsen@ifc.org Didier Savary Principal Engineer London, UK +1 202 580 8410 dsavary@ifc.org Ignacio de Calonje Principal Investment Officer London, UK +44 207 542 8400 idecalonje@ifc.org Karsten Fuelster Principal Investment Officer Istanbul, Turkey +90 212 385 2550 kfuelster@ifc.org Senior Investment Officer Lima, Peru +51 1611 2568 amalpartida@ifc.org Principal Investment Officer Washington, DC +1 202 473 3679 msheng@ifc.org EUROPE / MENA / AFRICA LATIN AMERICA Aldo Malpartida ASIA Michael Sheng 29