PROJECT FINANCING USING RESERVED BASED LENDING (RBL) METHOD FOR BINTA WORKING AREA
Oil and gas industry’s condition is declining significantly because of oil price reduction. Oil and gas company must adapt with this situation so they doing more cut cost like work termination and delay project development. As a result of global oil price declining, most oil and gas Company, includi...
Saved in:
| Main Author: | |
|---|---|
| Format: | Theses |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/35751 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | Oil and gas industry’s condition is declining significantly because of oil price reduction. Oil and gas company must adapt with this situation so they doing more cut cost like work termination and delay project development. As a result of global oil price declining, most oil and gas Company, including PT Prima Megah Energi holding oil & gas company, are experiencing financial difficulty as well as negative growth rate. Generally, oil and gas company funding for project or to acquire new block come from shareholder investment or bank loan. Oil and gas industry is high-risk business because their development always has probability to profit or loss.
This research is about PT Prima Megah Energi strategy to focus develop subsidiaries that producing gas and the scheme of funding. When oil price still $100/bbl PT Prima Megah Energi developing strategy focus on subsidiaries that producing oil because it can maximize company’s income. Since 2014 until 2018 oil price have ups and downs condition, PT Prima Megah Energi decide to maintain company’s revenue with develop subsidiaries that producing gas because gas price stable following gas sales agreement. PT Prima Megah Energi holding choose PME BINTA that producing gas for next development to maintain production and company revenue through Plan on Further Development (POFD) project. For this reason, company must do refinancing to fund project POFD.
PT Prima Megah Energi has subsidiary that producing gas so they don’t affected by declining oil price condition. This subsidiary named PME BINTA. Because of high level risk business in oil and gas industry and PME BINTA doesn’t have asset that value bigger than previous loan so bank provide innovation scheme of loan submission that is Reserve Based Lending (RBL) method. RBL method make bank feel more secure because amount of loan determined use Company’s cash flow performance and bank will do redetermination every 6 month to review company’s performance. For company like PME BINTA that doesn’t have big asset, it also has advantage within process loan request. PME BINTA only need provide forecast entitlement that reflect gas sales agreement that they have until loan end date based on reserve tail calculation. RBL system can help PT Prima Megah Energi to funding POFD project. |
|---|