Nigerian energy company Shoreline has no plans to tap international capital markets until oil prices rise back above $60 per barrel, Chairman Kola Karim said on Friday.
Shoreline had initially planned to issue a dollar-denominated bond following a roadshow in late 2015, Karim told Reuters on the sidelines of an investment conference.
"We were out in the market then to do up to $500 million, but right now the world has changed, it is a different place," Karim said.
"It is all down to just circumstances - if oil prices move in the right direction, the Niger Delta issue is resolved, we see three to six months of consistent performance then...it is a believable story to investors."
Global benchmark Brent crude futures were trading around $51 a barrel on Friday. Prices have more than halved since peaks hit in mid-2014.
Since the oil price began to fall, Karim said his company had turned increasingly to pre-finance deals with oil trading houses which are able to give cash in advance in exchange for repayment with interest as well as with access to physical cargoes of oil.
He said they were looking at "a good number" of Shoreline's financing to come from pre-financing, and that the company is in the process of negotiating new pre-financing arrangements. Trading houses told the Reuters Commodities Summit this month they are actively pursuing lending.
"We're talking to different parties, who are offering different structures," Karim said. The oil price situation, he said, "is forcing everyone to think differently on how to finance these transactions."
(C) Reuters News
"We were out in the market then to do up to $500 million, but right now the world has changed, it is a different place," Karim said.
"It is all down to just circumstances - if oil prices move in the right direction, the Niger Delta issue is resolved, we see three to six months of consistent performance then...it is a believable story to investors."
Global benchmark Brent crude futures were trading around $51 a barrel on Friday. Prices have more than halved since peaks hit in mid-2014.
Since the oil price began to fall, Karim said his company had turned increasingly to pre-finance deals with oil trading houses which are able to give cash in advance in exchange for repayment with interest as well as with access to physical cargoes of oil.
He said they were looking at "a good number" of Shoreline's financing to come from pre-financing, and that the company is in the process of negotiating new pre-financing arrangements. Trading houses told the Reuters Commodities Summit this month they are actively pursuing lending.
"We're talking to different parties, who are offering different structures," Karim said. The oil price situation, he said, "is forcing everyone to think differently on how to finance these transactions."
(C) Reuters News
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