Lenders Technical Advisory | Case Two

Client: Multinational Bank

Description

BE&R has been providing its technical expertise and advisory support services to several banks “Lenders’’ in Asia Pacific.  Third party technical expert reviews are required by the banks before lending money to the borrower. BE&R reviewed the documents/information available to the lender on the design and technical specifications of an FPSO (Floating Storage Production and Offloading). BE&R reviewed the project estimates, adequacy of the contingencies allowed for, areas of cost risks, project execution plan, and schedule for the FPSO to be constructed in South East Asia and operate in Australia.

Challenge

The investment bank was looking to acquire a stake in the FPSO to be used in Australia and to support the acquisition, due diligence of the technical and non-technical documents was required. The uncertainty around the timeline for fixing major contract pricing, completeness of project estimates, EPC cost estimate risks were some of the areas required to be vetted before FPSO goes into the construction phase.

Solution

BE&R personnel with our strong heritage and experience in FPSO design, fabrication, commissioning and handover were utilized to review documentation, question the contractor and opine on any items of concern. The detailed assessment of project execution plan, CAPEX, schedule and FPSO functional areas (hull, topsides and turret mooring system) was taken to ascertain any omissions or underestimates. Moreover, the risks associated with engineering definition and execution plan listed above requiring continuous monitoring were identified and suitable recommendations to mitigate those risks were provided.