Lenders Technical Advisory

Client: Multi-national Bank

Description

BE&R resources provided technical expertise and advisory support services to a leading multi-national bank regarding an investment in an FSO (Floating Storage Offloading) destined for the Asia-Pacific region.  BE&R was approached to deliver confidence in the condition of the asset and confirm the FSO was fit for purpose. BE&R reviewed the design and technical specifications of the FSO vessel. Whereby the FSO was evaluated to determine whether it met the requirements to operate within the field and compliance with applicable rules and regulations set by the classification society (Bureau Veritas), and any other applicable maritime organisation or government requirements. In addition, BE&R reviewed the borrower’s EHS (Environment, Health, and Safety) policies set forth by the charterer and the buyer EHS program and advised whether the policies aligned with the market standards.

Challenge

The risk of lending money to the borrower and the increasing number of non-performing assets in the oil and gas sector has changed the way the scrutiny of critical documents is done throughout the world especially in regard to investment banks. Detailed scrutiny is paramount in deciding the ability of borrower to obey the norms and conditions set by the industry standards and their ability to perform the asset under guidelines from the banks and various standard organisations.

A leading investment bank was looking to lend the money to the Floating Storage Offloading (FSO) potential buyer and was required to determine if the proposed FSO was able to perform its function within the given field. The bank required technical oversight of all potential issues and buyer obligations through project phases, representation, and warranty from the seller that the FSO is fit for purpose intended in the engineering, procurement, construction, installation, and commissioning contract. Moreover, the lender wanted to know whether the charterer of the FSO had been complying with the regulatory norms and have been operating and maintaining the vessel to the standard that would support the buyer in maintaining the Vessel’s class certification to all times.

Solution

BE&R through its extensive worldwide experience and in-depth knowledge in providing the lenders with technical advice, reviewed and made advisory recommendations on the list of documents/information available to the buyer to ensure the vessel met the requirements to operate within the field and was fit for purpose. BE&R assessed any material breach that occurred under the terms of the current charter. BE&R reviewed and commented on experience and capabilities of the charterer to fulfil its obligations under the charter.

If you’re interested in drawing on BE&R Consulting’s Lenders Technical Advisory Services, speak to our in-house expert, Mark Evans.