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One reason why I've been working on offshore windfarms is that this is a new, and thus poorly understood, sector, so most banks are not yet interested.

But I consider that these kinds of risks is where you have value added in being a pioneer; it takes a bit more work to understand what you're doing, but you actually make ot more money for what ends up being a reasonably transaction; whereas in transactions in the onshore sector, the risks are well known - but now in most cases wildly excessive from a sane banker's perspective.

Of course, once we show that it can be done, there will be a rush by other banks.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Nov 30th, 2006 at 06:07:56 AM EST
This is all nice and good, but what about Oil&gas finance ? I may have lost track of the financing structures, but my recollection was that they were also pretty aggressive as were the terms imposed on countries who have no other choice for exploiting their resources than teaming up with "Majors" such as BP, all this to receive a meagre share of the profits

When through hell, just keep going. W. Churchill
by Agnes a Paris on Thu Nov 30th, 2006 at 07:05:47 AM EST
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It's the other way around, isn't it? The third world governments control 75 % of all the oil fields and the majors are happy if they manage to siphon of 10-20 % of the profits.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Nov 30th, 2006 at 07:45:02 AM EST
[ Parent ]

countries who have no other choice for exploiting their resources than teaming up with "Majors" such as BP, all this to receive a meagre share of the profits

It's the other way round. The biggest problem of the majors is that they are welcome in so few countries these days that those that are willing to work with them can pretty much call the shots and set the terms (or improve further the terms set in earlier years). Host countries typically get 90% of the marginal revenues these days.

As to the aggressiveness of financial structures, it never got too bad, apart for pricing, which is a lesser problem. And now that the sector is so rich anyway, operations have all but dried up.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Nov 30th, 2006 at 09:30:54 AM EST
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Okay, point taken. So "poor" Majors manage to get only 10% ? Wonder why they rank among the very small number of corporations boasting a AA to AAA credit rating. <s>

When through hell, just keep going. W. Churchill
by Agnes a Paris on Thu Nov 30th, 2006 at 10:56:27 AM EST
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Just for the record, the aggressive structures (mini perm and hence huge refinancing risk) now prevailing in the real toll road financing schemes are directly inspired of the merchant power transactions so notorious a few years ago.

When through hell, just keep going. W. Churchill
by Agnes a Paris on Thu Nov 30th, 2006 at 07:20:26 AM EST
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