DLA Piper, Arnold & Porter and Milbank have advised on a landmark Japanese investment into Venezuela’s national oil company, Petroleos de Venezuela (PDVSA) valued at US$1.5bn – an important move as Japan seeks to diversify its energy resources in light of recent interruptions of traditional energy sources domestically.
DLA Piper acted for a consortium of Japanese financial institutions as lenders’ counsel – including Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI), Japan's government-owned financial insurance institution; as well as commercial bank lenders on a US$1.5bn advance pay structured financing facility for PDVSA.
"These transactions are an important part of Japan's strategy for diversification of energy resources and are particularly important at this time when Japan faces new challenges for electric power generation from conventional fuels in the wake of the recent tragic events," DLA Piper lead partner on the deal David Robbins said. "This was a set of parallel transactions involving a back-to-back loan structure secured by multiple oil off-take arrangements. As counsel for JBIC, NEXI and the commercial bank lenders we had to advise on a complex web of issues and manage the coordination of counsel in multiple jurisdictions. Completing the transaction was made possible by the cooperation and good working relationships among counsel and the parties."
The financing relates to two projects in Venezuela – the El Palito Refinery and Puerto La Cruz Refinery projects – and will be secured by revenues from long-term off-take agreements for oil and oil products by Japanese trading houses led by ITOCHU Corporation and Mitsubishi Corporation.
The trading houses were represented by Milbank, Tweed, Hadley & McCloy and PDVSA was represented by Arnold & Porter. Venezuelan counsel for the senior lenders was Caracas based D'Empaire Reyna Abogados, led by partner Carlos Omana while Rodriguez & Mendoza represented the trading houses.ALB
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