International Finance Corporation (IFC), UK Export Finance (UKEF) and a commercial bank group led by HSBC, ING, Société Générale and Standard Chartered Bank acted as lenders on the financing of Vitol’s participation in the Offshore Cape Three Points (OCTP) oil and gas field project involving the development of the Sankofa-Gye Nyame fields in Ghana.
Milbank, Tweed, Hadley & McCloy LLP advised the lenders of the project just mentioned. Gas from the project is expected to help generate 1,100 MW of additional electricity, providing enough gas to power Ghana’s thermal power operation for more than 15 years.
The US$7.9 billion scheme represents the largest-ever foreign direct investment into Ghana. The World Bank put in place US$500 million of backstop guarantees, bringing in the International Development Association (IDA), International Finance Corporation (IFC) and MIGA for its largest single project investment.
This is the first upstream oil and gas financing in Ghana of this kind, and is UKEF’s largest direct loan to date.
The cross-practice Milbank team was led by London partner John Dewar. Mr. Dewar commented:
“We are delighted to have advised this prestigious group of lenders on this groundbreaking project. Our role on this deal is a testament to our team’s ability to work on cutting edge and 'first-of-a-kind' financings in Africa and globally.”
The financing has already won significant recognition in industry circles having just been named as “African Oil and Gas Deal of the Year” by Project Finance International magazine.
The OCTP block is a large deepwater block located 55 to 60 km offshore in the Western Region of Ghana, with estimated discovered reserves of 132 million barrels of oil and 1,079 billion cubic feet of gas.
The project encompasses the development of the Sankofa East oil field, with first oil production planned for 2017; and the development of non-associated gas in the Sankofa and Gye Nyame fields, with first gas production planned for 2018.