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Hogan Lovells Advises PDVSA on US$1 Billion Financing Deal with Russian Bank

03 December 2013

CARACAS, 3 December 2013 – Hogan Lovells advised Venezuela’s state oil company Petroleos de Venezuela (PDVSA) in its US$1 billion loan transaction from Russia's Gazprombank.

The eight-year loan, which was finalized on 28 November, will go towards expanding infrastructure and increasing production at the Petrozamora oil project to 104,000 barrels per day from 63,000 currently. Funds from the deal are expected to become available in January 2014.

The Hogan Lovells cross-border team was led by Caracas partner Bruno Ciuffetelli, and included Washington, D.C. partner Keith Larson, London counsel Nick Tidham, Caracas counsel Juan Pondal, along with London associates Erica Valli and Nathan Buckley.

Additionally, Hogan Lovells’ Moscow office provided valuable support during the negotiation process, where bilingual (Russian-Spanish) finance associate Oleg Gritsenko regularly works on our transactions involving Russia and Latin America.

The closing of this transaction follows a number of recent significant deals in Latin American in which Hogan Lovells lawyers have been involved.

  • In a transaction that closed on 13 November 2013, represented PDVSA in a US$4.5 billion bond issuance of which US$1.5 billion was offered through direct and private placement with the Central Bank of Venezuela, and the remaining US$3 billion was issued to PDVSA suppliers. The funds will be used for general corporate purposes and to finance investment projects by PDVSA.
  • In a transaction that closed on 29 October 2013, Hogan Lovells advised Corporación Eléctrica del Ecuador (CELEC), the state-owned energy company in Ecuador, on its US$195.2m term loan facility provided by Eximbank of Russia to finance the construction by Inter RAO UES of the 187MW Termogas Machala Combined-Cycle Project in El Oro, Ecuador.
  • In a deal that closed on 23 September 2013, advised PDVSA in connection with the US$834.6m site preparation procurement and construction of the Puerto La Cruz Refinery Deep Conversion Project with Wison Engineering as EPC contractor and Industrial and Commercial Bank of China (ICBC) as main lender.
  • In a transaction that closed on 22 September 2013, Hogan Lovells advised PDVSA in its US$391m loan from the Export Import Bank of China for the construction of the Morón maritime terminal, which will be responsible for exporting urea and ammonia on behalf of Pequiven.
  • In a transaction that closed on 22 September 2013, advised Empresa Nacional de Energía Eléctrica (ENEE), the state-owned energy company in Honduras, in the US$298m financing from ICBC for the final phase of construction of the 104MW Patuca III hydroelectric generation project.
  • In a deal that closed on 31 July 2013, Hogan Lovells represented The Republic of Ecuador in connection with its US$298.9m loan from Bank of China Limited and Deutsche Bank (China) Co., Ltd. for the development of the Cañar Naranjal flood control project.
  • In a transaction that closed 15 April 2013, Hogan Lovells advised the Republic of Ecuador in the negotiation of a US$313 million facility agreement between the Export-Import Bank of China (Chexim) and the Ministry of Finance of Ecuador for the construction of the 270 MW Minas-San Francisco hydroelectric generation project.
  • In a deal that closed on 22 February 2013, Hogan Lovells advised the Republic of Ecuador in the execution of a US$85 million concessional loan agreement, granted by the Export-Import Bank of China, which will be used to finance the extension of the Simon Bolivar Highway, and will connect the country’s capital city of Quito to the newly-opened Mariscal Sucre International Airport.
  • In a transaction that closed on 20 December 2012, Hogan Lovells advised the Republic of Ecuador on an eight-year, dual-currency US$/RMB loan from the China Development Bank (CDB) for approximately US$2 billion. In connection with the loan agreement, PetroEcuador entered into sales and purchase contracts of crude oil with PetroChina and Unipec (a subsidiary of Sinopec). This was the third line of credit from CDB to Ecuador since 2010, for an approximate of US$5 billion.

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