8th Africa Oil and Gas, Trade and Finance Conference Marrakech, 26-30 April 2004

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8th Africa Oil and Gas, Trade and Finance
ConferenceMarrakech, 26-30 April 2004
NOT AN OFFICIAL UNCTAD RECORD

• APICORPs
• Experience Outlook
• Nicolas Thévenot
• Manager Project Finance
• North Africa and the Mediterranean
• Arab Petroleum Investments Corporation
• www.apicorp-arabia.com

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1 Outline of presentation

• Part I Experience
• APICORPs profile
• What changes have affected our activity
• and our performance?
• Part II Outlook
• Capital investment requirements
• Financing challenges
• APICORPs responses
• Conclusions

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2 APICORPs profile

• Mandate
• Status
• Specialization
• Competencies
• Capital
• Assets

• Direct investment and financing of petroleum
  projects in the Arab world
• Government-owned but commercially oriented
• oil, gas, petrochemicals and power
• Project finance, trade finance, equity
  investments, advisory
• US550 million
• US2.1 billion
• 2/3 project-oriented

APICORPs shareholders are Algeria, Bahrain,
Egypt, Iraq, Kuwait, Libya, Qatar, Saudi Arabia,
Syria and the UAE
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3 What changes have affected our activity

• Shifting role of governments and greater
  participation of private sector
• Rise of new gas producers/exporters (Qatar,
  Egypt, etc.)
• New structures and trends in the downstream
  industry
• RESULTING IN
• 11-fold increase in our assets since inception
• A boost in project finance
• Expansion of trade finance
• Participation in the financing of power
  generation
• Development of financial advisory

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4 and our performance?

• increasing volatility of oil prices
• Declining world interest rates

Source APICORP
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5 Looking Forward

• Arab oil is expected to gain a bigger share of
  world output
• Arab gas will continue to be supported by
  downstream industries and new export schemes

Source OAPEC, OPEC and IEA
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6 Future investment opportunities
5-year oil, gas petrochemicals and power
investments US 150 bn

• The region will require more investments than in
  the past
• US24 bn/year for the hydrocarbon sector
• US6bn/year for power
• Governments role will become less
• More Concessions, PSAs and JVs upstream
• Increasing JVs and direct investments downstream

Source APICORP
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7 Financing requirements

• Provided oil prices are high enough, equity will
  continue to be self-financed
• Traditional sources (local regional banks
  international banks, multilaterals ECAs) may
  not be sufficient to meet debt requirements
• Additional sources will involve
• Islamic institutions financing
• Further development of capital markets (stocks
  and bonds)

5-year Equity Debt Requirements
Source APICORP
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8 APICORPs responses

• To help meet increasing investment financing we
  have reformulated our strategy
• Expand the range of our financial services
• Loans
• Direct equity
• Financial advisory
• Support financing of the private sector

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9 Adding to the momentum in North Africa

• The oil and gas dimension of North Africa is
  being strengthened by
• The implementation of new policy measures aimed
  at attracting investments and private capital in
  the energy sector
• The revitalization of the Barcelona Process and
  the adoption of specific measures to fund key
  energy projects
• An increasing role and involvement of the EIB
  (through FEMIP) and European ECAs in the
  southern flank of the Mediterranean
• In this context, we are increasing our
  commitment to the region and adding to the
  momentum
• FEMIP EIBs Facility for Euro-Mediterranean
  Investment and Partnership

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10 Conclusions

• The key challenge facing us is heightened by
  larger hydrocarbon investment requirements than
  in the past
• Financing will be more critical as the power
  sector is factored in and the burden shifted to
  the private sector
• This challenge is more acute in North Africa
  where a boost in upstream activities will need
  more equity funding
• We believe our experience and expertise make us
  the partner of choice for the development of the
  Arab oil, gas and downstream industries