1. How should PDVSA finance the development of the Orinoco Basin? Define the Project finance. Is Petrozuata a project?
2. What are the costs and benefits of using Project Finance?
3. What are the major risks associated with the project and how they are handled? Who would bear these risks if the project were financed internally by PDVSA instead?
4. How much debt should have Petrozuata? How interest coverage and leverage TIR affect the project?.
5. Why the promoters want to issue bonds for the project under Rule 144A?
6. Will project bonds receive an investment grade rating? What is the “weakest link” in the project?
7. As one of the sponsors, what are your expected returns? Please assume the asset beta for an integrated drilling, pipeline and refining firm is 0.60.
8. What kind of sensitivity/scenario analysis would you do to verify the project’s economics?
9. Would you invest in project bonds? Would you invest equity capital as Conoco?
10. How should PDVSA finance its other oil field projects?
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