Barclays Corporate’s Oil and Gas team’s latest deal with Wood Group to fund a multi million dollar contract for the construction of a power station ends a busy year for the bank, with the oil and gas team providing around US $1 billion in new deals.

The deal with Wood Group sees Barclays Corporate lead three banks in supplying US $220 million worth of contract bonding facilities over 36 months in relation to the construction of an 800-megawatt gas-fired power station. Barclays Corporate deployed this technique using a master risk participation agreement (MRPA) in a corporate market place, which is designed to spread the risk across a number of banks and simplify the documentation process for the client.

2010 has been a busy year for the Oil and Gas team at Barclays Corporate, the bank has completed a number of deals throughout the world in areas such as US, Asia Pacific, Middle East and UKCS with companies including Acergy, FMC Technologies, Ensco plc and Oil States International. The finance has been used for different activities, for example mergers and acquisitions, abandonment liabilities and corporate funding and includes bonds, revolving credit and term loan facilities.

Walter Cumming, Head of the Oil and Gas team at Barclays Corporate, said: “Wood Group is one of our largest clients in Scotland and this latest deal further cements our relationship with the oil services company. The nature of the deal in particular appealed to Wood Group as from a management perspective, having one bank taking control of the interface with the security agent simplified the process.

“It has been an interesting year for Barclays Corporate. With the oil price set to remain stable or even rise, 2011 will see a slow steady growth and cautious optimism in the sector. We anticipated that the oil price would increase during 2010 and most analysts now predict an oil price rise from 70 to 90 in 2011. We would anticipate this increase in the commodity price will further drive investment, acquisitions and project development as it allows companies to better plan their activities.

“We have witnessed a growing confidence in the market with increased activity levels in mergers and acquisitions which we think is set to continue. We have also noticed that companies are now increasingly prepared to commit to financial transactions and have observed a re-opening of the markets for the right transactions.”

Tags: Barclays Corporate