The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Yong Hwan Kim, “Korea Eximbank”) announced on November 23 that it provided USD 250 million* in reserve-based financing (RBF) for an oil/gas field development project in Texas, USA, undertaken by a Korean company.
* USD 151 million in loan, USD 99 million in guarantee

Samsung C&T Corporation, the owner of this project, plans to develop 8 oilfields and 2 gas fields (total reserves: 61.9 million barrels) in Texas through its local subsidiary Parallel Petroleum LLC, acquired in 2011.

Reserve-based financing (RBF) is a sophisticated financing technique that requires much experience and expertise, involving the analysis of reserves, price prediction and estimation of the operating cost of the oil/gas field.

According to Korea Eximbank, the significance of this project lies in the fact that it employed a sophisticated financing technique to support the development of natural resources overseas by a Korean company and thereby boosted Korea’s energy self-sufficiency ratio.

Korea Eximbank and Korea Development Bank had pioneered the use of RBF in September last year when they co-financed the acquisition of a gas field in the US by applying the technique for the first time in Korea.

A Korea Eximbank official stated, “The RBF technique diversified the means by which Korean firms can finance the development of overseas resources. We will continue to explore new and better ways to support the global expansion of Korean firms”