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Barclays unit wins big power deal

London, February 19, 2011

Barclays Corporate’s oil and gas team recently signed a multi-million dollar contract for the construction of a power plant with Wood Group, a global leader in oil and gas engineering.

The deal with Wood Group sees Barclays Corporate lead three banks in supplying $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.

“Wood Group is one of our largest clients in Scotland and this latest deal further cements our relationship with the oil services company,” said Walter Cumming, head of the oil and gas team at Barclays Corporate.

“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,” Cumming added.

“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,” he concluded.

With this contract, the oil and gas team has provided around $1 billion in new deals in 2010, a statement said.

Barclays Corporate provides integrated banking solutions to businesses with an annual turnover of more than GBP5 million ($8.12 million) or its currency equivalent. – TradeArabia News Service




Tags: London | oil and gas | Barclays | power plant | Wood Group |

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