International law firm Milbank, Tweed, Hadley & McCloy LLP, led by partner Dan Bartfeld and associates James Orme, Timothy Fitzpatrick and Jeffrey Leider, represented the Japanese trading houses ITOCHU Corporation, Marubeni Corporation and Mitsui & Co., Ltd., in the $750 million financing to Venezuelan state oil company Petróleo de Venezuela S.A. (“PDVSA”) for the expansion of the El Palito oil refinery, and Mitsubishi Corporation in the $750 million loan facility to PDVSA for the expansion of the Puerto La Cruz oil refinery. PDVSA will use the total $1.5 billion loan for production expansion at the two oil refineries over the next three years. The 15-year loan includes the ability of the trading houses to offtake significant quantities of crude oil and other petroleum products into Japan. The lender consortium for both loan facilities included the Japan Bank for International Cooperation (“JBIC”) and a wide range of other Japanese banks insured by Nippon Export and Investment Insurance (“NEXI”).
“This transaction will contribute significantly to the diversification of Japan’s energy supplies, and signifies another example of the trading houses expanding their oil and gas businesses in Latin America,” said Mr. Bartfeld. “We are honored that clients like Mitsubishi, Itochu, Marubeni and Mitsui turned to us for their most important transactions.”
The loan to PDVSA is expected to expand processing at the El Palito refinery from 140,000 barrels a day to 280,000 barrels a day, and the Puerto La Cruz refinery is expected to be upgraded to process 210,000 barrels a day from 180,000 barrels a day. The upgrades are expected to commence at the end of this year and will be completed by 2015.
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