Kuwait Energy signed a forward sale agreement with Vitol providing it with a financing facility for up to $100m, Reuters reported. The facility will be repaid to Dutch group Vitol via Kuwait Energy’s Iraqi crude entitlement.
Kuwait Energy, an oil and gas exploration and production company, received the first drawdown of $40m late December. Furthermore, the company will spend $80m on developing block 9 in Iraq by bringing more wells on stream and increasing output. The remaining $20m will go towards assets in Egypt, according to Energy Voice.
Kuwait Energy’s CEO, Sara Akbar, said: “This agreement provides the company with a long-term buyer for our Iraqi crude while ensuring the availability of capital to continue the development of Block 9.”
Earlier December, Kuwait Energy was planning to finalize a reserve-based lending (RBL) loan facility. The fund would be used to finance operations in Egypt’s Abu Sennan, Area A, Burg El Arab and East Ras Qattara fields. A company source added that part of the loan proceeds would also be used to support the firm’s capital expenditures at its Block 9 oil asset in Iraq. At the time, it was reported that the company was likely to obtain the financing on a bilateral basis from the European Bank for Reconstruction and Development (EBRD). However, a source at the firm added that other lenders were also being considered.