With lower crude prices and abundant world supply, pre-export financing (PXF) is an increasing attractive option for state-owned oil companies in the Arabian Gulf, Zawya reports.
Oil companies in the region, most notable Petroleum Development Oman and Oman Oil, have used PXF loans to raise funds, according to the news agency.
“We are seeing a change. A lot of the national oil companies are looking at pre-export financing structures and, beyond Oman, we are working with some of our clients in the region on that,” Sunil Veetil, an official at HSBC, said, Zawya reports
With crude flooding the global market, sellers have proven more willing to take on long-term delivery contracts to ensure market share, according to Zawya. These contracts are then used as collateral for PXF loans.
In addition to PXF loans, regional oil companies have also begun to explore partial public offerings, traditional bonds, and Islamic bonds as a way to increase cash flow, the news agency reports.
Abu Dhabi National Oil Company (ADNOC) has recently raised funds through a bond offering and is preparing to float a partial initial public offering (IPO) in December.