Smaller drillers face tough financing conditions

All firms are looking for financing, but some will face more difficult times than others

Firms seeking to raise finance for upstream oil and gas projects, whether large or small, face tough times, as lenders adopt a cautious approach. But that does not mean that deals are not getting done – and in the petrochemicals sector, funding conditions are generally much more favourable.  Financing conditions are particularly tough for small and mid-size hydrocarbons producers. They have been hit by the double whammy of needing to augment income from reduced oil sales to maintain capital expenditure programmes, while, at the same time, having to service large bank debts, which were taken out on the basis that they would be paid for with higher revenue streams than the oil price now permit