Black Gold Drilling LLC

Black Gold Drilling LLC, sponsored by Brazilian conglomerate Grupo Schahin, has closed an $800 million syndicated loan with more than fifteen international financial institutions to finance the development, construction and operation of two semi-submersible drilling platforms that will be built in China and then chartered by Petrobras, Brazil’s state-controlled oil company. The international law firm Milbank, Tweed, Hadley & McCloy LLP, led by partner Dan Bartfeld, represented the lenders in negotiating, structuring and closing the transaction -- which represents one of the largest Brazilian project financings in the oil and gas sector. The lead arrangers were Mizuho Financial Group, Standard Chartered Bank, UniCredit (HVB) and WestLB, and the syndicate included Chinese banks and the IFC.

Mr. Bartfeld commented, “The transaction highlights the liquidity which exists for well structured transactions in the oil and gas sector. This financing is one of the largest Chinese-related loans ever into Latin America, and highlights the fact that Chinese banks (including China Development Bank) will be a reliable source of liquidity for the sector in the future. Our experience working on many Petrobras-related financings gave us an unparalleled understanding of Brazil’s oil and gas industry, and enabled us to work closely with the lead arrangers to develop a structure that met the needs of all parties.”

Roland Estevez, the lead Milbank associate on the transaction, added, “Despite the current volatility in the global credit markets, the success of this transaction proves the resilience of the market for Latin American companies with attractive growth prospects and solid fundamentals.”

In addition to Mr. Bartfeld and Mr. Estevez, the Milbank team representing the lenders included Global Project Finance associates Brian Murarescu and Ari Bessendorf.

About the transaction:
The $800 million project financing was coordinated by mandated lead arrangers (“MLAs”) Mizuho Corporate Bank, UniCredit, Standard Chartered Bank and WestLB with a syndicate of more than fifteen international lenders, which included the International Finance Corporation and China Development Bank. The MLAs also provided interest rate swaps and foreign currency hedging as part of the transaction.

The proceeds of the $800 million loan to the borrower, Black Gold Drilling LLC, will finance the development, construction and operation of two semi-submersible oil and gas platforms, which are designed to operate at water depths of up to 2,000 meters and 2,400 meters, respectively, each with a drilling depth of 7,500 meters below sea level. The rigs are being built by Singapore’s Yantai Raffles Shipyard Company at its shipyard in China, with delivery expected in 2009 and 2010. The oil rigs will be operated under five and seven-year contracts with Petrobras. Schahin won the two-rig contract from Petrobras as part of a Brazilian government-sponsored program to develop its domestic offshore services industry. The total estimated project cost, including interest during the construction period, is estimated at $1.013 billion.

About Milbank

Milbank, Tweed, Hadley & McCloy LLP is a preeminent global law firm that is recognized for more than 140 years for providing innovative legal solutions in many of the world’s largest, most complex, “first-ever” corporate transactions, including capital markets, corporate finance, project finance, acquisition finance and other major fields of law practice. Milbank clients range from prominent multinational financial, industrial and commercial enterprises to governments, institutions and individuals. The firm is headquartered in New York with offices in Beijing, Frankfurt, Hong Kong, London, Los Angeles, Munich, Singapore, Tokyo and Washington, DC.