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Supplement
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Reference no. 9-210-S24
Spanish language
Published by: Harvard Business Publishing
Originally published in: 2012
Version: 4 May 2010
Revision date: 09-May-2019
Length: 17 pages
Data source: Published sources

Abstract

This is a Spanish version. British Petroleum and Amoco were the two largest members of the Azerbaijan International Oil Consortium (AIOC), an 11-firm consortium that was spending USD10 billion to develop oil fields in the Caspian Sea. As of March 1999, AIOC had completed a USD1.9 billion development project known as Early Oil. The two companies, however, had financed their shares of this project in different ways: BP used internal funds (traditional, on-balance sheet corporate finance) while Amoco was one of five AIOC partners that raised USD400 million of project finance. Following the BP/Amoco merger in December 1998, managers in the combined firm's finance group had to reassess the Early Oil financing strategy and determine the best way to finance its share of the USD8 billion Full Field Development Project. Should it use internal funds, project finance, or a mixture of the two?
Location:
Size:
USD68 billion revenues, 100,000 employees
Other setting(s):
1999

About

Abstract

This is a Spanish version. British Petroleum and Amoco were the two largest members of the Azerbaijan International Oil Consortium (AIOC), an 11-firm consortium that was spending USD10 billion to develop oil fields in the Caspian Sea. As of March 1999, AIOC had completed a USD1.9 billion development project known as Early Oil. The two companies, however, had financed their shares of this project in different ways: BP used internal funds (traditional, on-balance sheet corporate finance) while Amoco was one of five AIOC partners that raised USD400 million of project finance. Following the BP/Amoco merger in December 1998, managers in the combined firm's finance group had to reassess the Early Oil financing strategy and determine the best way to finance its share of the USD8 billion Full Field Development Project. Should it use internal funds, project finance, or a mixture of the two?

Settings

Location:
Size:
USD68 billion revenues, 100,000 employees
Other setting(s):
1999

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