ANZ has resources for firms to exploit

ANZ’s global head of natural resources Will Rathvon talks with VIR’s Ngoc Linh about the potential of Vietnam’s natural resources and how the bank supports its clients in this industry.

What is ANZ’s role in this deal and how can Vietnam companies effectively mobilise capital inside and outside Vietnam?

ANZ is among seven mandated lead arranger banks and together with other ten banks we have put together this facility of $300 million syndicated loan facility for PetroVietnam Exploration Production Corp (PVEP). We have our own contribution of $30 million to this facility and for the rest we work with PetroVietnam (PVN) to put together from other investment banks. PVN can access international financial markets based on the strength of Vietnam economy, the strength of PVN and PVEP. As they start to borrow from international markets, this is usually a good sign. Financial institutions will be more comfortable with lending to PVN and PVEP and this will likely continue in the future.

How do you see the potential of Vietnam’s natural resources?

From an oil and gas perspective, PVN produces about 500,000 barrels of oil equivalent, two-thirds of that is oil and one-third is natural gas. They will have capital needs of $2 billion per year for exploration and production to continue developing. They’ve so far proven success not only inside Vietnam but also in the international markets. Resources inside Vietnam are very important, but it’s also very important for PVEP to access more oil and gas reserves outside of Vietnam because its production is about a half of the country’s current needs. Production is critical, but petroleum refining is also critical.

There are three major oil refinery projects and PVN is looking to expand and develop them with support from international investors and companies. Given the size of capital needs, their development and success are dependent on the partnership with partners outside of Vietnam, such as from the Middle East, Japan and Taiwan.

ANZ has a strong advantage and experience working with many mining and oil and gas companies with business in Australia and Asia. How does the bank leverage the network in supporting companies in this sector?

I head up the ANZ natural resources business globally and I don’t sit in Australia, I live in Singapore. This is one step in the connectivity of Australia into Asia. We have been very strong in mining and minerals, and now we are developing in oil and gas expertise so we can help our clients with both core minerals, but also oil and gas asset. ANZ sees as many opportunities in the oil and gas industry as we do in the mining and metals industry within South East Asia and we want to leverage our natural resources strength from Australia and develop more in oil and gas business within South East Asia. South East Asia has five times as many opportunities as Australia has in terms of oil and gas. Based on that, we want to leverage our expertise from Australia into Asia, between South East Asia and North Asia. It means not just Australia to Asia, but Asia to Asia. At ANZ, we follow a client centric policy, where we go after what is clients’ interests other than trying to sell them products. When we see clients’ needs in Vietnam and across the region, we will look to leverage them in our network and that’s the entire concept behind what we call a ‘Super Regional Strategy’. As part of that, Vietnam for us is a franchise country where we look to develop and deepen the relationship with key clients such as PVN, work with it in its industry space, using industry specialists such as our natural resources specialists, so that we are able to add value beyond just lending money. And the entire focus of the organisation is to see how we deliver value to clients by not just giving them balance sheet but also by bringing to them the connectivity that we are able to leverage from Australia and New Zealand network to Asia and also intra-Asia countries. We have offices in Korea, Japan, Singapore, Hong Kong and China, so we are able to bring in investors from these countries, equivalently, we have a footprint in Middle East, Europe and America we are able to talk to investors in those countries and attract investors’ interest in countries like Vietnam. Sitting on the ground in Vietnam, ANZ has a local presence and the industry specialist as well as the international reach to be able to bring it all together for our clients.

In Vietnam, how many projects relating to natural resources has ANZ been providing financial support or term loan facilities?

Well, we see the financing from our client base, not just a project base. We are engaging with clients both in oil and gas, metal and minerals as well as in some other resources such as agriculture and there we have a very wide spread of customers. Clearly in natural resources, most projects that we finance belong to state-owned enterprises. In agriculture, however, we are lending to a number of smaller agriculture based projects.

Could you please give some examples of how you connect customers across regions and especially for PVN. How do you connect PVN with customers in other countries?

We’ve regularly organised several trade missions from Australia and New Zealand to Asia markets, such as Vietnam to connecting the dots across regions. On the other way, we’ve started the connectivity by taking PVN to Australia and meet with potential customers. There are ongoing dialogues between PVN and other counter parties where they are exploring the opportunities.