Treasury & Financing Department
The Treasury and Financing Department plays an active role in negotiations and preparations of specific project financing
contracts for the exploration and development of crude oil and natural gas as well as installation of refineries and pipelines.
The Treasury and Financing Department plays an active role in negotiations and preparations of specific project financing contracts
for the exploration and development of crude oil and natural gas as well as installation of refineries and pipelines.
The department is responsible for exploring sources of credit, negotiating terms of credit with finance houses, monitoring market
activities, including interest rates and currency movements.
There are currently more than fourteen projects financed by NICO. The finance shares vary from one hundred to ten percent of total.
Each project has one service contract, and is normally allocated to a number of sub-contractors.
The department consists of three sections, namely Treasury Section, Project and Financing Section and Credit Section as follows.
Treasury Section
This section is responsible for studying and analyzing currency risks, providing finances for projects affiliated with NICO, monitoring the
finance utilizations during the life time of projects and making sure the progress is within the time schedule.
Additionally it prepares finance contracts, studies risks involved in relation to completion, and politics. In relation to project financing,
NICO as the financier provides the necessary finance to a project according to specific terms of the contract called (Finance Agreement).
The borrower uses the finance to carry out a specific project task like crude oil and gas exploration and development.
Project Financing Section
The Section has to make sure that all the project financing affairs are carried out smoothly, and all guarantees including performance and
timely completions risks are secured. Payment will be made by the financier in the form of cash and or any other payment made under each
Letter of Credit or any other means of payments. NICO, as the financier agrees to provide the amount of finance based on the required cash flow
in the form of an advance during the availability period.
The finance is normally provided with a schedule giving details on a monthly basis of the L/Cs which are to be opened in accordance with the cash flow.
Payments required for goods and services connected with the exploration and development of crude oil and natural gas are paid by direct documentary
remittance against invoices and via L/Cs. NICO receive instructions from projects to open or amend L/Cs in favour of suppliers all over Europe,
Far East and Middle East.
The company will also provide advance payments, guarantees, or performance bond guarantees. The most frequent payments are against invoices
or cash against documents.
Additionally, NICO is playing more active roles in activities similar to banks and financial institutions that provide loans to customers,
and expects the return of the capital plus predefined or floating interest rates. The company merely has interest, in making sure the capital
loan with its rate of interest will be secured over a specified time limit.
Credit Section
Investigates sources of credit, negotiates term of credit with lending institutions and NICO subsidiary or sister
companies in line with the credit policies and procedures.
Monitoring the market activities, including interest rates, and currency movements. Reviews currency risks for each transaction
and identifies hedging provisions where required.