EFIC provided performance bonds to Leighton Holdings customer's bank in Iraq
When Leighton Holdings’ subsidiary Leighton Offshore secured a US$733 million contract to provide enhanced export crude oil facilities in southern Iraq, the contract required the company to provide a performance bond to its customer in Iraq.
Export Finance and Insurance Corporation (EFIC), Australia’s export credit agency, provided two performance bonds, together worth US$36.7 million, to support the participation of Leighton Offshore in the contract.
Leighton Offshore’s customer, South Oil Company, required the performance bonds to be issued by a local bank. As a result, EFIC utilised its international network of banking relationships to enable issue of the performance bonds by South Oil Company’s nominated bank in Iraq.
The performance bonds were issued under a bonding line provided by EFIC to Leighton Holdings in 2010. The bonding line is available to companies in the Leighton Group for projects undertaken worldwide.
Leighton Offshore’s engineering, procurement and construction contract is to install three single point moorings and 120 kilometres of 48-inch pipeline in the Arabian Gulf, offshore Iraq. The project will expand and improve facilities for exporting oil from the Fao Terminal near Al Basrah and is a major part of the South Oil Company’s strategic redevelopment program for Iraq.
Leighton Holdings’ Chief Executive Officer, David Stewart, said ‘One of our strengths is our ability to execute large projects in diverse international locations, but these factors also mean that bonds aren’t always available in the commercial market. EFIC’s facility has enabled us to meet our customer’s requirement for performance bonds in our contract in Iraq.’
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