Finn Bjørnstad with Singaporean associate Lesley Tan
What are some of the projects you work with?
I typically work with oil and gas investment projects, where I act as a service provider for a company going into an offshore project, such as the development of an oil field somewhere in the world – typically in Mexico, Indonesia or Brazil. I typically act related to a construction contract and a contract for an oil company to lease this unit for a certain time. Then I do all the legal aspects of that project together with my team.
What are the obstacles to getting contracts signed?
It depends on the project but very often it’s timing – to be able to deliver a certain asset at a certain place and time and at a certain cost. So, it’s timing and cost. Those can be the two most serious obstacles.
How do you mitigate legal, technological and other risks in contracts?
I could write a book about that. What we do is make a risk matrix for projects, which will be different from country to country and project to project. We have to be very focused on the major risks. But it’s not my job to tell clients not to take risks, only to help asses risk and to price it correctly.
What do you think is crucial to decision-makers when you make deals with them?
It’s important to understand and respect how they, and everyone involved in the negotiation, think. They have their own agendas and considerations and you need to understand and respect these to build up the right negotiation atmosphere.
What are typical deal-breakers?
Big surprises that happen late in the process. Very often this is to do with financing, that you’re not able to finance the terms you have negotiated and the project proves not to be bankable in the end.A lot of money may be at stake when you are preparing documents that will formalize huge commitments.
How does that feel?
Sometimes it feels like a big responsibility but it also feels like my clients put a lot of trust in me. I think my job is to ensure that I remember all the bits and pieces when the client is just focusing on closing the deal. Sometimes I feel that I’m creating more problems than I’m solving but that’s part of my job. Balancing these things is an art.
What do you like most about your job?
I’m very inspired by the young people I work with, particularly when I see them coming into my team and proving themselves; in that the client responds positively to what they do. Having the client take us into the early stages of a project is also rewarding. Then we feel we are in a partnership and not just an external advisor.
How willing are banks to finance offshore and shipping projects today? And what other sources of financing to you see becoming available to rig and ship owners?
Traditional banks are still active in this market but I think they scrutinize projects more than they used to and they don’t have the appetite to finance speculative projects without good cash flow. Chinese banks and lease companies are becoming very active but, primarily for projects with a Chinese content. The bond market has been very active over the last few years both for both project financing and unsecured corporate debt. I think the trend is that banks and bonds are working more together in a capital structure, and that banks welcome the bonds to offload the risk taken by banks. In short, capital is definitely available for good offshore projects.
What is the impact of your work on the profitability of the industries or companies you work with?
I think our understanding of the business is important and adding value for our clients, particularly related to risk assessment and pricing of services. We bring to the table experience from previous projects, so we know what to do and what to look for.
Photo: Wikborg Rein
Wikborg Rein & Co
- Established in 1923 in Norway
- About 250 lawyers in Oslo, Bergen, London, Singapore, Kobe and Shanghai
- Specializes in shipping, offshore, energy and natural resources
- Finances corporate and cross-border transactions
- Handles all aspects of dispute resolution and maritime emergencies
- Lawyers qualified in English, Chinese, Singaporean, Brazilian and Norwegian law
- Asian Maritime Law Firm of the Year, Lloyd’s List 2012 and nominated as Global Maritime Law Firm of the Year, Lloyd’s List 2013
Finn Bjørnstad
Managing partner of Wikborg Rein, London
Head of Offshore Team
Bjørnstad (55) has spent his whole working life at Wikborg Rein and has led the offshore team for the last ten years. Currently based in London, Bjørnstad has also worked in Singapore and Japan. He has been acknowledged by Chamber & Partners in the “Leaders in their Field” category for Energy: Oil & Gas, Shipping Finance.
Most of his clients are banks and shipping or offshore companies. He and his team assist them with:
- Newbuilding or vessel conversion projects, in particular related to offshore projects with tender work, joint venture agreements, risk assessment, financing and operational matters
- The financing, purchase, sale and charter of ships and offshore vessels, and M&A transactions related to shipping and offshore companies
- Financing of various shipping or offshore activities around the world in the private capital market, both for investors and brokers
