Oil Funding and International Financial Arrangements

The traditional source of funds for exploration and development of petroleum resources has been privately‐owned petroleum companies. However, many of these same companies have recently borrowed heavily to finance their acquisitions of other petroleum companies. This may limit the ability of those companies to finance future exploration and development efforts, particularly in developing countries. Special financial arrangements may be needed if the funds required are to be available. The form of such arrangements is discussed, and emphasis is placed on the need to reconcile the differing needs of borrowers and lenders.