The United States, historically one of the world’s leading importers of oil and gas, is on its way to becoming a leading exporter. In a dramatic turnaround that was previously unheard of, the nation is on its way to surpassing Russia and even Saudi Arabia as an exporter of oil. Thanks to the shale oil and gas boom, the dream of independence from foreign oil may finally become a reality.
The Louisiana Offshore Oil Port, LLC in the Gulf Coast is the nation’s largest storage center of imported oil. Making use of the area’s natural cavernous landscape, the Port can support some of the largest oil tankers in the world, more than any other facility. Though it would have been almost unthinkable years ago, company executives and clients are having serious talks about turning a portion of this colossal importing and storage facility into an exporting center.
Financing Oil and Gas Projects Causing Slow Down
The delay in actually making this happen isn’t due to shortage of shale oil and gas supply but a lack of sufficient oil and gas financing and transportation funding. Financing oil and gas projects of this size and caliber require serious investments. In the Louisiana Offshore Oil Port, LLC case alone, funding would be needed to completely redo the infrastructure, pipelines and ports so that they are suitable for exporting. Significant Transportation funding would be needed as well to house and move the shale oil.
Oil and Gas Factoring to Finance the Importer-to-Exporter Transition
Oil and gas funding can be obtained a number of ways from private investors to more traditional oil and gas loans. Factoring for the oil and gas industry, is where a business sells its current invoices to a third-party invoice factoring company. This is another way companies can get cash quickly for big projects. Oil and gas factoring is particularly attractive to those companies with high dollar-value invoices. Clients are charged a fee and a percentage, usually 2-8% of the face value of the invoice for the factoring service. Factoring receivables allows a company to get cash quickly to use for project financing that won’t negatively affect their working capital.
Those close to the industry are closely watching to see how this transition will unfold and whether the U.S. will become a major exporter of oil and gas. As this sea change occurs, companies looking to secure oil and gas financing can turn to invoice factoring companies for a range of commercial financing solutions.