Mexican oil and gas company Grupo R has sealed a US$518m loan from 11 international banks to construct of one of the biggest Korean-built drillships in the world for oil exploration in the Gulf of Mexico.

Grupo R affiliate Laforta Gestao e Investimentos Sociedade Unipessoal will use the loan to build the ship and will then lease it to Mexico’s state-owned petroleum company Pemex Petróleos Mexicano.

WestLB is leading the transaction − its final deal after the bank ceased operations at the end of June this year – along with Mizuho Corporate Bank.

There is an additional tranche provided by the Korea Export-Import Bank, and a commercial lender tranche that benefits from K-Sure insurance coverage. Other financial institutions involved in the financing include Bank of Communication New York, Korea Development Bank, Santander, Grupo Financiero, BBVA, Banco National de Mexico, HSH Nordbank and Scotiabank.

Law firm Milbank, Tweed, Hadley & McCloy represented the lending group of banks.

The vessel has the capacity to operate in water depths of 10,000 feet and drill up to 35,000 feet, approximately seven miles below the surface.

“Pemex has said that it regards deepwater drilling an increasingly important part of its long-term strategy for developing new reserves, and that it is willing to invest in the resources and technology to make that happen,” says Milbank project finance partner Daniel Bartfeld.

“We’re pleased to have worked with Kexim and a group of major financial institutions in structuring a highly sought-after project financing in Mexico, in this market it is very unusual to be oversubscribed, and Grupo R managed to achieve that with this financing,” he adds.