IFC requires that this document and the attached Land Acquisition and Compensation Plan (LACP) are made available through the World Bank InfoShop and to locally affected communities no less than 30 days prior to project consideration by the IFC Board of Directors. The Summary of Project Information (SPI) also provides details of where the ERS has been made available to the locally affected communities. The SPI must be sent to World Bank InfoShop no less than 30 days prior to project consideration by the IFC Board of Directors.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental /social information submitted by the project sponsor, and a site visit. The following potential environment, health and safety and social impacts of the projects were analyzed. - Establishing an Environmental and Social Management System (ESMS); - The Operator’s capacity to review and manage projects in accordance with IFC’s environmental and social safeguard policies; - Contamination of the proposed site(s) from current or past operations (on or offsite); - Occupational health and safety issues including fire protection, emergency response and preparedness; - Natural habitats; - Management of cultural property; - Public consultation; and - Possible displacement of people or economic dislocation caused by land acquisition for the project.

The Operator has presented plans to address these impacts and will seek to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements - the host country laws and regulations, and the World Bank/IFC environment and social policies and environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the Operator/project is summarized in the paragraphs that follow. Further information is provided in the attached documentation. The El Mansoura concession is located in the Nile Delta Basin 80 km southwest of Port Said. It has an area of 1,380 square kilometers. To date a total of 9 wells have been drilled and three wells are currently producing. The Qantara concession has an area of 150 square kilometers and is located 35 km east of El Mansoura concession. Four wells have been drilled in the Qantara concession but currently only one well is producing. - Merlon Petroleum Company (the Operator) has committed to the development of an Environmental and Social Management System (ESMS) that will integrate environment, occupational health and safety, and social aspects of the operations in Egypt. This ESMS will be adopted comprehensively by Merlon Egypt. - As part of the environmental requirement by the Egyptian authorities, the Operator has prepared Environmental Impact Assessments (EIAs) for each of the developments in each concession, and will prepare EIAs for each future project. The Operator has committed to prepare future EIAs taking account of World Bank Group policies and procedures for the preparation of EIAs, together with the requirements of the Government of Egypt. - There is no site contamination from current or past operations. The previous use of the land was agricultural. - The Operator prepares training programs for employees on a yearly basis. The training programs are related to health, safety and environment, risk assessment, HAZOP, fire fighting, emergency preparedness and accident investigation. The project has not had a fatal accident since development of the concessions, and during construction and operation only minor accidents have occurred. - Land acquisition to date has only involved irrigated agricultural land and to date these activities have required no physical displacement of households. There is a comprehensive land acquisition and compensation process in place and the Operator has prepared, and committed to implementation of, a Land Acquisition and Compensation Plan (LACP) which is attached to this document.

The following supporting document provides further details of environmental and social issues: Land Acquisition and Compensation Plan (LACP)

Accordingly, IFC concludes that the proposed project will meet the applicable World Bank/IFC environment and social policies and the environmental, health and safety guidelines upon successful implementation of the agreed mitigation measures.

IFC will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing the annual monitoring reports (AMRs) prepared for the project covering: (i) the status of implementation of any measures contained in the Environmental and Social Management Systems and (ii) ongoing performance of project-specific environmental, health and safety and social activities as reflected in the results of periodic and quantitative sampling and measuring programs. Periodic site supervision visits will also be conducted.