Vaalco Gabon (“Vaalco” or “the company”), an ex-IFC client, has successfully operated a number of fields in the Etame block, located 45 km offshore of the southern coast of Gabon, since September 2002. In addition to the offshore block, the company also has a 50% working interest and operatorship in the onshore Mutamba Iroru block. The remaining 50% has been farmed out to Total.

The Etame block operations involve crude oil production from the Ebouri, Etame, South Tchibala and Avouma offshore fields. The company currently produces 17,000 bopd gross and 4,150 bopd net to Vaalco from seven wells. In 2002, Vaalco entered an FPSO Agreement with Petroleo Nautipa FPSO (contract through 2020). The FPSO has a processing capacity of 25,000 bopd and a storage capacity of 1.1 million barrels. Throughout its operations, the FPSO has had 146 liftings, totaling 74.1 million barrels without a single environmental incident. Crude from the FPSO is currently sold to Mercuria Trading NV under a Brent pricing structure.

IFC’s financing relates to the next phase of the company’s ongoing oil exploration and development programs under the Etame Permit. The project comprises (i) the construction of two new platforms and associated facilities in Etame and South East Etame and North Tchibala fields; (ii) the construction of production wells for the aforementioned fields; and (iii) the installation of crude sweetening facilities at the Ebouri platform (the “expansion project”). The objective of the expansion project is to increase production from the Etame block to the full capacity of the FPSO of around 25,000 bopd.