Lime Rock is the majority shareholder of Transform Exploration with a 82.0% stake as of October 2014. Founded in 1998, Lime Rock is a private equity fund with over US$5.5 billion in total private capital commitments. Lime Rock focuses on oil and gas sector investments and has a diversified portfolio across the globe. Lime Rock’s first investment in Transform Exploration was made in December 2012. The remaining shareholders include; (i) management and founders (11.8%); (ii) friends and family (3.6%); and (iii) JSA partner (2.6%).

IFC will provide an equity investment of up to AU$21.5 million (US$18.9 million) to Transform Exploration. The investment will mainly be to help Transform Exploration fund exploration activities (seismic and drilling) in its current licenses and to fund future general and administrative expenses.

18.32 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	18.32

* These investment figures are indicative

Transform Exploration’s PNG licenses are situated in the center of the island of Papua, east of the land border that separates PNG from Indonesia. These licenses lie within the Kiunga Rural Local Level Government area of the North Fly District of Western Province and the Nomad Rural Local Level Government of the province’s Middle Fly District.

Exploration and monetization are the conditions for developing a domestic value chain, and companies such as Transform Exploration play an important role in helping host countries identify and develop resources. Particularly, Transform Exploration''s key assets are located in the foreland area of PNG whose full monetization depends on discovering and aggregating additional resources. With additional capital from IFC, Transform can, if successful, help the Foreland region move along the gas value chain. While development benefits will be limited in the exploration phase, the expected impact from the development and monetization of currently stranded resources will likely include: significant fiscal revenues for both central and local levels of government as well as non fiscal benefits for communities in the form of jobs, local economic development and infrastructure.
Moreover, stringent environmental and social as well as transparency standards are expected to have a positive effect on the industry governance in the region and in the country.

PNG has faced persistent challenges of corruption and fragility of institutions. The completion of the PNG LNG project in 2014 has demonstrated the government’s ability to successfully host a major oil and gas project.  To reap greater broad-based benefits from its resource sector, the government is working towards improved governance and transparency in managing revenues from the extractives sector and is engaged with the World Bank in this respect.
In March 2014, PNG became an EITI candidate country, and has 3 years to become fully EITI compliant.  This, together with general improvements in public financial management and finalization of the Sovereign Wealth Fund should put the PNG in a stronger position to pursue inclusive growth.
With respect to the IFC investment, the governance risks to project benefits are limited given the negligible government revenue generation associated with the exploration stage of Transform’s operations. Notwithstanding this, Transform Exploration is committed to complying with IFC’s corporate governance standards, including the disclosure requirements of principle contracts with host governments.

1. Environmental & Social expertise: By partnering with Transform Exploration at the exploration stage, IFC can assist the Company to adopt robust E&S procedures early on and ready the company for implementing future developments in line with IFC Performance Standards and Good International Industry Practices (GIIP). Given the potential complexity of social and community issues in PNG, the Company is keen to draw on IFC''s experience in building robust E&S management systems as well as engaging effectively with stakeholders.
2. Access to Capital & Long Term Partner: As an equity investor, IFC will provide long term, high risk capital to the Company which will be key given the long term focus of Transform Exploration''s strategy and the likely continued requirement for funds (both equity and debt) to develop the foreland gas in PNG. IFC may also be able to mobilise significant funding from other sources in case of additional capital needs in relation to the development stage.
3. Stamp of approval and facilitating role: While IFC has been engaged in PNG mostly in the financial and telecommunication sectors, this is the first engagement in the natural resource sector. Beyond providing a stamp of approval to the company, IFC will also be able to help facilitate dialogue with various stakeholders in country, including government, private sector players and others.
4. IFC will also work with the company to provide support when and if necessary in relation to community development and supply chain/local content solutions.

This is a category B project as the impacts related to the establishment of temporary exploration wells and potential additional seismic activities are site-specific, largely reversible, and adverse impacts if any, are temporary and can be readily mitigated through the mitigation measures identified in a project ESIA. The client is committed to implement the IFC Performance Standards in identifying and mitigating Environmental and Social Risks related to the project activities.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.