Pan American Energy LLC, Argentine Branch is the Argentine branch of Pan American Energy LLC, a company formed in the State of Delaware between BP and Bridas Corporation for specific oil and gas E&P activities. BP plc owns 60% of the equity interest in PAE, and Bridas owns the remaining 40%. Bridas is itself 50% owned by Bridas Energy Holdings Ltd. 50% by China National Offshore Oil Corporation.

BP plc is an integrated oil and gas company with operations in over 70 countries. Bridas is a private company engaged in three principal areas of operation: (i) the exploration, development and production of oil and gas; (ii) the refining and processing of oil and gas, and (iii) the oil refining, and refined products distribution and marketing.

The capital expenditure program for the Project is estimated at $1.5 billion. IFC will lend up to $100 million for its own account and mobilize up to $300 million in B loan and Parallel loans. The Company will meet the remainder of its funding requirements through internally generated cash and other financing.

120.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	120.0
Equity

* These investment figures are indicative

PAE is headquartered in Buenos Aires. The Project is focused on further development of PAE’s oil and gas assets in the Cerro Dragón block in the Golfo San Jorge Basin and in the Lindero Atravesado block in the Neuquén Basin, both in Argentina.

The Project will contribute to growth in a key sector of Argentina''s economy with further development of primary energy sources in Argentina. The expected benefits will come in the form of:
1. Increased supply of hydrocarbons, including natural gas: PAE''s upstream production will increase from the current level. Continued support for domestic gas production to help alleviate energy constraints and reduce gas imports. The increased levels of gas production will also mitigate Argentina''s dependence on gas imports which are negatively impacting current account balances.
2. Contribution to government revenues: the Project will result in increased production and sales which will increase associated provincial taxes, royalties, and federal income taxes, an important source of increased revenue to the federal and provincial governments.
3. Significant local employment: PAE has a significant impact on employment in the regions in which it operates. At the national level, PAE has 2,288 direct employees and approximately 10,047 contractors, almost all of whom are national hires.
4. Local/National sourcing: The Company procures most of its goods and services in Argentina from national contractors. A large portion of the 2015-2016 capital expenditure is expected to be sourced locally/nationally.
5. Strong community development and linkages program: In line with the Company''s growth, PAE continues to spend on social development programs ranging from education, health, environmental and local development programs to SME support programs in its areas of operation.
IFC plans to monitor the following indicators during supervision: (i) annual production of natural gas in Argentina (mcf); (ii) payments to governments (US$); and (iii) purchases of domestic goods and services (US$).

IFC has reviewed the benefits of the project and the associated governance risks and believes that the project should be supported. In coming to this view, IFC considered the fiscal and non-fiscal benefits, governance metrics and the World Bank Group’s engagement in the country.  The most recent WBG Country Partnership Strategy for the Argentine Republic affirms the importance of the hydrocarbon sector for the country.  Despite room for improvement which the government is trying to address, the sector is relatively well governed overall. The provincial governments are responsible for managing hydrocarbons resources within their jurisdictions, including granting and renewing hydrocarbon concessions and collecting royalties.  Royalty collection is audited at the federal and provincial levels. Royalties are further distributed among the provincial municipalities according to percentages established by provincial law. The sector’s transparency is expected to improve given the government’s push to attract more foreign investments in the sector.

IFC''s investment will bring benefits to the Project:
(i) Provision of long term financing: Argentina''s external debt markets have been mostly closed in the past few years. IFC''s financing is critical in improving access to long term financing.
(ii) Mobilization: IFC aims to raise significant additional financing by bringing in commercial banks under the B loan umbrella.
(iii) Long Term Partnership: Continue to support PAE as a long standing client.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Community Development Outlay ($) and (#)	Outlay ($)		Not Available	Not Available	Not Available
Payment to Government	Annual Payments ($M)		Not Available	Not Available	Not Available
Domestic Purchases ($M) and (MT)	Current Purchases ($M)		Not Available	Not Available	Not Available
Organizational capacity and Management Programs(%)	Organizational capacity and Management Programs(%)		Not Available	Not Available	Not Available
Stakeholder Engagement(%)	Stakeholder Engagement(%)		Not Available	Not Available	Not Available
Human Resources Policies and Procedures(%)	Human Resources Policies and Procedures(%)		Not Available	Not Available	Not Available
Occupational Health and Safety(%)	Occupational Health and Safety(%)		Not Available	Not Available	Not Available
Direct Employment (#) - Operations and Maintenance	Employment (#)		Not Available	Not Available	Not Available
Female Direct Employment (#) - Operations and Maintenance	Female Employment (#)		Not Available	Not Available	Not Available

This project is classified category B according to IFC’s Environmental and Social Review Procedure because the Environmental, Social and Health & Safety (ESHS) impacts related to the investment are limited, site specific and therefore adequately managed through implementation of appropriate mitigation measures. IFC’s review did not identify any significant adverse impacts or high risk exposures.

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.