The sponsor of Merlon Egypt is Merlon Petroleum Company, an unlisted, privately held oil and gas company based in Houston. Merlon also has operations in the onshore upper Texas gulf coast in the US.

A phased investment program of $215 million, in which Merlon Egypt has a net share of $108.5 million. IFC proposes to provide loans of up to $45 million to Merlon Egypt. This comprises $30 million for IFC’s own account in A and C Loans, and up to $15 million in B loans.

30.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
Equity

* These investment figures are indicative

The El Mansoura and Qantara Concessions are located in the onshore Nile Delta, Arab Republic of Egypt.

The project supports a) the development of gas for domestic use yielding, and b) the government’s strategy of promoting gas as a domestic fuel of choice. It will generate benefits in the form of royalties, taxes, and profit share. The local operating company directly employs about 50 persons; the project will also provide opportunities for local equipment, supplies, services and employment. The participation of smaller companies such as Merlon and Melrose is important to the gas sector in Egypt in that they help develop reserves that are individually too small to be of interest to larger independents or the major companies. IFC’s involvement supports participation of such companies. IFC is also assisting the sponsors to develop their systems and increased capacity for environmental and social management. Additionally, IFC will help mobilize B loans in the latter phase of the Project.

This is a category B project according to IFC’s Procedure for Environmental and Social Review of Projects. 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 operation in Egypt. This ESMS will be adopted comprehensively by Merlon Egypt. The Operator provides training for employees on a yearly basis and relates to health, safety and environment, risk assessment, HAZOP, fire fighting, emergency preparedness and accident investigation. 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 the implementation of, a Land Acquisition and Compensation Plan (LACP).
Location of environmental documents in locally affected community
Merlon Petroleum CompanyCorner 270 & Palestine StreetNew Maadi, Cairo, EgyptPhone: (20-2) 520-1135Fax: (20-2) 520-1137 Qantara Petroleum CompanyCorner 270 & Palestine StreetNew Maadi, Cairo, EgyptPhone: (20-2) 520-1136Fax: (20-2) 516-7382