Summary of Proposed Investment
Project Number
7407
Company Name
Basic Petroleum International Limited
Date SPI Disclosed
May 16, 1996
Country
Guatemala
Industry
Metals and Mining
Status
Completed
Sector
Oil and Gas Production (Includes Development)
Department
Infra-WBG Dir. Minerals & Metals
Environmental Category
A - Significant
Previous Events
Approved : Jul 18, 1996
Signed : Jul 26, 1996
Invested : Sep 4, 1996
Project Description
Summary Of Project Information (SPI)
| Project Name | Guatemala-Basic II |
| Region | Central America |
| Sector |
Projected Board DateJune 18, 1996
Company NameBasic Petroleum International Limited (Basic, the Company)
Technical Partner and/or Major Shareholders
Basic, which is listed on the NASDAQ National Market System (USA), is controlled by Basic Holdings Limited (30%), which in turn is 34% owned by Basic’s key managers and directors; 30% owned by General Oriental Investments Ltd. (GOIL); and 36% owned by other investors. The Company’s other shareholders are GOIL (17%); Beagle Limited, a UK-based investment company (10%); two US/Canadian investment companies (8%); and IFC (5%). The remaining 30% is widely held.
Project Cost Including proposed IFC investment
Project cost: US$73 million. Proposed IFC investment: A Loan of US$12 million for its own account and a B Loan of US$12 million for account of participant banks. In addition, IFC may also propose an equity/quasi-equity investment in the range of US$2 million.
Location of project and Description of site
All the Company’s operations will continue to be located in north-west and central Guatemala.
Description of Company and Purpose of Project
Basic, with production at end-1995 of around 13,000 barrels per day (bpd), is Central America’s only significant oil producer. The project, which consists of the Company''s 1996 investment program, is expected to generate valuable incremental net foreign exchange of around US$25 million per year, including government income in the form of royalties and government participation of US$19 million per year. The Company, with 479 employees of which just four are expatriates, will continue to play an important role in hiring and training Guatemalan employees. IFC’s role in this project is to enable Basic to continue a successful growth pattern and improve its profitability; help ensure the Company’s continued growth in compliance with international environmental standards; continue to facilitate a dialog between the Company and environmental NGOs active in the area; and provide and mobilize funds for Guatemala where there are virtually no commercial sources of long-term financing without a B Loan structure.
Environmental Category and Issues
This is a category A project according to IFC''s environmental review procedure. Environmental issues associated with this project include compliance of the Xan Field''s expansion with the World Bank''s OP 4.04 (Natural Habitats), pipeline right-of-way impacts, oil spills, management of produced water and gas, access to protected areas and areas of high biodiversity, social and economic impacts to communities, worker health and safety. An additional environmental issue is the Company''s compliance with Government of Guatemala environmental requirements for the Xan to La Libertad pipeline and the implementation of environmental mitigation measures proposed in the corporate environmental audit completed by the Company in 1994. A draft environmental assessment was made available to the World Bank Public Information Center on April 15, 1996. Basic has held extensive consultations with a variety of stakeholders during the preparation of this draft EA. These consultations led to commitments from Basic to conduct supplementary environmental studies that will detail the Company’s environmental management commitments to demonstrate full compliance of the second project with applicable World Bank environmental policies and guidelines and also confirm the first project’s ongoing compliance.
The are from the Public Information Center.
| Date SPI sent to PIC | May 17, 1996 |
For Additional Information contact:
Corporate Relations Unit
Telephone: (202) 473-3800
Fax: (202) 676-0365
Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).
Sponsor / Cost / Location
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