Summary of Proposed Investment
Project Number
7418
Company Name
COMPANIAS ASOCIADAS PETROLERAS S.A.
Date SPI Disclosed
May 13, 1996
Country
Argentina
Industry
Metals and Mining
Status
Completed
Sector
Oil and Gas Production (Includes Development)
Department
Gbl Infrastructure & Natural Resources
Environmental Category
B - Limited
Previous Events
Approved : Jun 19, 1996
Signed : Oct 29, 1996
Invested : Feb 13, 1997
Project Description
Summary Of Project Information (SPI)
| Project Name | Argentina-CAPSA Diadema Field Expansion |
| Region | Latin America |
| Sector |
Projected Board DateJune 14, 1996
Company NameCompañías Asociadas Petroleras S.A. (“CAPSA” or the “Company”)
Technical Partner and/or Major Shareholders
CAPSA is owned equally by the Götz, Etchepare and Bachiochi families.
Project Cost Including proposed IFC investment
CAPSA’s total financial needs are about US$70 million required to finance the Company’s two year investment program and to restructure existing short-term debt. It is proposed that IFC provide total financing of US$60 million: US$20 million for its own account and US$40 million for the account of participant banks.
Location of project and Description of site
The Diadema field is located in the San Jorge basin in the Chubut province of Southern Argentina in a relatively remote, barren location with a low population density.
Description of Company and Purpose of Project
CAPSA, the sponsor, is one of Argentina’s smaller, family owned, oil and gas producers. The Company’s main area of activity is the operation of the Diadema oil field which produces some 5,500 bpd. In addition, the Company holds 55% of CAPEX (the remaining 45% is publicly listed), which operates a 370 MW electricity generation plant utilizing the 2.45 million cubic meters per day output of CAPEX’s Agua del Cajón and Senillosa gas fields in Neuquen.
The project to be financed is designed nearly to double daily oil production in the Diadema field through the extension of CAPSA’s secondary recovery program. The investment will finance a comprehensive drilling and workover program as well as the construction of various surface facilities.
Given the difficulty that smaller Argentine companies have in accessing the international capital markets, it is unlikely that CAPSA would be able to develop the Diadema field to its optimum recovery level without IFC assistance. IFC’s presence is required to attract the long-term finance necessary and prudent to enable CAPSA to weather the oil recovery and price risks inherent in the project. This project would contribute to the development of second tier firms in the country while improving provincial industrial development. Increased production of oil would generate export earnings and provide tax and royalty revenues for Chubut province which has few other income generation opportunities. The project will also create some employment opportunities, directly with CAPSA as well as with its suppliers and contractors. Finally, the Company would benefit from IFC’s institution building effort which would help it move towards becoming a more mature and better balanced competitor.
Environmental Category and Issues
This is a category B project according to IFC’s environmental review procedure. Environmental issues of potential concern with this project are the prevailing environmental conditions as a result of existing operations, the management of produced water and gas, the rehabilitation of lands impacted by the secondary recovery program and worker health and safety. The Company has provided IFC with environmental baseline studies of its existing operations in order to demonstrate compliance with Government of Argentina environmental requirements as well as with World Bank environmental guidelines. Detailed plans have been proposed for the management of produced water and gas (it is proposed, inter alia, that 6,000 m3/day of produced water will be re-injected), the rehabilitation of disturbed areas and worker health and safety.
The is from the Public Information Center.
| Host country location of environmental documents | Compañías Asociadas Petroleras S.A., Avenida Eduardo Madero 940, 1106 Buenos Aires, Argentina |
Date SPI sent to PIC May 13, 1996
For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (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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