Summary of Proposed Investment
Project Number
8498
Company Name
PECTEN CAMEROON COMPANY
Date SPI Disclosed
Jan 26, 1998
Country
Cameroon
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 : Mar 12, 1998
Signed : Jun 2, 1998
Invested : Jun 30, 1998
Project Description
Summary Of Project Information (SPI)
| Project Name | Cameroon-Pecten Mokoko |
| Region | Sub-Saharan Africa |
| Sector |
Projected Board DateFebruary 27, 1998
Company NamePecten Cameroon Company (Pecten)
Technical Partner and/or Major Shareholders
Pecten is 80% owned by Pecten Producing Company, a wholly owned subsidiary of Shell Oil Company. The remaining 20% is owned by Société Nationale des Hydrocarbures (SNH), Cameroon’s state oil company.
Project Cost Including Proposed IFC Investment
To assist Pecten in meeting its ongoing financing needs, IFC is to provide a long-term revolving credit facility consisting of an A Loan of up to US$75 million for IFC’s account and a B Loan of up to US$190 million, for the account of participants, but with an aggregate amount not exceeding US$250 million.
Location of Project and Description of Site
The Project is located in the Rio del Rey basin, offshore Cameroon.
Description of Company and Purpose of Project
Pecten and Elf Serepca (which is owned 20% by SNH and 80% by Elf Aquitaine) have participating interests in nine operating concessions in the Lokélé and Rio del Rey permit areas, which account for over 95% of Cameroon''s oil production. The purpose of the investment is to provide flexible financing to facilitate the ongoing development of the permit areas. This development work is aimed at reducing the otherwise-expected decline in oil production, by improving recovery from mature fields and initiating production from more marginal fields that have become economically attractive as a result of special incentives offered by the Government of Cameroon.
In the past, finance for Pecten’s development expenditures in the Rio del Rey basin has been provided as distinct project financing, on an approximately biannual basis. Pecten has found this to be inefficient, expensive and ill-matched to its actual financial requirements. Pecten has thus asked IFC to provide a revolving credit facility, which more closely matches its needs and which will remove the requirement for the repeated raising of new finance. The proposed investment is designed to provide innovative financing in Cameroon, that will meet Pecten''s needs in a flexible manner for at least the next five years.
Prior to 1991, Pecten was able to arrange financing on the international markets, without IFC’s assistance. Since then, however, the international banking community has made it clear that it would no longer provide the long-term financing which is required for the continued development of Cameroon’s oil resources without IFC’s participation to mitigate perceived political risks. This continues to be the case. At the same time, the proposed financing is vital to ensure the optimal exploitation of Cameroon’s most important oilfields. IFC intends to mobilize up to about 75% of the proposed debt financing from external sources. With IFC as the catalyst, this Project will be able to mobilize significant funds for an innovative financing facility in a country with a high level of perceived political risk.
Cameroon is sub-Saharan Africa’s fifth largest oil producer and oil accounts for a large proportion of Government revenue. The direct benefits of this Project to Cameroon are thus considerable as it receives a large proportion of the operating income arising from oil production, as well as dividends. The Project will therefore generate a significant amount of additional foreign exchange earnings for the country.
Environmental Category and Issues
This is a category B project according to IFC’s environmental review procedure. The following potential environmental, health and safety impacts were key issues addressed during IFC’s environmental review: existing environmental conditions/practices, operational discharges into the sea, the management of produced gas, oil spills, and occupational health and safety. Pecten has been involved in the exploration for and production of hydrocarbons in the Project area since 1974 and experience to date confirms that operations have not impacted the Gulf of Guinea. The Company has prepared an environmental management plan (EMP) which outlines the environmental practices of Pecten and Elf Serepca and addresses, inter alia, the quality of overboard water, drill muds, and oil spills. IFC''s Environment Division has concluded that the Project complies fully with World Bank environmental policies and guidelines. Further details of the results of the environment review can be found in the Environmental Review Summary, the availability of which is outlined below.
The is January 31, 1998 from the Public Information Center.
| Date SPI sent to InfoShop | January 26, 1998 |
“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”
For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (202) 974-4384
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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