Press Releases

IFC Announces $17 Million Investment in Galata Gas Field Development in Bulgaria

Elika Trifonova
Phone:  (202) 458 8357

Fax:  (202) 974-4384


Washington D.C., December 20, 2002—The International Finance Corporation (IFC) and Black Sea Trade & Development Bank (BSTDB) will provide US$34 million to Petreco Sarl and Petreco Bulgaria EOOD (subsidiaries of Melrose Resources plc), to support the companies’ development of the Galata Gas Field in Bulgaria. IFC and BSTDB will provide $17 million each.

The Petreco companies, under a concession agreement with the government of Bulgaria, will develop the natural gas field located offshore Varna, in the Black Sea. The loans from IFC and BSTDB will go toward financing an offshore platform, new production wells, an 83 km pipeline to transport the gas, and associated facilities. The project will support recent efforts of the government of Bulgaria to encourage foreign investment in oil and gas exploration and production.

The two Petreco companies are wholly owned subsidiaries of U.K. listed Melrose Resources plc which is based in Edinburgh. Melrose is an independent energy company engaged in the exploration, development, and production of oil and natural gas. It currently has operations in Egypt and in the USA. In Bulgaria, in addition to the development of the Galata Field, it is active in two offshore exploration blocks.

Robert Adair, executive chairman of Melrose, said, “We are excited about the development of the Galata Gas Field. This will be a culmination of our efforts in Bulgaria over the last three years and is a testament to our commitment to the country’s gas sector. We have greatly benefited from IFC and BSTDB’s involvement by drawing on their expertise in the oil and gas sector. This financing and association with IFC and BSTDB will not only help complete our current projects but also reflects their confidence in Melrose as a growing and capable energy company.”

Khosrow Zamani, IFC’s Director of South East Europe, said, “The Galata Gas Field project, which will rely for its implementation to a great extent on the highly skilled labor force in Bulgaria, should yield numerous benefits for the country, including royalties, taxes, and employment opportunities, as well as flag Bulgaria’s gas sector as an attractive opportunity for foreign investors.

Rashad Kaldany, IFC’s Director of Oil and Gas, said, “We are extremely pleased about partnering with Melrose in Bulgaria, where the government has been trying to reform the energy sector. The project, by enabling domestic production and third-party access to the gas transportation network, will contribute toward opening up the sector in line with the government’s objectives.”

Vitaly Lisovenko, BSTDB Vice President, commented “The Galata project contributes to implementation of the BSTDB mandate in the Black Sea region. It will have direct development impact in Bulgaria, as well as a regional co-operation fostering effect - Ukrainian and Greek companies have already been selected as suppliers for the project. We are happy to find good partners in the private sector to assist reforms in Bulgarian economy, and to further develop our cooperation with IFC in the Black Sea region.”

IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through the close of the last fiscal year on June 30, 2002, IFC committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries.  IFC's committed portfolio at the end of FY02 was $15.1 billion for our own account and $6.5 billion held for participants in loan syndications.