WASHINGTON, D.C., Feb. 3--The International
Finance Corporation (IFC) has successfully completed a US$70 million financing
package for Compañías Asociadas Petroleras S.A. (CAPSA), of Argentina,
to assist in the implementation of a secondary recovery program in its
Diadema oil field, located in the Chubut province of Southern Argentina.
The investment will finance a large-scale drilling program and the construction
of surface facilities to support a comprehensive water-flooding scheme.
With average daily oil production of 5,700 barrels in the 1996 fiscal year,
CAPSA is one of the smaller Argentine hydrocarbon producers. After project
completion in the early part of 1998, CAPSA's output is expected to almost
double. The project will accordingly contribute to the development of small
and medium-sized enterprises (SMEs) in Argentina. It will also promote
provincial industrial development in Chubut, one of the country's more
remote and less developed provinces. The investment will potentially generate
valuable export earnings as well as substantial royalty income and tax
revenues for the government of Chubut province.
IFC will provide a US$12 million loan and a US$5 million quasi-equity investment
for its own account, and has finalized the arrangements for a syndicated
loan of US$33 million with international commercial banks. A further US$10
million of loan financing will be extended by DEG - Deutsche Investitions
und Entwicklungsgesellschaft mbH, the German development finance institution.
The balance of the financing will be provided through CAPSA's internal
"The project will make CAPSA a more competitive oil producer by significantly
lowering its average production costs," notes Mr. Sak Kupasrimonkol,
Acting Director of IFC's Oil, Gas and Mining Department. "It will
also lead to more efficient use of the country's natural resources by substantially
increasing the oil recovery factor of the Diadema field," he added.
IFC is a member of the World Bank Group and is the leading multilateral
source of equity and loan finance for private sector projects in the developing