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IFC INVESTS IN GUATEMALAN OIL PRODUCER


Mauricio Perea
(202) 473-7997
Navin Mahajan
(202) 473-0741


WASHINGTON, D.C., June 21 -- The International Finance Corporation (IFC) has approved financing of up to US$14 million in Basic Petroleum International Limited, Central America's biggest oil producer, which is listed on the NASDAQ National Market System in the United States. The IFC financing consists of a loan of up to US$10 million and an equity investment of US$4 million in the company. IFC, which has already disbursed its equity investment and now holds a 5 percent stake in the equity of Basic Petroleum, is also arranging a syndicated loan of up to US$6 million from international commercial banks. The project will cost an estimated US$33 million and will help the company expand its oil production by 30 percent, from the current level of 8,500 barrels per day (bpd) to a peak of 11,200 bpd. Basic Petroleum will also construct a 120-kilometer oil pipeline with a capacity of 10,000 bpd to transport crude oil from its Xan field in northwest Guatemala, which produces 80 percent of the company's current output,
to its mini-refinery at La Libertad. The oil is presently transported by truck at high cost. The new pipeline will help the company save more than US$5 million annually in trucking costs. "The project will make Basic Petroleum a more competitive oil producer by lowering its production and transportation costs," notes Mr. M. Azam K. Alizai, Director of IFC's Oil, Gas, and Mining Department. "It will also mitigate the adverse environmental impact of the company's extensive trucking operations, especially the high levels of dust and emissions." IFC is a member of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries.