Washington, D.C., June 18, 2003—The
International Finance Corporation, the private sector arm of the World
Bank Group, announced a $40 million loan investment to support the exploration
and production operations of Queiroz Galvão Perfurações S.A. (QGP), the
oil and gas subsidiary of Queiroz Galvão S.A., a diversified Brazilian
business group. The IFC financing will support QGP’s investment program
that includes the development of a significant domestic gas discovery in
Brazil’s north-eastern region as well as exploration and appraisal in
several other concession areas in the country.
“IFC’s investment in Queiroz Galvão Perfurações S.A. represents our support
to a growing local E&P company in the recently liberalized oil and
gas sector in Brazil. QGP has demonstrated an active response to the liberalization,
having acquired participating interests in eleven oil and gas concessions
in the country; several of these also lie in the relatively less developed
north-eastern region,” said Rashad Kaldany, IFC Director of Oil, Gas,
Mining and Chemicals Department.
Mr. Antonio Augusto Galvão, Director of Queiroz Galvão Perfurações S.A.,
said: "It is very important to our company to obtain a loan like this
one that IFC is providing. Exploration and Production is a long-term business
and with the projects we have in our portfolio, we need credit lines with
repayment schedules that meet our cash flow projections. We hope this deal,
which is the first we make with IFC, is the beginning of a long term relationship,
that will play a fundamental role in our growth strategy.”
The Queiroz Galvão Group, founded in 1953 in Recife, Pernambuco, is a successful
business group from Brazil’s Northeast. Starting in construction and engineering,
QG has actively participated in developing large scale industrial and infrastructure
projects in Brazil. It is also participating in public infrastructure concessions
related to hydropower, roads, water supply and sanitation. In oil and gas,
the Group was traditionally engaged in provided drilling services and has
subsequently diversified into oil and gas exploration and production activity.
Other group interests include industry, farming, trade and financial services.
“IFC’s investment in Queiroz Galvão demonstrates our continued commitment
to work with private companies that are dedicated to investing in sectors
that are important to the economy. We recognize the group’s active participation
in making local project investments in infrastructure and energy, and are
pleased to launch our partnership with the Queiroz Galvão group”, said
Bernard Pasquier, IFC Director for Latin America and the Caribbean.
IFC has worked actively to support the development of a sustainable private
sector in Brazil. With a US$1.23 billion portfolio, Brazil is the
largest IFC client in Latin America and worldwide. In 2002, IFC played
a critical role in providing much-needed long-term finance to Brazilian
enterprises, and in supporting trade finance facilities for export companies.
At that time flows of international capital had declined and economic growth
was slow. IFC’s emphasis has therefore been to continue to facilitate
access to finance for private sector investments.
The mission of IFC (www.ifc.org)
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, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
Since its founding in 1956 through FY02, IFC has 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 worldwide committed portfolio
as of FY02 was $15.1 billion for its own account and $6.5 billion held
for participants in loan syndications.