Press Releases


IFC:  Brigid Janssen
Phone:(202) 458-4698
Fax:(202) 974-4384

EBRD:  Véronique Cassegrain
Phone:  +44 171 338 7237

WASHINGTON, D.C., February 17, 1999 --- The International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) will each invest up to US$200 million (Euro 180 million) in the Early Oil Project to develop the offshore Chirag Field in the Caspian Sea.

The Early Oil Project, undertaken by affiliates of 11 international oil companies and the State Oil Company of the Azerbaijan Republic (SOCAR), includes the refurbishment of an existing offshore platform, drilling wells and building subsea pipelines as well as installing terminals in Azerbaijan and Georgia and repairing and completing two oil pipelines, through Azerbaijan to the Russian border and to Supsa, Georgia. Production commenced in November 1997 and is currently over 80,000 barrels of oil per day.

This project is the first stage of the development of the Chirag, Azeri and Deepwater Gunashli field complex, which is expected to cost a total of US$10-12 billion (Euro 9-11 billion) and result in the ultimate recovery of over 4 billion barrels of crude oil. Production is forecast to reach more than 800,000 barrels per day in the next 10 years.

"The kind of long-term financing that the EBRD and IFC provided has not previously been made available to the region", said Kevin Bortz, Deputy Director of the EBRD's Natural Resources team.  "The commitment of the EBRD and IFC will send a positive signal about financing projects in the region."

Dimitris Tsitsiragos, IFC's principal investment officer, said that the project is designed to encourage private investment, and increase oil production which has decreased dramatically in the region.  The financing will contribute to economic development in Azerbaijan, Georgia and Russia while adding to local energy supply.

The EBRD and IFC will each provide financing of up to US$200 million (Euro 180 million) of which up to US$100 million (Euro 90 million) will be syndicated. The facility will be provided by way of five separate loans by each of the EBRD and IFC to affiliates of BP Amoco plc, Exxon Corporation, Lukoil Joint Stock Company, Turkiye Petrolleri A.O, and Union Oil Company of California.

Citibank, Dresdner Bank and Société Générale acted as Co-Arrangers and each contributed US$25 million (Euro 22.5 million) to the syndicated loans.

IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilising capital in the international financial markets, and providing technical assistance and advice to governments.

The EBRD was established in 1991 following the collapse of communism to aid the transition from centrally planned to market economies in central and eastern Europe and the Commonwealth of Independent States.  The EBRD is owned by 60 shareholders: 58 countries, the European Investment Bank and the European Community, and operates with Euro 20 billion in authorised capital.