Washington, D.C., June 14, 2004—The
International Finance Corporation, the private sector arm of the World
Bank Group, announced a $45 million investment in Egypt’s growing natural
gas sector. The investment will support the exploration and production
operations of Merlon Petroleum Companies of Egypt, subsidiaries of Merlon
Petroleum Company, a Houston-based oil and gas company.
IFC’s financing consists of long-term loans of $30 million for its own
account and $15 million in syndicated loans. IFC loans of $20 million for
its own account, for the first phase of the project, were signed on June
8, 2004. The remaining IFC A loan and syndicated loans will be signed in
the second phase.
Merlon Egypt has actively explored the El Mansoura and Qantara concession
areas in Egypt since 1998 with natural gas discoveries last year in the
El Mansoura area, demonstrating the presence of gas reserves in a region
relinquished by other parties. IFC’s investments will help Merlon bring
these gas discoveries into production as well as conduct further appraisal
and exploration. Merlon Egypt has a 50 percent interest in the El Mansoura
concession and a 54 percent interest in the Qantara concession.
Rashad Kaldany, IFC Director for Oil, Gas, Mining, and Chemicals, noted,
“I am very pleased that IFC is partnering with Merlon Petroleum Company.
This investment will promote domestic gas consumption as a clean and convenient
fuel. Companies such as Merlon are important participants in Egypt’s gas
sector, helping develop domestic gas reserves to meet the country’s growing
demand, contributing additional revenues, and creating employment and opportunities
for use of local goods and services.”
Noting that the hydrocarbons sector in Egypt is a strong source of foreign
investment and an important contributor to the country’s GDP, Sami Haddad,
IFC’s Cairo-based Director for the Middle East and North Africa, observed,
“This investment is in line with IFC’s strategy to work with private
companies that are active in critical sectors of the economy. I am impressed
with Merlon Petroleum Company’s strong dedication to its operations and
its experienced team in Cairo, composed significantly of Egyptian nationals.”
Merlon Egypt is deeply committed to environmental and social sustainability.
Working closely with IFC, it has developed and established a comprehensive
environmental and social management system that will serve as a framework
for the environmental and social management of project activities.
James Kishpaugh, Chairman and CEO of Merlon Petroleum Company, said, “Good
hydrocarbon potential and the professional and forward looking petroleum
sector in Egypt, led by Minister Sameh Fahmy, together create an environment
that encourages private investment by companies like ours. However, the
scale of work we are undertaking also requires significant capital investment.
The IFC recognizes these facts and fills a much needed role that allows
us to complete our project and contribute to Egypt’s success.”
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.
From its founding in 1956 through FY03, IFC has committed more than $37
billion of its own funds and arranged $22 billion in syndications for 2,990
companies in 140 developing countries. IFC’s worldwide committed portfolio
as of FY03 was $16.8 billion for its own account and $6.6 billion held
for participants in loan syndications.