Neuquen Basin

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Summary Of Project Information (SPI)Project NameArgentina-Neuquen Basin    RegionLatin AmericaSectorProject No007182Projected Board DateMarch 29, 1996Company NamePetrolera Argentina San Jorge S.A. (San Jorge)Technical Partner and/or Major Shareholders San Jorge, an independent Argentine exploration and production company. It is a member of the Bolland Group of companies, which has been involved in the manufacturing and distribution of petroleum equipment and materials and in providing oil company services in Argentina, since the 1930s.Project Cost Including proposed IFC investment US$190 million, including US$80 million in past costs. IFC proposes to acquire a 15% participating interest in the Project for up to US$25 million.Location of project and Description of site Provinces of Neuquen, Mendoza and Rio Negro, all within the Neuquen Basin.Description of Company and Purpose of Project (include IFC role/development impact) The Project, undertaken in the form of Unincorporated Joint Ventures between San Jorge, IFC and international oil companies, involves the appraisal and early development of the recent oil/gas discoveries in the Confluencia and Rio Negro Blocks (the Discoveries), the rehabilitation of the El Sauce oil field within the El Sauce Block, and the continued exploration of the El Sauce, Zapala, China Muerta, Estación Cervantes, Laguna Blanca, Rio Negro and Confluencia Blocks, located within the Neuquen Basin. The development of the Discoveries will contribute to increasing Argentina’s hydrocarbon reserves and maintaining hydrocarbon production at current levels. IFC’s participation will assist San Jorge move towards becoming a mature oil company. Although the fourth largest oil producer in Argentina today, it still remains an emerging company by both Argentine and international standards. The success of the project and the continued growth of San Jorge will have significant developmental impact by creating important secondary and tertiary employment opportunities, particularly through the various oil field services provided by local contractors in remote and economically underdeveloped regions with little or no other employment opportunities Finally, in addition to its socio-economic impacts, the project will generate significant monetary benefits for both the provincial and federal governments in the form of taxes and royalties.Environmental Category and Issues This is a category B project according to IFC''s environmental review procedure. Environmental issues associated with this Project include hydrocarbon contamination as a result of past activities and the Project''s compliance with the Government of Argentina''s Energy Secretariat''s environmental requirements for the management of produced gas and water, reserve pit cleanups and environmental impact studies. The Sponsors have completed environmental baseline studies of the existing contamination and environmental programs for the blocks which have been developed including reduction in gas flaring in compliance with the Government of Argentina Energy Secretariat’s requirements. The Project is expected to comply fully with World Bank environmental and health and safety guidelines, as well as with the requirements of the Argentine government.The is from the Public Information Center.Date SPI sent to PIC      February 28, 1996For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 676-0365Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).