Perez Companc - Venezuela

completed

PCV operates directly and indirectly four oil and gas fields in Venezuela. Each contract has a twenty year term period. Summary details are: Oritupano-Leona, a Second Round operating contract signed in 1993. La Concepcion, Mata and Acema - all third round operating contracts signed in 1997.The Oritupano-Leona and La Concepcion Fields are operated directly, whereas the Mata and Acema fields are operated indirectly through subsidiaries. PCV has also secured two (gas) exploration contracts with the government of Venezuela in the San Carlos and Tinaco blocks. These contracts are still in an early exploration phase.PCV has a strong track record of operations in Venezuela. The company has increased oil production on the fields it operates from 13,800 bpd to 74,800 bpd. Furthermore, PCV has demonstrated its ability to be an efficient operator through a very successful reserves replacement and reserves addition efforts. The company''s operations are well regarded by both PDVSA and the government of Venezuela.PCV has requested IFC assistance in funding capital expenditure to increase production in each of the fields it operates. The funds will be used for drilling a new producer and water injector wells, the construction of new field facilities, and workovers on existing wells.PCV plans to increase production in each of the fields, thereby enhancing the economic value of each field. Benefits to Venezuela include royalties, national and local taxes and the efficient utilization of a marginal fields. The fields are all located in rural areas and constitute a major source of employment for residents in those areas. IFC will fulfill the following key roles in this project:Supporting Pecom, a regional player, in accessing financing to develop the substantial reserves that it has in the region. Besides Argentina, Pecom''s regional interests span from Venezuela, to Bolivia, Ecuador, Peru and Brazil. Venezuela now contributes 26% of the Group’s total oil production and is an important contributor to Pecom’s growth in this business. Pecom is an existing IFC client. In the current macro environment, IFC’s support for its project in Venezuela will lead to a more efficient use of scarce capital by Pecom and support its growth. All PCV’s operations have primarily been funded through equity despite the fact that they are mature fields with strong reserves. Pecom acknowledge that future capital expenditure must be funded through loans which will release scarce capital to support projects in other parts of the region. Supporting a client that endorses the principles related to sustainable development. PCV has already secured ISO 14001 certification and is committed to implementing best practice environmental and social policies.