Petroceltic International

cancelled

The project entails financing a number of capital expenditures within  already developed and  producing conventional gas fields in Egypt (at the El Mansoura and the El Mansoura Extension onshore concessions) and in Bulgaria (at the Galata offshore concession). It will also finance the implementation of enhanced safety and other operational upgrades at associated plant and equipment at the above Egyptian concessions during the period 2013 to 2015. The re-financing of existing investments will include: (i) 5 development wells and the installation of compressor units in Egypt and (ii) the tie in of the Kaliakra well and initial expenses for the completion of the Kavarna East well in Bulgaria. Investments in 2014-2015 will include: (i) 1 development well at the El Mansoura Extension concession and a program of safety upgrades aimed at modernising, integrating and fully automating control systems in Egypt and (ii) the tie in of the Kavarna East well in Bulgaria. The project aims at improving recoveries from mature gas fields and achieving higher operational safety standards. Domestic gas production is a key factor for energy security and CO2 emission reduction in both countries covered by the project. The project will generate positive transition impact through: (i) supporting one of the few independent oil and gas companies operating in Egypt and the only material natural gas producer in Bulgaria; and (ii) setting higher business conduct, environmental, social and health & safety standards. Petroceltic International Plc (“PCI”), an international oil and gas exploration, development and production company headquartered in Dublin with operations focused in North Africa, the Black Sea and the Mediterranean Basin. PCI is listed on the Alternative Investment Market (“AIM”) of the London Stock Exchange and on the Enterprise Securities Market (“ESM”) of the Irish Stock Exchange. Up to USD 100 million reserve based loan participating in an existing club deal with commercial banks and the IFC. USD 100 million, split in equal parts between Egypt and Bulgaria. Categorised B. The environmental and social due diligence (“ESDD”) consisted of the review of the Environmental Impact Assessments (“EIAs”) and environmental review documents previously completed for a number of facilities in Egypt and Bulgaria; ISO 14001 re-certification audit reports; PCI’s management system and procedures and emergency response plans for various facilities; as well as a number of environmental, health & safety (“EHS”) management procedures for a drilling contractor. The Bank also conducted a site visit to a number of facilities. PCI is currently in the process of streamlining corporate and country-level procedures. ESDD to date identified that Project activities will take place within developed and producing fields and therefore potential impacts will be site-specific and localised. Proposed safety upgrades should provide tools for a better diagnosis of integrity issues and reduce the risk of blow-outs and accidents. Temporary impacts will occur during the construction phase including increased noise and dust levels; generation of waste; and increased water turbidity and silting during the completion of a well in Bulgaria. These impacts could be readily mitigated through the implementation of an Environmental and Social Action Plan (“ESAP”). PCI’s activities in Egypt are located in the Nile Delta, which is an important bird area. ESDD identified that no field baseline surveys were conducted at the time of the EIAs and instead desk-top studies were prepared using scientific data which in some cases was quite obsolete. The ESAP will incorporate a requirement to conduct biodiversity surveys and mapping to rule out any adverse impacts from ongoing or any future activities. The Egyptian facilities are also located within an agricultural area and land is leased from local farmers on a long-term basis with compensation paid annually. The amount is established by the Ministry of Agriculture. Farmers whose land is leased by PCI are offered employment, typically as watchmen. PCI has a Corporate Social Coordinator in place and sponsored the construction of a religious school, the modernisation of a hospital in Egypt and a care centre for disadvantaged children in Bulgaria. While PCI is making good efforts to manage community relations, there is a gap between State-defined compensation procedures in Egypt and high visibility Corporate Social Responsibility Initiatives. In particular, no census and socio-economic surveys are performed and the compensation methodology does not take into account the number of people in each household dependent on any given land plot. The ESAP will include a requirement to develop a Livelihood Restoration Framework in order to ensure additional assistance is provided to affected households. Health & safety issues are well-managed at the fields. The ESAP will recommend improvements to address fire safety at some facilities where no automated fire response systems are available. It is recommended that PCI conducts fire risk assessments and, on that basis, takes appropriate steps. Tank farms where oil and condensate is stored have a secondary containment, which will prevent any risk of spills. The ESAP will incorporate improvements in the handling of chemicals, particularly in certain contractor-operated facilities where chemicals and fuel barrels are stored on unpaved surface. Regular soil sampling is also required to monitor the quality of soil and allow for an early identification of any contamination, given that facilities are located on high quality agricultural land which will need to be restored to its original state upon relinquishment. PCI keeps an inventory and regularly reports its greenhouse gas emissions on its website. PCI has robust well decommissioning and abandonment procedures in place. Emergency response plans are comprehensive and regular drills take place. The ESAP will recommend that such drills also include local communities to ensure their safety in case of an accident. Community safety can be further enhanced by a mandatory requirement for fencing of drilling sites and produced water pits to avoid any unauthorised access or falling into the pits of people and animals. Mitigation measures for all identified impacts, along with implementation deadlines and responsibilities, will be included in the ESAP, which will need to be agreed with PCI prior to Board submission. The submission of an annual environmental and social report will be required, including a detailed report on progress with the ESAP implementation. None.