Project Western Oil

cancelled

Translated version of this PSD: Russian The EBRD has approved in principle an equity investment of up to US$ 50 million in Petrolinvest S.A., a Warsaw exchange listed company, the owner, through exchange for shares with Kazakh partners, of a number of highly prospective oil licenses in Kazakhstan. The EBRD investment is contingent upon conversion of a convertible loan, disbursement of which is entirely contingent on a number of conditions precedent relating to third party co-investment and collateralisation. The funds would be used for the development of Petrolinvest’s oil licenses with partners to include Total, major world-wide integrated oil and gas company headquartered in France. The operation is intended to enable one of few medium-sized, independent operators in Kazakhstan to complete second stage oil exploration works in two of its most relevant prospects (OTG and EMBA), and adopt best practice corporate governance standards in preparation for an IPO on the London Stock Exchange targeted for 2011. Contingent arrangements for further exploration drilling and farm-in with Total were concluded prior to signing. The Project remains in structuring phase, subject to further geological study and evaluation. More widespread private ownership The Company is one of the few small private exploration and production (E&P) companies in Kazakhstan, in a sector dominated by the state-owned company Kazmunaigaz where even foreign majors have struggled at times to maintain concession terms. By investing in the Company, the Bank expects to contribute to strengthening the private sector in the oil & gas upstream sector. Setting standards for corporate governance and environmental conduct Through potential its representation on the Company’s Supervisory Board, the Bank will be able to promote further improvements in the corporate governance and transparency standards at the Company level in view of listing on the LSE by 2011. In addition, the Bank will require that the Company publishes its payments to the Kazakh authorities associated with extractive activities in line with EITI standards, meets the requirements of the LSE Combine Code of corporate governance, and adopts and fulfils a corporate code of conduct to be agreed with and monitored by the Bank. In addition, the Bank has promoted simplification of the corporate ownership structure and will push to maintain and further improve EHS procedures. Petrolinvest S.A. is a trader of liquid gas managing a small portfolio of exploration opportunities in Russia and Kazakhstan. Total is a major world-wide integrated oil and gas company headquartered in France. Equity investment of up to US$ 50 million in Petrolinvest, contingent upon conversion of a convertible loan, disbursement of which is entirely contingent on a number of conditions precedent relating to third party co-investment and collateralisation. US$ 180 million indicative exploration programme. Categorised B/1 (2003) as the environmental and social issues associated with the exploration and testing work can be readily identified and mitigated. Environmental and social due diligence for this project was carried out during the summer of 2008. This included site visits by an EBRD environmental specialist and audits carried out by an independent environmental consultant (IEC). An Environmental and Social Action Plan was prepared by the IEC and agreed with the client. The project sites are located in sparsely populated areas with relatively low environmental sensitivity. Consultation with local communities was carried out in accordance with Kazakh law and EBRD requirements. The most significant issue is associated with the management of drilling wastes and the action plan commits the client to developing and implementing an integrated waste management plan within one year of signing. The action plan also requires the project to carry out “Category A” due diligence (i.e. a full ESIA), consultation and disclosure prior to the start of any full field development work. None. Bertrand Le Guern Petrolinvest S.A. ul. Podolska 21, 81-321 Gdynia Poland