Announcement of IDA Lends Sixteen Million Dollars for a Gas and Oil Engineering Project in Bolivia on May 19, 1980

· FOR IMMEDIATE RELEASE .;\/arid Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 IDA NEWS RELEASE NO. 80/73 May 19 , 1980 IDA LENDS $16 MILLION FOR A GAS AND OIL ENGINEERING PROJECT IN BOLIVIA The International Development Association (IDA), the World Bank's affiliate for concessionary lending, has approved a $16 million credit for a gas and oil engineering project in Bolivia. With a total cost of $41 .8 million, the project will be a necessary and important step for Bolivia to increase significantly its gas exports and hence its foreign exchange earnings. The PtoJect aims to establish by 1982 whether there are sufficient reserves of natural gas in the provinces of Santa Cruz, Chuquisaca, and Tarija to enable Yacimientos Petrolfferos Fiscales Bolivianos (YPFB), the State Petroleum Corporation, to cover the future requirements of Bolivia's expanded domestic market and gas exports to Brazil, as well ~s the existing contracts for gas exports to Argentina. The IDA credit will also help the initial phase of a secondary recovery (water injection) program in the Monteagudo oil field (Chuquisaca), one of the most important in Bolivia. • Appraisal drilling of 14 wells in five gas fields will deiineate the extent of these fields and their reserves. Al ,600-1 ine kilometer (km) seismic survey in an area north and northwest of the city of Santa Cruz de 1a Sierra, the processing and interpretation of the data gathered in this survey and those gathered in a previous survey of 700-line km in the Chaco region, and reprocessing and reinterpretation of additional data gathered in another previous survey of about 250-line km are included in the project. This component wi11 help in the selection of the drilling location for the 14 we11s. The initial phase of the Monteagudo secondary recovery project is expected to increase production of crude oil and help determine the optimum system of water injection for the subsequent phase or phases of water flooding in the rest of the field. Under the project, five to seven of the existlng we11s wil1 be converted into injection wells, some eight producing wells will be worked over, about 15 shallow water supply wells will be drilled on the banks of the Banados river, and water supply 1 ines and equipment for a water treatment p1ant will be purchased and installed. The project also includes an engineering study of the Bolivia-Brazil gas pipeline and a study of the Bolivian gas market. The IDA credit of $16 million is being made to the Government of Bo1 ivia for a term of 50 years, including a 10-year grace period. It bears no interest, but ~arries a service charge of 3/4 of 1% per annum to cover • administrative expenses. The Inter-American Development Bank is making a paral- lel 1oan of $16 mi11 ion for the same purpose. The remainder of the project financing is being provided by YPFB from its own internal resources. NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T E C HN I CAL DAT A PROJECT: COUNTRY: TOTAL COST: Gas and Oil Engineering Bo 1 iv i a $41 . 8 mi 11 ion • IDA FINANCING: $16 mill ion, standard IDA terms OTHER FINANCING: Inter-American Development Bank (IDB), $16 mill ion; Yacimientos Petrolfferos Fiscales Bolivianos-YPFB (State Petroleum Corporation), $9.8 million IMPLEMENTING ORGANIZATION: Yacimientos Petrol(feros Fiscales Bolivianos (YPFB) Casilla401 La Paz, Bolivia PROJECT DESCRIPTION: The project consists of: (a) appraisal drilling and seismic surveys to prove whether there are sufficient reserves of natural gas to meet requirements of the Bolivian domestic market, ongoing gas sales to Argentina and a project of gas exports to Brazil, and (b) an initial phase of a secondary recovery (water injection) project in the Monteagudo oil field ~ to increase production and to help determine an optimum system of water injection for the subsequent phase or phases of the project. PROCUREMENT: Procurement for the seismic survey has been contracted in advance under 1 imited international tendering and will be partially financed by the IDA credit; retroactive financing of up to $700,000 for expenditures after July 1, 1979 would be available. Other goods and services to be financed by IDA will be procured under international competitive bidding (ICB), except for small contracts to be procured under YPFB's normal procedures. The IDB loan will finance the procurement of drilling contracts and other se~vices and materials. CONSULTANTS: Local and foreign consultants have been, or will be contracted by YPFB to assist in the project implemen- tation. ESTIMATED COMPLETION DATE 1982 - 0 - •