Announcement of Mocambique Xai-Xai Joint Press Release September 14, 1987

..,September 14, 1987 Bruce McWilliams IFC Press Release No. 88/09 ":(202) 676-1950 MOCAMBIQUE XAI-XAI JOINT PRESS RELEASE The Ministry of Mineral Resources of Mozambique (MMR), Empresa Nacional de Hidrocarbonetos de Mocambique (ENH), BP Petroleum Development Limited (BP) and the International Finance Corporation (IFC) are pleased to announce the successful conclusion of negotiations with respect to the Xai-Xai contract area offshore Mozambique. BP has been conducting exploration operations in the Xai-Xai concession since the signing of the Production Sharing Agreement in December 1984. As a result of these operations a number of potential hydrocarbon accumulations have been identified, some of which are located in the deep water part (more than 200 meters water depth) of the contract area. Because of the high costs of development and production in such water depths, MMR and ENH have agreed to revise the fiscal terms for deep water discoveries. The negotiation of these revised terms in now complete. In conjunction with this revision of the contract terms, BP has assigned 25 percent of its interest in the Xai-Xai contract to IFC. MMR and ENH have approved this assignment and both Mozambique and BP welcome the involvement of IFC in exploration activities in Mozambique. - MORE - - 2 - With the signing of these new agreements, which took place in Maputo on September 12th, 1987, BP and IFC have elected to extend their exploration operations into the first extension period of their contract and, as a result, BP, as Operator of the Joint Venture, plans to spud the first exploration well in the first half of 1988. If the exploration programme is commercially successful, oilfield development will yield substantial benefits to the Mozambique economy by saving substantial amounts of foreign exchange, boosting export earnings and generating government revenue. Mozambique currently imports all of its crude oil. - END -