Announcement of IFC Help to Finance Hidra Development Venture in Argentina February 25, 1987

Wednesday, February 25, 1987 Monique Amaudry I EPress Release No. 87/44 (202) 676-9331 IFC HELPS FINANCE HIDRA DEVELOPMENT VENTURE IN ARGENTINA The International Finance Corporation is investing $80 million in a joint venture to help finance the first commercial development of an offshore oil discovery in Argentina. The project, which entails an investment of fixed asset of about $250 million, will bring on stream an initial production of 27,000 barrels of oil per day, representing more than 5 percent of Argentina's petroleum consumption. IFC, which is affiliated to the World Bank Group, is the leading private sector multilateral institution which provides equity financing and long-term loans to private enterprises in developing countries. The venture partners are Bridas Austral S.A., a subsidiary of Bridas S.A.P.I.C., one of Argentina's leading private oil exploration and production companies; Deminex Argentina S.A., a subsidiary of Deminex-Deutsche Erd6lversorgungsgesellschaft m.b.H., an international oil company from West Germany; and Total Austral, a subsidiary of Total Compagnie Francaise des Petroles from France. Total Austral is the venture's operator. IFC is providing a $55 million senior loan and a $5 million subordinated loan for its own account. In addition, IFC is currently promoting the project in the market to secure participations from commercial banks and extend its total available loan from $60 million to $80 million. The Corporation helped mobilize funds for the project in conjunction with the Argentine debt rescheduling. - MORE - - 2 - Located off Tierra del Fuego, in the southern tip of Argentina, the project consists of construction of two offshore well-head platforms, an onshore treatment plant and loading facilities. Construction will take two years and production should begin at the end of 1988. The project will have a strong positive impact at a critical time for Argentina's petroleum sector and will instill greater confidence in Argentina's ability to confront its large foreign debt while supporting the country's economic growth. - END -