Announcement of India Borrows One Hundred Sixty-Five Million Five Hundred Thousand Dollars for Petroleum Exploration on October 21, 1982

FOR IMMEDIATE RELEASE .World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 83/14 Contact: Hugh Blackman October 21, 1982 (202) 477-3879 INDIA BORROWS $165.5 MILLION FOR PETROLEUM EXPLORATION A $633.8 million petroleum exploration project in India will be assisted by a loan of $165.5 million, the World Bank announced today. This is the World Bank's fourth petro- leum sector project in the country, and brings to $915.5 million World Bank lending for the sector in India. The project area forms part of the Krishna-Godavari basin in eastern India, north of Madras. The basin has the prospect of becoming a major new oil province. The project will assist the Oil and Natural Gas Commission (ON.;C) to focus and accelerate its exploration activities in specific areas of the basin where past exploration has identified highly promi·: · ng commercial potential for oil and gas. The project consists of exploratory drilling of 12 onshore and 16 offshore wells; seismic surveys covering about 1,700 line kilometers onshore and 7,500 line kilometers offshore; and technical assistance in the planning and execution of the drilling program • • One onshore and six off shore blocks adjacent to the project area are also being offered by the Indian government to foreign oil companies for exploration on a production-sharing basis. The exploration pr~gram in the project area will be kept under continuous review and will be revised as new information becomes available. Appropriate industry practices will be followed to protect the safety of the people and the environment. Inadequate supplies of energy have been a major factor hindering India's economic growth. The import bill for crude oil and petroleum products was over $6 billion in 1981/82, representing 70% of the country's merchandise export earnings. The project, by assisting ON:;C to accelerate its exploration program,will substantially aid India's efforts to reduce oil imports. The World Bank loan is for 20 years, including five years of grace, with an interest rate of 11.6% per annum. The loan also carries an annual commitment charge of 0.75% on undisbursed balances and a front-end fee of 1.5% on the amount of the loan. The World Bank has previously made two loans to India, totaling $550 million, for the development of the Offshore Bombay High oil field. Facilities constructed under the first loan are now in operation. Project implementation under the second loan, made in December 1980, to finance later phases of the program is in the advanced stages. A $200 million loan for a Refineries Rationalization Project to modernize, balance, and expand the capacity of four petroleum refineries was approved in April 1982 • • ---------- NOTE: Money figures are expressed in U.S. dollar equivalents.