Benin - Technical Assistance To the Petroleum Sector Project

Document of FILE COPY The World Bank FOR OFFICIAL USE ONLY Report No. P3157-BEN REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE PEOPLE'S REPUBLIC OF BENIN FOR A TECHNICAL ASSISTANCE PROJECT IN THE PETROLEUM SECTOR January 21, 1982 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = CFAF US$1.00 = CFAF 270 1/ CFAF 1,000 = US$3.7 CFAF 1,000,000 = US$3,704 FISCAL YEAR January 1 - December 31 WEIGHTS AND MEASURES 1 cm = centimeter = 0.39 inches 1 m = meter = 3.28 feet 1 m3 = cubic meter = 264 US gallons 1 1 = liter = 0.26 US gallons i Bbl = barrel = 42 US gallons 1 kg = kilogram = 2.2 pounds 1 km = kilometer = 0.62 miles 1 km2 = square kilometer = 0.39 square miles 1 t = ton = 2,205 pounds 1 kW = kilowatt = 1,000 watts 1 MW = megawatt = 1,000 kilowatts 1 kWh = kilowatthour = 1,000 watthours 1 GWh = gigawatthour = 1 million kilowatthours LIST OF ABBREVIATIONS AND ACRONYMS CEB = Communaute Electrique du Benin ECGD = Export Credit Guarantee Department (UK) EIB = European Investment Bank OBEMINES = Office Beninois des Mines et d'Energie SBD = Saga Benin Development S.A. SBEE = Societe Beninoise d'Electricite et d'Eau SDH = Services des Hydrocarbures SNAFOR = Societe Nationale pour le Developpement Forestier SONACOP = Societe Nationale de Commercialisation des Produits Petroliers SPB = Saga Petroleum Benin A.S. UNDP = United Nations Development Program 1/ The CFA Franc (CFAF) is tied to the French Franc (FF) in the ratio of FF I to CFAF 50. The French Franc is currently floating.  FOR OFFICIAL USE ONLY PEOPLE'S REPUBLIC OF BENIN TECHNICAL ASSISTANCE PROJECT IN THE PETROLEUM SECTOR CREDIT AND PROJECT SUMMARY 4~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Borrower: People's Republic of Benin Amount: SDR 7.0 million (US$8.0 million equivalent) Terms: Standard IDA terms Project Description: The project would assist the Government in training Beninese personnel in oil field operations and petroleum exploration, promoting offshore exploration by foreign companies in Benin, and laying the basis for the future second phase development of the Seme field. The project includes the following components: (a) Construction of a training center; (b) Training for about 220 Beninese personnel who would eventually operate the Seme field (in drilling and production operations). (c) Training six Beninese professionals during the period 1981-1983, in order to build a team of capable staff who would advise the Government on technical, eco- nomic, and legal matters related to petroleum explo- ration. (d) Promotion of exploration through: (i) an offshore reconnaisance seismic survey of about 1,400 line-km, and (ii) consultant services to review and interpret existing geophysical and geological data, to prepare and supervise a seismic survey, to promote explora- tion by acreage to oil companies, to review and update an existing petroleum code, to prepare a model petroleum agreement, and, to assist the Government in negotiating exploration agreements and monitoring activities by the oil companies. (e) Consultant services to evaluate the applicability of secondary recovery to the Seme field, and, if war- ranted, prepare detailed engineering of the water injection platform and facilities. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - Project Benefits and Risks: The training program would enable the Beninese to operate the Seme oil field, rather than having it under a full service contract as at present with foreign inputs for even simple labor tasks. This would reduce operating costs and transfer technical knowledge to Benin which would benefit potential subsequent projects. There is a risk that the trained Beninese personnel might migrate to neighboring countries, but this would be avoided by offering competitive salaries. The exploration promotion component would help attract private capital to undertake oil exploration in Benin. The risk of this component is that the data might be insufficiently attractive to spur widespread industry interest. However, given recent energy market conditions, the interest of oil companies, and the existence of the Seme oil field, the exploration promotion is expected to draw a good response from the oil companies.  - iii - Estimated Project Costs: Local Foreign Total