Announcement of World Bank Assists Petroleum Exploration in Honduras on June 2, 1980

-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. 80/ll l June 2, 1980 WORLD BANK ASSISTS PETROLEUM EXPLORATION IN HONDURAS The World Bank will assist Honduras' efforts to find a domestic supply of petroleum. The Bank has approved a $3 million loan to help finance a petroleum exploration promotion project in Honduras, which represents a first step in Bank assistance to the development of the country 1 s petroleum sector. With an estimated total cost of $3.65 million, the project will support the government's efforts to discover petroleum by encouraging foreign oil companies to explore the most promising offshore areas of Honduras. It will also strengthen the government's capability to negotiate and supervise exploration contracts, and to improve its energy planning. Honduras is highly dependent on petroleum imports. Imported petroleum meets about 80% of Honduras' commercial energy requirements and hydropower the • remaining 20%. Petroleum imports represent a growing burden on Honduras' balance of payments and account for about 13% of total imports. The country's total oil import bill rose from about $26 million in 1973, to about $112.6 million in 1979, or about 15% of total merchandise exports. The most promising area, the northeast offshore, has been only lightly explor- ed, and the results of past and current exploration efforts are inadequate to establish the petroleum potential of Honduras. The exploration promotion project includes technical assistance and training for the staff of the General Directorate of Mines and Hydrocarbons in the Ministry of Natural Resources. It also covers computer processing of data, equipment and materials, and consultant services to review the country's petroleum pricing and taxatton system and the status of current studies of alternate energy sources. The $3 million loan to the Republic of Honduras is in line with a World Bankprogramestablished in January 1979 t0 accelerate petroleum production in the developing countries. The loan is for a term of 20 years, including 5 years of grace, with interest at 8.25% per annum . • NOTE: All money figures are expressed in U.S. dollar equival~nts.