Mauritania - Petroleum Exploration Promotion Project

Document of FILE COPY The World Bank FOR OFFICIAL USE ONLY Report No. P-2951-MAU REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE ISLAMIC REPUBLIC OF MAURITANIA FOR A PETROLEUM EXPLORATION PROMOTION PROJECT August 6, 1981 This document has a restricted distribution and may be used by recipients only in dhe performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = Ouguiya (UM) US$1.00 = UM 47.00 UM 1 million = US$21,276 WEIGHTS AND MEASURES Metric System ABBREVIATIONS BEICIP Bureau d'Etudes Industrielles et de Cooperation de l'Institut Francais du Petrole CE = Energy Unit (Cellule de l'Energie) DMG = Directorate of Mines and Geology HS = Hydrocarbon Service MME = Ministry of Mines and Energy PPF = Project Preparation Facility SNIM = Societe Nationale Industrielle et Miniere SMCPP Societe Mauritanienne de Commercialisation des Produits Petroliers ISLAMIC REPUBLIC OF MAURITANIA FISCAL YEAR January 1 to December 31  FOR OFFICIAL USE ONLY ISLAMIC REPUBLIC OF MAURITANIA PETROLEUM EXPLORATION PROMOTION PROJECT CREDIT AND PROJECT SUMMARY Borrower: Islamic Republic of Mauritania Amount: SDR 2.6 million (US$3.0 million equivalent) Terms: Standard Project Description: The project would assist the Government-s efforts to intensify hydrocarbon exploration and to establish planning for the energy sector. The project includes: (a) an exploration component comprising: (i) technical assistance to the Directorate of Mines and Geology (DMG) (68 man months) to promote Mauritania's petroleum potential to oil companies, to negotiate exploration contracts with oil companies and to monitor the activities of operating companies; (ii) training of DMG staff; and, (iii) construction of DMG facilities. (b) energy studies. Benefits: As a result of the exploration promotion component, information on Mauritania's hydrocarbon potential would be improved and the Government would be in a stronger position to attract private foreign capital to undertake intensive hydrocarbon exploration. The energy studies would enhance the Government's capacity to assess development priorities and to develop appro- priate policies for the energy sector. Risks: The risk associated with the exploration component is that the projects presented to companies may not be attractive enough for them to enter into exploration contracts. In view of the companies' expressed interest this risk is considered small. The risk of not even- tually finding exploitable hydrocarbon deposits is substantial but is considered acceptable because of the large potential benefits to the country from a hydrocar- bon discovery. 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 - Estimated Cost: The cost of the proposed project (net of taxes), including refinancing advances under the Project Preparation Facility (PPF), is estimated at US$3.2 million equivalent. Foreign costs are estimated at US$2.8 million (about 88 percent). A summary cost table is shown below: Foreign Local Total Exploration Component Consultant services 1,305 /1 180 1,485 HS Facilities and equipment 450 120 570 Training 55 - 55 Subtotal 1,810 300 2,110 Energy Studies Consultant services 370 /2 40 410 Training 25 - 25 Subtotal 395 40 435 Base cost 2,205 340 2,545 Physical contingencies 170 25 195 Price contingencies 425 35 460 Total contingencies 595 60 655 TOTAL 2,800 400 3,200 Financing Plan: Foreign Local Total ------