Announcement of Equatorial Guinea to Use IDA Technical Assistance Credit for Petroleum Exploration on December 2, 1982

0 ii FOR IMMEDIA TE RELEASE \ '. ..World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.•Telephone: (202) 477-1234 IDA NEWS RELEASE NO. 83/25 Contact: Pushpa Schwartz December 2, 1982 (202) 477-:-5306 EQUATORIAL GUINEA TO USE IDA TECHNICAL ASSISTANCE CREDIT FOR PETROLEUM EXPLORATION Technical assistance for petroleum exploration in Equatorial Guinea will be provided by an SOR 2.3 million ($2.4 million) credit from the International Develo,ptlent Association (IDA). The credit will be used to provide consultants to assist the country in strengthening the administration of the petroleum sector and in establishing an energy sector information system. This first operation of the World Bank's affiliate for concessionary lending in Equatorial Guinea's energy sector will expand technical assistance currently provided under two grants from the United Nations Development Programme (UNDP), for which the World Bank has been the executing agency. Consultants hired under the IDA project should.be in place by the time the UNDP grants are fully disbursed in mid-1983, thus assuring continuity for the • projects • Equatorial Guinea's energy resources are little developed, although past offshore drilling has encountered encouraging oil deposits. The total value of petroleum imports to the sub-Saharan country is estimated to have been $8 million in 1981, equivalent to about 30 percent of that year's foreign exchange earnings. The government is therefore eager to increase its foreign exchange earnings through the production and export of petroleum. Under the project, exploration consultants will evaluate the country's hydrocarbon potential as addit.ional geological data are obtained during the 1983-85 period. Consultants will also assist in evaluating the financial and technical aspects of exploration contracts and in monitoring exploration- related information submitted by oil companies. Equipment and facilities necessary for the Department of Petroleum Affairs' initial operations will also be provided. Reliable statistical information hither.to 1-scking on the sector will be collected through an energy consumption survey and other means. As a · result, the government, with the help of consultants provided under the project, will establish a data system on the country's energy output, imports, and demand. In addition, a consultant for project administration will assist with procurement and disbursement matters, project accounting, and liaison with non-resident consultants. The IDA credit is for SO years, including 10 years of grace; it • carries no interest but bears a small annual service charge (0.5% Qn the undisbursed balances of the credit and O. 7 5.% on the disbursed balances) • NOTE: IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a "basket" of currencies. The U.S. dollar equivalent of the SDR amount of the IDA credit reflects the exchange rates existing at the ti~ of negotiation of the credit.