Announcement of Petroleum Development in Benin to Benefit from IDA Credit of Eight Million US Dollars on February 18, 1982

· f O'R IMMf DIATE RELEASE " • • \ • a •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477 ~1234 IDA NEWS RELEASE NO. 82/34 Contact: Pamela Brennan February 18, 1982 (202) 477-5344 PETROLEUM DEVELOPMENT IN BENIN TO BENEFIT FROM IDA CREDIT OF $8 MILLION Benin will be provided with technical assistance to strengthen the government agency responsible for petroleum exploration and exploitation, the International Development Association (IDA) announced today. A credit of SOR 7 million ($8 million) has been approved by the World Bank affiliate. Development of Benin's Seme field, located about 15 kilometers offshore, is already underway. Under a full service contract with a Norwegian firm, SAGA Petroleum, a11 tasks are being carried out by expatriates. To reduce these operating costs, the IDA credit will finance the training of about 110 Beninese personnel of the Office Beninois des Mines et d'Energie,B.P. 249, Cotonou, Republic Populaire du Benin. A training center will be constructed in Benin. The Seme oilfield was discovered in 1968 by Union Oil. Negotiations of • a concession contract with Union, and subsequently other private companies failed, because the prospects were marginal at the prevailing oil prices. In 1979, the government decided to develop the field on its own, mostly with funds from abroad, primari1y from Norway. The first well is expected to be spudded in June, and crude production to start in September 1982. Five production wells are planned for the first phase. Consultants will be hired to evaluate enhanced recovery methods and, if warranted, to prepare detailed engineering for the second-phase, under IDA financing. Currently, no oil companies hold exploration rights. The prospects for attracting offers for prospecting elsewhere in Benin's sedimentary basin is considered excellent because, in addition to the existence of the Seme field, important oil deposits have been discovered offshore in neighboring countries. Apart from working with the development of the Seme field, consultants will review and interpret existing data, prepare and supervise a seismic survey, review petroleum legislation, and assist with negotiations and the monitoring of company activities. In addition, six Beninese professionals will be trained in the technical, economic, and legal matters related to petroleum exploration. The European Investment Bank will provide up to $350,000 for a reservoir engineering study. The IDA credit to Benin is for 50 years with 10 years of grace; it is interest-free but carries a 3/4 of 1% a year service charge to help • cover IDA administrative costs . NOTE: IDA credits are denominated in SDRs (Special Dra'1ing Rights), which are valued on the basis of a 11 basket 11 of currencies. The U.S. dollar equivalent of the SOR amount of the IDA credit reflects the exchange rates existing at the tilllf! of negotiation of the credit.