Announcement of World Bank to Assist Tunisia in Petroleum Exploration Promotion on February 23, 1989

FOR. IMMEDIATE RELEASt )WorId Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 89/33 Contact: Fawzi Rihane (202) 473-2675 WORLD BANK TO ASSIST TUNISIA IN PETROLEUM EXPLORATION PROMOTION WASHINGTON, February 23, 1989 -- To offset a decline in oil production, Tunisia is set to move ahead with a project aimed at developing the country's smaller oil fields. The World Bank is assisting the project with a $5.5 million loan. The project includes acquisition and processing of new seismic data and preparation of technical promotion packages meeting oil industry standards. It will provide the basis for increasing the rate of discovery and development of hydrocarbon resources by attracting participation by private investors in exploration.of prospective areas. The project will also assist the Entreprise Tunisienne d'Activites P6troli6res (ETAP), the national oil company, in strengthening its capacity for assessing hydrocarbon potential and determining exploration investments. -New legislation, enacted in 1987, provides special incentives and a more liberal tax regime to international oil companies interested in small-field development. Oil production is an important part of Tunisia's economy. In 1987, it accounted for 9 percent of its gross domestic product and 20 percent of exports. Total oil production has decreased at an average annual rate of 3.2 percent since 1984. If current trends continue, Tunisia could become a net oil importer in the next four years. The World Bank loan is for 17 years, including five years of grace, with a variable interest rate, currently 7.65 percent, linked to the cost of the Bank's borrowings. It .also carries an annual commitment charge of 0.75 percent on the undisbursed balances. Note: Money figures are in U.S. dollar equivalents.