Guinea - Petroleum Exploration Promotion Project

* ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~b Donmm_t of The World Bank FOR OMCIAL USE ONLY MICROFICHE COPY R.eaie No. 10239 Report No. 10239-GUI Type: (PCR) TWEDDLE, E/ X31707 / T9 073/ OEDD3 PROJECT COMPLETION REPORT REPUBLIC OF GUINEA PETROLEUM EXPLORATION PROMOTION PROJECT (CREDIT 1438-GUI) DECEMBER 27, 1991 Industry and Energy Operations Division Country Department I Africa Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their ofricial duties. Its contents may not otherwise be disclosed without World Bank authorization.  LIST OI ACROUTKS BSlCIP Bureau d'Etudes Induutirelles at de Cooperation de l'Institut du P&trole CQL Coopers and Lybrand DH Direction of Hydrocarbons ENSPM scole Nationale Sup6rieure don P6troles et Moteurs a00o Ceophysical Company of Norway AS GKOQUEST American Geophysical company HQI Hydro Quebec International HYDROVENTE a Government-owned sister agency of ONAH KINBK Minist6re de 1'Energie et Konkour6 mmG Minist6re des Mines et G6ologie INREE MinistAre des Ressources Naturelles, de 1'Energie et de 1'Environnement HSGB West African Regional Geological Study ONAN Office National des Hydrocarbones PCIAC Petro-Canada International Assistance Corporation PSA Petroconsultants S.A. SEE Secr6tariat d'Etat A 1'Energie SGH SociSt5 Guin6enne des Hydrocarbures SNE Soci6te Nationale d'Electricit6 SGP/SOQUIP Soci6t4 Guineenne des P6troles  FOR OFCIA USE ONLY THE WORLD BANK Washington. D.C. 20433 U.S.A. Oke of DrectotCGwal Opwatbrn Evaiukmn December 27, 1991 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Guinea Petroleum Exploration Promotion Project (Credit 1438-GUI) Attached. for information, is a copy of a report entitled "Project Completion Report on Guinea - Petroleum Exploration Promotion Project (Credit 1438-GUI)" prepared by the Africa Regional Office with Part II contributed by the Borrower. No audit of this project has been miade by the Operations Evaluation Department at this time. Attachment 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.  FOR OFFICLAL USE ONLY ._,_,.I O. @11133 !TDs 143*-U PROJECT COMPLETIZON RP TABLE OF CONTENTS Pag No. PREFACz .. ........................ * . .iii, EVALUATION SUMMARY ..# . *****e*******................ iv PART I PROJECT RE W FROM BANR PERSPECTIVE L. PROJECT IDENTITY ..... ........ ............ ....... 1 B. BACKGROUND ... ................ ...............*....** 1 C. PROJECT OBJECTIVES AND DESCRIPTION ...................... 2 - Project Objectives ... .................... 2 - Project Description .............................. 2 - Project Design and Organization ................... 3 D. PROJECT IMPLEMENTATION .. ... .................. 4 - Seismic Studies .................. ..... 4 - Geological Field Surveys . .......................... S - Petroleum Legislation .............................. .5 - Oil Companies' Status .................... . 6 - Petroleum Exploration Promotion ................... . 6 - MSGB - West Africa Geological Regional Study ....... 7 - Institut ions ........ ............................... 7 - Training ...................... .. 8 - DR Building .......................... .. 9 - Audit of the Credit Accounts ..... .................. 9 - Disbursements .. .................................... 9 - Procurement .......... ... .. ... ........................ 10 E. PROJECT RESULTS - GENERAL COMiENTS ....................... 10 F. PROJECT SUSTAINABILITY . .................................. 11 G. PERFORHANCE OF THE PARTIES INVOLVED IN THE PROJECT ....... 11 H. PROJECT DOCUMENTATION and DATA ..... . ...................... 12 PART II PROJECT REVIEW FROM BORROWER'S PERSPECTIVE A. INTRODUCTION ...... ..................................... 13 B. BACKGROtND .13 C. PERFORMANCE OF THE PARTIES TO THE CREDIT AGREEMENT 1438-GUI . .14 - PERFORMANCE OF BORROWER (GOVERNMENT OF GUINEA) 14 - PERFORMANCE OF THE BANK ...... 15 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 authorzation  Table of Contents (Cont.) D. Z VALUATION OF THE QUALITY OF WORLD BANK/REPUBLIC GUINEA RELATIONS AND ITS IMPACT ON PROJECT ')NPLEMWNTATION ......... . ......... ... .......... . 15 Z. CONCLUSION .*.* ................................ 17 PART III STATI TICAL PT 1. Project Time-table ................ ............ 18 2. Credit Cumulative Disbursements .. ............. 18 3. Project Implementation ....... *O.. 19 4. Project Costs and Financing ................. .. 20 5. Project Resulte ...... ......................... 21 A. Direct Benefits ......................... 21 B. Economic Impact ...... . . .............................. 21 C. Financial Impact ........................ 21 D. Studies ................................. 22 6. Status of Credit Covenants ................... 22 7. Use of Dank Resources ...... ................... 23 A. Staff Inputs . . .............. 23 B. Missions...... 23  PROJCT COMPLETION REORT REPUBLIC OF GUIE PETROLEUM EXPLORATION PROMOTION PROJECT (CREDIT 1438-GUI) PIUFACE This in the Project Completion Report (PCR) for the Petroleum Exploration Promotion Project in Guinea, for which Credit 1438-GUI in an amount of SDR 7.7 million was approved on January 17, 1984. The Credit was closed on June 30, 1990, three years behind schedule. An undisbursed amount of MDR 0.004 million was canceled and the last disburement was on September 10, 1990. The-PCR was jointly prepared by the Industry and Energy operations Division of the Technical Department (AFTIE), Africa Region (Preface, Evaluation Summary, Parts I and III), and the Borrower (Part II). Preparation of this PCR was started during the Bank's final supervision mission of the project in July 1990, and is based, inter alia, on the President's report, the Credit Agreement, supervision reports, correspondance between the Bank and the Borrower; and internal Bank memoranda.  PROJECT COMPLETION REPORT REPUBLIC OF G ' NEA PETROLEUM EXPLORATION PROMOTION PROJECT (CREDIT 1438-GUI) 9kis~LAirn gbiectives 1. In the early 1980s, as today, oil imports were a serious strain on Guinea' balance of payments. In spite of the efforts made by the Soci6t6 Guin6enne des Hydrocarbures (SGH), a joint venture formed between the Government and the American oil company, Superior Oil, no hydrocarbons had been discovered in the country. The Government was interested in evaluating the hydrocarbon potential of the sedimentary basins of the country, and the Association agreed to grant a new credit to Guinea to that effect. 2. The project consisted of: (a) an exploration promotion component including offshore seismic operations (in shallow water and on the continental slope and shelf) and geological field surveys in the onshore Bowe basin; (b) technical assistance to the Ministry of Mines and Geology (MHG); and (c) legal and economic training for MMG staff. Furthermore, following a Government request, a power-related component was included in the project, aimed at preparing a second Power Project. 3. The total project cost was estimated at USS12.0 million, with a foreign cost component of US$11.6 million. A US$3.6 million amount was granted by Petro-Canada International Assistance Corporation (PCIAC) to finance, in parallel, the seismic program on the continental slope and shelf. Im_lementation Exoerience 4. A preliminary seismic test in the offshore area was carried out in the offshore area. It was found that the sediments in the shallow water zone were not thick enough to warrant the cost of any further seismic program. In March 1986, a seismic survey (1,546 km) was carried out in the shelf area on a speculative basis (i.e. partly financed by the contractor). This survey did not produce any encouraging results. 5. Since the seismic structural results were not encouraging, a seismic-stratigraphy study was carried out on 5,000 km of seismic profiles. A few stratigraphic exploration targets were suggested, but none was clearly defined. It is considered that further seismic reprocessing would be necessary to that effect. 6. Two field surveys were carried out (March/April 1985 and March 1986) and two bore holes were drilled (March 1987 and January 1989 in the Bowe basin in order to collect source rock samples from Silurian outcrops (paragraphs 22 to 23 below). All the results pointed to the overmaturity of the Paleozoic source rocks. In line with the project description, no further detailed survey was carried out. 7. In mid-1984, the promoting company Anglo-Suisse presented an offer covering a large exploration acreage, which included unusually light work commitments. This was turned down by the Government upon the recommendation of its exploration consultants (paragraph 32 below).  - iii - 8. A French firm was contracted in February 1985 to draft a petroleum code (paragraph 25 to 28 below). This law (enacted September 23, 1986) is a production-sharing contract, with no payment of royalties or bonuses, and the inclusion of a possible Government equity participation in came of discovery. hesults 9. The exploration consultants prepared a geological report incorporating previous and new data (paragraph 33 amd 34 below). The conclusions of this report, together with the new petroleum legislation, were presented to the oil industry during the course of two promotional meetings, which were held in Houston (June 16, 1987) and London (June 23, 1987). No proposal for an exploration contract was presented by any oil company. 10. The Project was not successful to the extent that the promotion effort did not yield any oil industry interest. However, the project resulted in: (a) enhanced scientific knowledge regarding the geological charact4ristics of the Guinea offshore basin; and (b) the strengthening of the technical -^-pertise of the Hydrocarbons Directorate (DH) staff. 11. During the implementation of the project, the Association agreed to a request from the Government to finance under the Credit an institutional study of the petroleum subsector (see uaraaraoh 40 blow). The selected consultant's recommendations included: (a) the preparation of a regulatory framework for petroleum activities in the country; (b) concentration of the technical control of these activities within the DH; and (c) an appropriate training program to enable the DH staff to fulfill this task. The consultant prepared the required regulations. These should be streamlined to be adapted to local conditions. Sugtainabilitv 12. The experience acquired by the DH staff in petroleum exploration may not survive long in case of a lasting absence of oil companies, activities. However, the preparation of a regulary framework for petroleum activities in the country, and the initial training received by the DH staff in petroleum products distribution should be the basis of a permanent and beneficial DH's role in the country. Lessons learned 13. The lack of success of the Government in its attempts to attract oil companies to explore the country's sedimentary basins results from the lack of well-supported exploration targets for prospective investors ("conceptual exploration plays" in petroleum industry terms). In order to attenuate the oil industry's negative evaluation of the hydrocarbon potential of the country, it would be necessary to develop such plays, through the implementation of a limited exploration program including mainly seismic data reprocessing (i.e. processing field-acquired seismic tapes through appropriate new technical modelling). 14. In mid-1985, four countries in West Africa (Mauritania, Senegal, Gambia and Guinea Bissau) were preparing a regional geological study including each country's western sedimentary basin. This regional study was known under the acronym NSGB. In November 1985, the Ministry requested the extension of the MSGB regional study to the Guinean offshore sedimentary basin. The NSGB extended study was completed in 1987. However, due to time constraints, and to the involvement of three different consultants, the study was more a juxtaposition of local studies than an actual regional study. Only five reports were sold to the oil industry. The main lessons drawn are that a regional study should be: (a) conceived as such, and not be the result of the initial  - iv - implae ntation of local studies, subsequently integrated; and (b) under the responsibility of only one team of consultants from the start. 15. The implementation of the project under review illustrates the futility, indeed the possible harm, of including acquisition of fresh hard data, such as extensive seismic surve a or drilling of exploration wells, in a promotional project. These exploration tools aim at defining prospects, which oil companies rightly see as their role; it is only necessary to define well-supported conceptual plays in order to attract the oil industry in the exploration of a given basin. Work programs to develop these exploration plays may include utilization of light exploration methods such as reprocessing of existing seismic data, or satellite imagery techniques. 16. As mentioned in paragraph 7 above, the DH's exploration consultants recommended to the Government, with the Bank's agreement, that it not sign a contract with Anglo Suisse. in retrospect, it might have been wiser to encourage the company to negotiate a contract on one portion of the required acreage. The promotional efforts of Anglo Suisse could have been linked to the promotional program carried out by DHi's exploration consultants. Promotional companies should not necessarily be dismissed out of hand. If such a company does not have an established reputation in the oil indnistry, it is advisable - as a last resort - to secure its cooperation under acceptable conditions, rather than eliminating it a prXori from the scene. 17. No governmental unit in the country other than the DH has the authority to control activities in the petroleum subsector. As the DH does not yet have the appropriate competence to fulfill this task, it still requires technical assistance and training. More generally, the Government needs further technical and financial assistance to: (a) adapt DH staff to the petroleum products supply and distribution subsectors; (b) attract oil companies by developing new exploration targets in the Guinean basin, in an environment increasingly marked by a relative worldwide scarcity of exploration acreage; and (c) evaluate the geothermal potential of the country.  PROJECT COMPLEXION REPORT REPUBLIC Oz GUI PETROLEUM EXPLORATION PROMOTION PROJECT (CREDIT 1438-GUI) PART It PROECT REVINW PFROMI SANM' pRSPECTI-VE A. Poimect Idegtitv Name Petroleum Exploration Promotion Project Credit No.: Credlt 1438-GUI RVP Unit Africa Region Country Department I Country Guinea Sector Energy Subsector s Petroleum 1. Despite its mineral and agricultural potential, Guinea's economic performance declined from independence in 1958 until about 1973-74. When the project started, Guinea, with a per capita income of about US$300, was among the least developed countries. 2. Guinea's economic development was hampered by structural problems. The economy was stagnating and the balance of payments was in chronic deficit. The available foreign exchange could not satisfy domestic consumption, service external debt, and finance the capital and recurrent costs of existing and new projects. 3. Within this depressed environment, oil imports were a serious strain on the economy. Oil products supplied, in the early 1980s, 34% of the energy used (the remainder coming from fuelwood). Oil imports in 1980 totaled about 414,000 tons, for an aggregate value of US$52 million, representing about 28% of annual foreign exchange earnings Furthermore, there was considerable suppressed demand, a result of the limited availability of foreign exchange to pay for more oil imports. 4. No oil or gas had been produced in any of the three sedimentary areas of the country, which are: (a) the onshore Bowe basin (8,000 km2); (b) the shallow offshore zone along the coast (10,000 km2); and (c) the continental shelf and slope (over 45,000 km2) in progressively deeper water, from 200 to 4,000 m. 5. The three basins were virtually unexplored. Three companies had conducted limited exploration programs in the country's offshore. Shell carried out airmag and reconnaissance seismic studies in 1969/1970. Between 1974 and 1979, SOQUIP, a joint venture between the Government and a consortium of foreign companies (Buttes, CFP, Naftagas and Japan Guinea Petroleum Co), conducted seismic work of 3,500 line-km and drilled one well, which was dry. 6. In January 1980, the Government and Union Texas Petroleum formed the Soci6te Guin6enne des Hydrocarbures (SGH), an equal participation joint venture, to explore a permit area of 36,000 km2. In August 1980, Superior Oil bought 75% of the Union Texas share in SGH and took on the role of operator. Superior conducted a detailed seismic survey (3,600 line-km) and planned to drill a well, but the drilling was delayed by an offshore border disagreement with Guinea Bissau.  - 2 - 7. The Minintry of Mines and Geology (MMO) (and,since 1984, its petroleum division, the newly created Hydrocarbons Directorate (DR)), was responsible for petroleum exploration. It is also responsible for the country's bauxite production and development of other mineral resources. The power subsector was under the responsibility of the Ministry of Energy and Konkour& (MINEK), which as such controlled the Soci6t& Nationale d "'eutricit& (SNE). The staff of the MMG was mainly trained in mineral -ogy and mining engineering. However, a few specialists had rL ,-d university degrees in petroleum geology and acquired some experxence in petroleum exploration activities by following the exploration activitios carried out in the country by international oil companies. The technical capabilities of the DR nevertheless needed strengthening. S. The distribution of oil products was conducted, under the Ministry of Internal Comerce, by the Office National des Hydrocarbones (ONAH), a monopoly public enterprise created after the natioralization of existing petroleum products distributors. All service stations in the country were Government-owned and run by a sister agency of ONAH, Hydrov-nte. 9. The NMH was interested in evaluating all the areas of the country with hydrocarbon potential in order to attract additional oil companies, in addition to SGH, to conduct oil exploration in the country. Sinc3 relinquishment would occur under the SGH agreement, additional acreage would be available for promotion. The Government therefore requested the Association's assistance for the implementation of this promotional effort. C. Project Obiectives and Doscriotion Proiect objectives 10. The project was conceived to provide technical and institutional assistance to the MMG in support of petroleum exploration promotion aimed at attracting the oil industry to conduct exploration activities in the country's free acreage. This was to be achieved through the acquisition of new seismic data and the integration of the results with previously existing data, in order to demonstrate the hydrocarbon potential of the country to the oil industry. The project aimed also at providing institutional support, through technical assistance and training. 11. A first Power project aimed at rehabilitating the Conakry power system, and provided technical assistance and training for the SNE entitled Guinea - First Power Project, Credit 1085-GUI (Project Completion Report dated May 6, 1988) was carried out between February 1981 and October 1986. Under this credit, a contract for the technical assistance component was signed between Hydro Quebec International (HQI), of Canada, and MINEK to provide SNE with 14 experts in engineering, financial and training fields. This contract was to expire in May 1985, but it was already clear that technical support would be needed for an additional 7.5 months to complete the transfer of know-how to the SNE staff. The Government requested that the financing of the contract to the end of December 1983 be included in the petroleum project. An amount of SDR 970,000 was included to that effect in the project under review. Proiect Descrip_tion 12. The project was organized around three main components: (a) preparation and implementation of a petroleum exploration promotion; (b)  -3- training of MM4 stafft and (c) reinforcemnt of SNE professional capability: (a) The exploration component consisted of the following parts: (L) Exacution of seismic surveys comprising approximately 600 line-km in the shallow water zone, and approximately 3,000 line-km in the continental shelf and slope; (ii) execution of two geological field surveys in the onshore Bowe basin; (iii) organisation of data collected into an information package for promotional purposes; (iv) development of a strategy for promotion of acreage to the oil industry under appropriate commitments and fiscal terms; (v) promotion of acreage to the oil industry; and (vi) negotiation of petroleum exploration and production agreements; (b) The training program comprised: gi) on-the-job training of MKG staff in all aspects of petroleum exploration and production; and (ii) establishment and implementation of a program for training outside Guinea, including all petroleum exploration/development-related matters; and (c) The Power component included strengthening SNE's planning, maintenance, operational, and accounting and commercial capability through the provision of about 105 man-months of consultant services. Proiect Desicn and organization 13. Within the framework of the exploration promotion policy adopted (i.e. including acquisition of hard data), the project was well prepared. Three missions to Conakry paved the way for the project's appraisal. The conceptual foundation of the project was clear and well understood by both the Bank and the Ministry's staff (except for some delicate technical issues difficult for laymen to grasp). The Minister was, however, initially opposed to preparing petroleum legislation, on the grounds that drafting a now petroleum law was a Government prerogative. However, following the policy changes which occurred after the death of the first President of the Republic of Guinea, the conceptual basis of the project was fully understood by the new Minister and objections disappeared. The MHG was the executing agency for the project. 14. Through a PPF advance amounting to US$220,000, MMG was able to contract an exploration consulting firm to review the existing exploration data on the country, and define a petroleum exploration promotion policy. The consultants concluded that, since the country was largely unexplored, substantially more exploration work was needed to evaluate it fully. 15. The consultants recommended taking advantage of the presence of a seismic boat, belonging to the American company Digicon, which was  - 4 - 15. The consultants recomme nded taking advantage of the presence of a seiamic boat, belonging to the American company Digicon, which was operating in the neighboring waters of Guinea Bissau (under the financing of Bank's Credit Cr. 1334-GUB), to carry out an initial reconnaissance survey (165 km) of the shallow offshore. This test would provide information needed to prepare a more detailed seismic program in the same area (600 km) to be financed under the project. The Government requested an increase in the PPF to finance this seismic test program. On April 21, 1983, the Association agr-ed to this request, and the PPF was increased to an aggregate amount of US$1 million. 16. The test seismic lines were acquired in September 1983, and processed during the last quarter of 1983. The interpretation showed that, contrary to initial expectations, the geological section which underlies the cretaceous section is not thick enough in the test area to offer any attractive potential. This exploration finding resulted in the first modification of the project and in the end the Bank did not finance any further seismic surveys in the shallow water area. D PROWECT IHPLh3WIgAOIoN 17. The first phase of the project consisted in acquiring new field data, both in the offshore area and in the BOWE basin. These new data were to be subsequently integrated into the regional study to be presented during the promotional seminars. Seismic Studies 18. Through a PPf advance of an aggregate amount of US$1 million, the Government was able to hire an exploration consulting firm to review the available exploration data, and, on the basin of the consultants' conclusions and recommendations, to finance the execution of a seismic test survey (160 km) in offshore shallow water. 19. The test in the offshore shallow water area was carried out in September 1983, and data acquired was processed by March 1984. It was found that sediments in the shallow water zone were not thick enough to warrant the cost of a full shallow water seismic program. Since their seismic boat was expected to undertake its program in December 1984, PCIAC agreed to include in its program further reconnaissance lines in the shallow water zone, in order to evaluate whether any future seismic program in this zone was justified. 20. According to PCIAC, the results of the seismic program were rather encouraging. However, the Bank cautioned the Hydrocarbon Directorate (DH) against a too optimistic interpretation of the results, because of the lack of: (a) an adequate sedimentary section in shallow water; (b) structural traps within the mesozoic geological section; and (c) significant data about the sediments underlaying the mesozoic geological section in the basin. However, following a recommendation from the Ministry's exploration consultant, a new seismic survey was carried out by the Government to complement the lines shot by PCIAC. This survey (1,546 km) was carried out in March 1986 on a semi-speculative basis (i.e. partly financed by the contractor). This survey did not produce any encouraging results. 21. Since the seismic results obtained did not result in any convincing structural lead, the focus was shifted to more subtle stratigraphic traps, and it was decided to perform a stratigraphic-seismic study on 5,000 km, which was carried out by an American company in mid-1986. This study gave good stratigraphic indications, but did not result in the definition of well supported stratigraphic exploration targets.  Geolcaical Field Survey! 22. A first geological field survey in the onshore Bowe basin was carried out from February to April 1985. A total of 42 samples were collected by a team composed of four Guinean geologists and two geologists from PSA. Analyses of collected samples showed that the Silurian shales, although cooked by volcanic intrusions, are potential source rocks. It was then decided to carry out a second field survey, in order to collect samples for geochemical analysis in areas as distant as possible from volcanic intrusions. The second geological field survey was implemented in March-April 1986: the samples showed a relative abundance of organic matter which, however, had been generally altered either through overcooking or surface alteration. 23. Since the apparent overmaturity of Silurian samples might result from superficial alteration, it was decided to obtain fresh samples by drilling two wells about 50 meters deep. In March 1987, two attempted wells were prematurely abandoned in volcanic rocks. It was then resolved to: (a) thoroughly study the location of further drilling through geophysical surveys, in order to verify the absence of shallow volcanic rocks; and (b) to drill the shallow wells in appropriately selected locations. With equipment obtained from the Direction G6n6rale de la G6ologie, the DH carried out magnetic and gravity studies which led to the location of two shallow wells. Drilling was performed in November 1988. The Tomboya and Tondon wells reached 220 and 114 meters depth respectively. Silurian source rocks in both wells were overmature. 24. In line with the project description, the negative results obtained in the Bowe basin resulted in the termination of the exploration work program financed by the Bank in the basin. The geological field survey targeted at analyzing the maturity of Paleozoic source rocks, which was scheduled during appraisal for October/November 1984, was extended from April 1985 to November 1988, because of the difficulties met in obtaining fresh samples of these source rocks. Petroleum Legislation 25. As mentioned above (paragraoh 13), the Minister did not agree initially to include the preparation of Petroleum Legislation in the project. During negotiations, however, it was agreed, as a compromise between the respective positions of the Government and Bank, to introduce a training program for Government's staff in petroleum contract negotiations. 26. In December 1984, seminars were organized to that effect in Conakry: (a) by the Ecole Nationale Superieure des P6troles et Moteurs (ENSPM) on the petroleum industry; and (b) by a legal consultant on petroleum legislation and petroleum contract negotiations. These were attended by about 20 to 30 persons from the Ministries of Mines and Geology, Finance, Commerce, Planning, Energy and the Central Bank. BEICIP made a well-organized and systematic presentation of the subject. 27. The MMG was impressed by the quality of the presentation, and as the new Minister had expressed a strong interest in developing petroleum legislation for the country the same consultant was retained for that purpose and a contract was signed on February 27, 1985. In June 1985, the consultant propcosed an initial draft of the Petroleum Code and a Model Contract, under two options: production-sharing contract, or joint venture between the Government and the oil companies. In December 1985, the consultant presented a final draft of the proposed petroleum legislation, incorporating the Government's and Bank's comments.  - 6 - 28. Following the Bank's recommendations, the Government opted for the production-sharing model, and the Petroleum Code and a Model Production Sharing Agreement were enacted in September 1986. In order to prepare the petroleum exploration promotion, the Government also published "Guidelines for making applications for production-sharing contracts". Companies were requested to bid on two main items: the amount of working commitments, and profit oil sharing. Oil Companies' Status 29. In late 1984, MOBIL inherited all petroleum rights previously held by Superior Oil in Guinea, including its share in the SGP contract, as a consequence of its take-over of the latter company. 30. The offshore dispute between the Republic of Guinea and the Government of Guinea Bissau was settled by the International Court of Justice, in the Hague, on February 14, 1985. This decision resulted in a 25% decrease in the SGH contract area (from 36,000 km2 to 27,000 km2), and a subsequent extension to May 15,1986, of the SGH agreement. 31. In 1985, MOBIL requested the Government to jointly reassess the contractual obligations inherited from Superior, which included the drilling of an exploration well. MOBIL, however, eventually decided to relinquish the SGH contract area it had inherited from Superior. SGH was finally dissolved in 1986. All information on the MOBIL contract area was then released, and the MKG exploration consultant integrated these data into the geological synthesis report later presented to the oil industry. 32. In mid-1984, the Ministry received an offer from a small promotional company called Anglo-Suisse Co. to acquire the rights over the entire offshore acreage not committed at the time under the existing contract with Superior. However, PSA advised the Government not to enter into a contract with Anglo-Suisse Co. because of the poor work commitments offered, large acreage size and weak relinquishment provision. The Minister decided to go ahead with the petroleum exploration promotion, following which Anglo-Suisse could make a fresh offer, which would then be considered together with all other offers. The company never reiterated its offer. Petroleum Exyloration Promotion 33. The Government's exploration consultant integrated the newly acquired seismic data into the existing geological data, and published a regional report, which was thoroughly reviewed by the Bank. The final report was issued in January 1987. 34. Promotional meetings were held successively in Houston and London in June 1987, an eighteen months' lag as compared with the planned Schedule of Implementation (caused by the long delay necessary to obtain technical data acquired by MOBIL). Although the promotional presentations were well attended, only five companies eventually bought the geological synthesis report as prepared by the MMG exploration consultants (for a total amount of US$90,500), and none approached the Government to negotiate a petroleum exploration contract. This lack of success is mainly due to the absence of convincing exploration targets in Guinea's offshore basin. Depressed oil prices at the time of the promotion may also have acted as a deterrent. 35. In March 1988, the DH contracted a highly qualified exploration consultant, (particularly well-informed about the hydrocarbon potential of the country, since he had previously edited the MSGB report, see paragraph 36 and 37 below), in order to carry out new promotional efforts through visits to a certain number of selected oil companies in  -7- the US. This exercise was not succ-esful. The consultant nevertheless recommended that similar promotional efforts be made to oil companies in Europe. In 1988, a delegation of the DH organized promotional presentations to nine European companies. These demonstrated a stronger interest than the American oil industry, but no concrete proposal from an oil company ever materialized. KSGS - West Africa Geoloalcal Reaional Study 36. In mid-1985, four countries in West Africa (Mauritania, Senegal, Gambia and Guinea Bissau) were preparing a regional geological study including each country's western sedimentary basin. This regional study was known under the acronym MSGB. On November 15, 1985, the Ministry requested the extension of the MSGB regional study to the Guinean offshore sedimentary basin. 37. The MSGB extended study was completed in 1987. However, due to time constraints, and to the involvement of three different consultants, the study was more a juxtaposition of local studies than an actual regional study. Only five reports were sold to the oil industry. The methodology adopted to implement this unsuccessful regional study was analyzed with a view to preparing other regional studies, such as the Red Sea geological study. The main lessons drawn are that a regional study should be: (a) conceived as such, and not be the result of the initial implementation of local studies, subsequently integrated; and (b) under the responsibility of only one team of consultants from the start. 38. In a similar exercise, and within a cooperation agreement concluded between the Republic of Guinea and the Government of Guinea Bissau, both Governments agreed to carry out a joint evaluation of the hydrocarbon potential of a common offshore area on both sides of the border. A work program was designed to that effect, and the Governments are currently looking for external assistance to finance this study. Institutions 39. In mid-January 1985, the Ministry of Mines and Geology, with its powers extended to cover both the petroleum and the electricity subsectors, became the Ministry responsible for Planning and Natural Resources (MPNR). By December 1985, a reorganization resulted in the MPNR changing into a Ministry of Natural Resources, Energy and Environment (MNREE). Finally, in early 1988, the Secretariat d'Etat & l'Energie (SEE) was created within the MNREE. on October 6, 1988, the SEE (which incorporates the DH) was officially designated to carry out the petroleum-related components of the Project. 40. In March 1988, in the context of the privatization of petroleum products distribution activities the Government requested the Bank to finance under the Credit a study of the reorganization of Guinea's petroleum subsector. The DH requested, and obtained the Bank's agreement to contract the French company BEICIP for that task. The firm had both the required qualifications and good experience in the petroleum subsector in Guinea. 41. The consultant submitted a first draft of its report on January 19, 1989, and issued its final report on March 10, 1989. It recommended that the DH's technical activity be extended to the entire petroleum sector, including the technical monitoring of petroleum supply and distribution operations, in particular the much-needed control over safety measures.  42. In February 1990, the Secretary of State for Energy issued directives enlarging the scope of the DH's activity as recomm-nded by SEICIP. However, these now directives are likely to remain meaningless unless the DH receives: (a) appropriate training to give it the capacity to fulfill its expanded task; and (b) the position within the Government which would give it the nece"sary authority to carry out its technical control of petroleum activities in the country. 43. Following a Government request during the last phase of the project (June, 1990), the consultant also prepared regulations governing maintenance of petroleum product storage and transportation facilities. These regulations fill a void, but being based on the French regulations, are too detailed and sophisticated to be immediately applied as such. They need be streamlined to suit the Government's capacity for implementation. 44. During project implementation, and within the framework of the withdrawal of the Government from public sector activities, the Bank also financed consultants to assist the Government in the privatization of ONAH. Lengthy negotiations took place between the Government and a consortium of three oil companies (AGIP, SHELL and TOTAL) with a view to setting up a joint venture (with shares of 49% for the Government and 51% for the companies). 45. The Government's share of the joint venture takes the form of ONAH's assets in Guinea (distribution network in the capital city and in the provinces). The Joint Venture's equity is evaluated at US$11.5 million, of which US$2 million is in cash. 46. The new company, the Societe Guineenne des P6troles (SGP), was officially constituted on December 20, 1990. However, SGP will only take over the supply and distribution of petroleum products in the country over a 21 month period, when most of the relevant facilities have been rehabilitated. In the meantime, the Bank is financing a management contract for ONAH, which is implemented by the firm Coopers and Lybrand (C. & L.). 47. Petroleum storage and distribution facilities are in poor condition, particularly with regard to safety issues, and constitute a permanent danger for the industrial and urban environment. As a priority task, the joint venture will have to rehabilitate these facilities. The cost is such that the Government's share exceeds its initial input, which has obliged it to request external financial assistance. Trainina 48. The most efficient training received by DH staff was their participation in the different surveys (such as GECO seismic survey and the geological field surveys in the Bowe basin) and studies (such as the seismic-stratigraphy study carried out or the geochemical analysis of the samples collected in the Bowe basin) implemented under the Credit. Furthermore, the exploration consultant organized systematic training of DH staff in all petroleum exploration-related issues, including training in computerized data bank utilization. The total training cost under the Credit was SDR 158,765, out of which approximately SDR 40,000 were used to finance a crash course in safety control of petroleum storage and transport facilities. 49. A small cell of geologists and geophysicists within the DH has been trained, able to handle most exploration-related issues. The qualifications acquired nevertheless need to be updated and completed in certain fields, such as seismic-stratigraphic studies. Moreover, the DH  staff requiros significant training in all petroleum activities relating to products supply and distribution. DH Building 50. The Division of Hydrocarbons (DH) had been allocated space in a separate building owned by the Ministry, but the building needed to be rehabilitated, and this space was not large enough to accommodate all the Division's staff including the short-term technical consultants. In May 1985, the Government requested the Bank to finance a pre-fabricated office building for the DH. In view of the DR's urgent need for office &nd storage space, and its effect on project implementation, the Association agreed to the Government's request, and the Credit Agreement was accordingly modified on October 29, 1985. 51. Following a call for bids sent to a short list of companies, the Government proposed to award the building contract to the French company Sopromex, represented by the company Socipra. The contracts were signed on November 5, 1985, and July 7, 1986. On December 20, 1986, the DH took possession of the building. Basic office equipment was provided under the Credit, and by June 1986 the DH staff occupied the new building. Audit of the Credit A:counts 52. The Abidjan office of specialized firm was selected in early 1985 to carry out the annual auditing of the Credit, and to set up appropriate accounting procedures within the DH. Auditing of the project accounts was done regularly, although not always on time. Accounting procedures were set up within the DH, and were satisfactorily applied for most of the time (during a short period in 1987-1988 the emigration at short notice of the DH accountant left the Division temporarily without a book-keeper). Disbursements 53. Variances between planned and actual disbursements reflect the changes to the project work program that occurred during its implementation. AMOUNTS (in SDR) Category Planned (Ref. Credit) Acreement Actual Seismic surveys 3,150,000 489,681 First geological field 390,000 575,509 survey Second geological field 245,000 0 survey Exploration consultants' 1,140,000 3,039,256 services Power consultants' 970,000 2,337,492 services Training 145,000 158,763 Office and garage 0 185,428  - 10 - Refunding of PPF advance 970,000 876,732 (P 187 GUI) Unallocated 690,000 0 Cancelled 37,139 TOTAL 7,700,000 7,700,000 54. Three comments may be made to clarify this table: (a) Since the Association felt that technical assistance to SNE was still necessary beyond the period contemplated during appraisal, and an expenditures on seismic data acquisition were lower than initially expected, it wau decided to finance the necessary assistance to SNE with the savings made from the reduction in the seismic program. This transfer of funds between two categories of the project was terminated upon strong opposition from the DH; and (b) As mentioned above, under paragraphs 20 to 24, the first geological field survey was aimed at evaluating the maturation statua of Paleozoic source rocks in the Bowe basin. However, this evaluation was more difficult than initially appreciated, and two geological surveys and two shallow well campaigns were eventually required. Since the results of this study yielded only negative results, the detailed stratigraphy study, officially recorded in the project description as the "se-ond geological survey", was never implemented. It was through a technical misunderstanding about this geological work program that aome of the corresponding expenditures were recorded in the category "second geological survey". This error has been corrected in the above table. (c) Proceeds of the Credit were reallocated on October 29, 1985, for inserting a new category, providing office and garage facilities for MPNR in the amount of SDR 180,000'. Procurement 55. World Bank guidelines were followed in all steps of the Project, and the evaluation of bids was thorough. Consultants with special qualifications, such as BEICIP for the preparation of Petroleum Legislation, were contracted directly. z3 Proiect Results - General Comments 56. The Project was not successful to the extent that the promotion effort did not yield any oil industry interest. However, the project resulted in: (a) enhanced scientific knowledge regarding the geological characteristics of the Guinea offshore basin; and (b) the strengthening of the technical expertise of the Hydrocarbons Directorate (DH) staff. 57. Variances in the project work program consisted of: (a) the addition to, or subtraction from the project components such as the cancellation of the seismic survey in the shallow offshore region, or the decision to carry out a seismic- stratigraphy study on the shelf area; and  - 11 - (b) modifications to the appraisal schedule, such as the considerable extension of the analysis of the maturation of Paleozoic souree rock in the Bowe basin. 58. These changes resulted from findings due to ongoing exploration, or from some external decision (such as the relinquishment by MOBIL of its acreage), and reflect thorough follow-up of the project, and an appropriate reaction to unfolding developments. However, a few decisions taken during project implementation, such as the country's participation in the MSGB regional study, or the construction of a building for the DH staff, could equally well have been made during appraisal. 59. The geological and geophysical work carried out under the project determined that the onshore and offshore acreage had lses potential for hydrocarbons than was initially expected. During appraisal, these two risks had been contemplated, but they seemed at the time to be outweighed by the potential benefits of a commercial hydrocarbons discovery. 60. The risk of devaluing potential acreage through costly seismic surveys should have led to a consideration of organizing a promotion campaign based on existing data, without resorting to the acquisition of fresh hard technical data. F. Proiect Sustainabilitv 61. The Project resulted in a regulatory framework for petroleum related activities in the country and the strengthening of the technical expertise of the DH staff. Technically supervising the petroleum products supply and distribution is indispensable, in particular in the field of: (a) safety of products storage and transport; (b) protection of the environment with regard to petroleum products storing and handling; and (c) products quality control. If the regulatory frame work is first adapted to local conditions and second enacted, and if the DH receives further training to give it the capacity to enforce the appropriate regulations, the Project will have a long-term and beneficial effect. Gv Performance of Parties Involved in the Proiect Performance of the Borrower 62. The Borrower took full advantage of the training program provided under the project. It always provided the appropriate support and cooperation to visiting consultants as well as to Bank missions. It was consistently open to dialogue with the Association's representatives, which was a key element in the satisfactory implementation of the project. 63. However, the Borrower did not always provide the Association with periodic reports about the implementation of the project, or the required annual audit reports, within the prescribed time frame. Performance of the Bank 64. The key task of the Bank was monitoring the exploration program carried out under the Project, and preparing appropriate recommendations to the Government when unexpected exploration results were obtained. Furthermore, although the decision to carry out a complementary seismic survey on the shelf area may be questioned, the Association assisted the Government in finding a geophysical contractor who agreed to cofinance the acquisition of this complementary seiamic data. The Bank Also  - 12 - monitored closely the implementation of the covenants included in the Development Credit Agrement. Performanc- of consultants 65. All the consultants involved in the implmentation of the Project carried out their tasks satisfactorily in accordance with international industry standards. The most important function, however, was performed by the Government's consultant, who should share the praise (and the censure) given to the Bank, in particular for its swift reaction to new exploration finding. 66. Despite the favorable results listed above, there were certain less satisfactory outcomes which concerned the following: (a) the overstepping of SNE's budget, as established in category 2.d of Schedule 1 of the Credit Agreement; (b) the insufficient budget allocation for training SNE, which received category 2.d of Credit 1438-GUI, prejudiced the Petroleum Exploration Promotion Project by spending SDR 1,367,491.90 more than the SDR 970,000 allocated to it; and (c) this overrun had to be made up by the project, which also had to fund a large number of supplementary studies. 67. The project vianagement and the auditors drew the attention of the appropriate representatives of Guinea and the World Bank to this situation, which jeopardized the continuation of the project and upset its budgetary estimates. Compensation for this overrun was requested but to no avail. G. ProIect Documentation and Data 68. Abundant files regarding the implementation of the project exist in the Bank and were utilized to draft this report. Furthermore, the DH provided all the data and documents necessary to complement the Bank's records.  - 13 - PROJECT COMPLETION REPORT REPUBLIC OF GUINEA PETROLEUM EXPLORATION PROMOTION PROJECT (CREDIT 1438-GUI) PART II a PROJECT RVEW FROM MRRM'S PERIPUCTV As INTRODUCTON 1. In accordance with the recommendations that resulted from the talks hold in Conakry January 23-26 between the World Bank and the Division of Hydrocarbons, we herewith submit Chapter xr of the Completion Report on the Petroleum Exploration Promotion Project in Guinea covered by Credit 1438-GUI. 2. The first part of this chapter, the background, provides an outline of the objectives of the project and its financial structure, while the second part is an integral part of the report itself and focuses on an evaluation of the performance of the parties to Credit Agreement 1438- GUI during project implementation. B. B*ACKGROUND 3. Following a series of negotiations held between November 1979 and January 1984, Credit Agreement 1438-GUI was signed on January 31, 1984 between IDA (International Development Association) and the Government of the Republic of Guinea. The purpose of this Agreement concerning the Petroleum Promotion Project was: (a) to assist the Government of Guinea in its efforts to promote exploration activities in the country's free acreage by international petroleum companies; and (b) to create and maintain in operation a Division of Hydrocarbons (DH) which would be responsible for executing and supervising all exploration and production activities. 4. The project program consisted of four components: a technical component; a promotional component; a training component; and an infrastructure and equipment component. (a) The technical component had three objectives: (i) to conduct seismic surveys offshore, on the plateau and on the continental shelf; (ii) to reprocess some of the seismic data gathered from earlier surveys; (iii) to carry out geological field surveys in the Bowe basin; (b) The promotional component also had three objectives: (i) to develop an exploration promotion strategy; (ii) to provide assistance with this promotion;  - 14 - (iii) to negotiate exploration and production agreements; (c) The primary objective of the training component was to provide project staff with training during project implementation both in Guinea and abroad, in geology, geophysics and also in the economic and legal aspects of the petroleum industry; and (d) The primary objective of the infrastructure and equipment component wau to ensure the efficient operation of the DH through the provision of infrastructure, technical equipment and office facilities. 5. To enable it to carry out this program the Project was the beneficiary of three sources of funding: (a) IDA Credit No. 1438-GUI for SDR 7.7 million, SDR 970,000 of which was allocated to the Socl#td Nationale d'Electricit6 (SNE). This Credit is interest-free and repayable in 50 years with a 10-year grace period; (b) a grant from Petro-Canada International Assistance Corporation (PCIAC) amounting to US$3.6 million. This money has been managed entirely by PCIAC which provided its services free of charge; and (c) a contribution from the Government of Guinea to cover local expenditures amounting to US$400,000. Credit 1438-GUI, initially given a term of three years (1984-87), was granted three extensions and closed on June 30, 1990. C. PERFORMANCE OF PARTIES TO THE CREDIT AGREEMENT 1438-GUI We shall evaluate, in turn, the performance of the Borrower and of the World Bank and also the quality of their relations and its impact on project implementation: Performance of Borrower (Government of Guinea) 6. While the Government of Guinea did, on the whole, fulfill its obligations under the Credit Agreement, including the establishment of a DH, compliance with procedures for procurement, hiring consultants and disbursement etc., there were some shortcomings, such as: (a) its inability to make the necessary premises available to the Project, as provided for in Section 3.10 of the Credit Agreement. This situation caused serious operating and organizational problems which prompted the Government to submit a request to the World Bank for the reallocation of the Credit to allow the construction of offices for the Project; (b) the complexity and sluggishness of administrative channels did not facilitate the provision of counterpart local funds by the Borrower, particularly following the closing of Banques Publiques in 1985 and the transfer of the Project Account to the Treasury; (c) the shortfall in the Borrower's actual participation, which totaled only GF 54 million. (This is well below the amount stipulated in the Credit Agreement, viz. GF 176 million - equivalent to US$400,000); and  - 15 - (d) the Project was seriously affected by the multiplo restructuring operations that took place and which often did not comply with the pertinent provisions of the Credit Agreement, am stipulated in Sections 3.02 and 3.04.b of said Agreement. Performance of the Bank 7. In the course of Project implementation the Bank satisfactorily performed all its obligations under Credit Agreement 1438-GUI. It fully performed its role with respect of the payment of invoices, the reallocation of funds from one category of expenditure to another as and when required, and the monitoring of all the works carried out both in Guinea and by the consultants abroad. 8. The manner in which Bank staff directly involved in the monitoring of the project made themselves available was noted with particular satisfaction. 9. Certain comments still need to be made, however, with respect to the Bank's performance: (a) the delay, averaging two months, which sometimes occurred in the Bank's payment of invoices hindered the start-up of certain works, such as the construction of offices, the regular monitoring of disbursements and the timely calculation of the balance remaining under the Credit; and (b) the Bank's reservations about long-term training for Guinean staff, in accordance with well-established career plans, are also deeply regrettable. In fact the only training provided under the Project was in the form of short-term seminars which did not offer participants any opportunity for specialization. D. 3VALUAMION OF THE OUALITY OF WORLD BAU/REPUBLIC OF GUINEA NRATIONS AND ITS IMACT ON PROJECT IPEMENTATrON 10. Besides conducting its customary missions, the World Bank also played the role of chief adviser on all petroleum-related activities throughout all the phases of Project implementation. This atmosphere of mutual understanding facilitated decision-making on important issues concerning the Project's basic objectives. Also, during the entire Project no contract was canceled and no invoice was left unpaid because of irregularities. 11. Relations between the World Bank and the Guinean Government were thus characterized by an atmosphere of understanding and frank cooperation at all levels and by a sound grasp of the problems in terms of finding positive and optimal solutions. 12. on the whole the Petroleum Exploration Promotion Project in Guinea achieved the objectives assigned to it under the terms of the Credit Agreement 1438-GUI, as confirmed by the following results: (a) establishment of a DH (See Section 3.02 and 6.01 of the Agreement) and the provision of appropriate infrastructure for the operation of this division (offices, vehicles, materials and various types of equipment etc.); (b) acquisition of 3,400 km of new seismic profiles by PCIAC and GECO and also the reprocessing of 6,500 old lines the by  - 16 - Geophysical Development Corporation in the case of the seismic studies and Texas Geophysical Company in the case of the gravimetric analysist and (c) the conducting of two geological campaigns in the Bowe Basin followed by two deep core-drill surveys. 13. Geochemical studies have been made of the samples collected in the course of this work to assess the petroleum potential of the Paleozoic formationss (a) completion of a synthesis study of the potential of the petroleum marketed in 1987 and the holding of two promotional meetings in June 1987, one in Houston and the other in London, with the assistance of P&troconsultants S.A. (Swiss) during which five offshore blocks with a total area of about 50,000 km2 were offered to the international petroleum industry; (b) the preparation and enactment of a petroleum code relating to hydrocarbon exploration and extraction, a standard production sharing contract and an implementing decree, all the aforementioned legislation having been prepared with the assistance of BEICIP; (c) the participation of Guinea in the MSGB (Mauritania, Senegal, Gambia, Guinea-Bissau and Republic of Guinea) regional geological synthesis study; (d) the training of Guinean staff both in Guinea and abroad through their involvement in the studies carried out and through advanced training seminars; (e) the construction of offices for the Project following a reallocation of funds requested by the Government; (f) the completion, at the end of 1988, of the study on the reorganization of the petroleum sector in Guinea with the assistance of BEICIP; and (g) the conducting in December 1989 of the so-called "in-house visit" promotional campaign aimed at European petroleum companies. 14. Despite the favorable results listed above, there were certain less satisfactory outcomes which concerned the following: (a) the overstepping of SNE's budget, as established in category 2.d of Schedule 1 of the Credit Agreement; (b) the insufficient budget allocation for training SNE, which received category 2.d of Credit 1438-GUI, prejudiced the Petroleum Exploration Promotion Project by spending SDR 1,367,491.90 more than the SDR 970,000 allocated to it; and (c) this overrun had to be made up by the project, which also had to fund a large number of supplementary studies. 15. The project management and the auditors, Coopers & Lybrand, each drew the attention of the appropriate representatives of Guinea and the World Bank to this situation, which jeopardized the continuation of the project and upset its budgetary estimates. Compensation for this overrun was requested but to no avail.  - 17 - 16. On the subject of the training of Guinean personnel, not only was the budget allocated, i.e. SDR 145,000, insufficient but there was also a total absence of any career prospects for the people involved. B. CONCgZaQ 17. Implementation of the Petroleum Exploration Promotion Project war extremely worthwhile in terms of the organization and revitalization of Guinea's petroleum sector. 18. Numerous positive elements, such as the further training of DH staff, the significant assets acquired and the volume of technical data obtained on Guinea's offshore and onshore potential etc., all helped to consolidate the spirit of cooperation that exists between the World Bank and the Guinean Government. 19. The few shortcomings that occurred during Project implementation could easily have been prevented had the two parties taken more careful to adhere strictly to the terms of the Credit Agreement, which would have yieldea much more significant results. 20. While one of the most important objectives, i.e. the signing of the hydrocarbon exploration-production contracts, has yet to be achieved, the latest "in house visit" promotional campaign is seen as extremely promising. The Guinean Government and the World Bank must therefore continue to work together to sustain this effort. 21. The standardization and monitoring of Guinea's entire petroleum sector will also be the legitimate responsibility of the DH, and will caLl for additional efforts by the Government to restructure and train staff. 22. It is therefore important for the World Bank to continue its assistance to the Government in the form of a further Credit, which would enable the DH to perform the responsibilities assigned to it more effectively. ..  - 18 - PROJECT COMPLETION REPORT REPUBLIC OF GUINIA PETROLEUM EXPLORATION PROMOTION PROJECT (CREDIT 1438-GUI) PART III: STATISTICAL INFORASTZON 1. Proiect Timetable Date:Planned Date:Revised "a e:Actu First mention in file. 06/14/79 Identification 03/1982 Preparation 04/82 to 03/83 Appraisal mission 09/1982 03/1983 Loan Comnittee 02/1983 08/1983 Negotiation 10/1983 12/12-14/83 Board Presentation 06/1983 11/1983 01/17/1984 Signature 01/31/1984 Effective Date 04/1984 06/19/1984 Credit Closing Date 06/30/1987 06/30/1988 06/30/1990 Credit Completion Date 12/31/1986 06/30/1988 10/30/1990 2. Credit Cumulative DiSbursements US S million FY84 FY85 FY86 L8_7 FY88 FY89 FY90/91 Appraisal 1.5 5.0 7.5 8.0 (cumulative) Actual (cumulative) 0 1.2 5.6 6.8 7.8 8.4 8.9 Actual as % of 24 75 77 89 105 111 appraisal SDR million Appraisal FY84 FY85 FY86 FY87 FY88 FY89 FY90/91 (cumulative) Actual (cumulative) 1.4 4.8 7.2 7.7 Actual as % of 0 1.2 4.9 6.1 6.9 7.3 7.7 appraisal 25 68 79 90 95 100 Comnent: Date of last disbursement was September 10, 1990.  - 19 - 3. Proiect Imglementation Appraisal Actual fty_Tndioators Estimate Estimate Test seismic survey 10/83 09/83 Agreement on training program for 1984 12/83 12/83 Establishment of Hydrocarbons Unit 01/84 01/84 Reprocessing of old seismic data 04/84 04/85 Seminar on Petroleum Legislation OS/85 12/84 Commencement of shallow water 09/84 Canceled seismic program First geological field survey 11/84 03/85 to 11/88 Commencement of seismic program on 01/85 12/84 continental shelf Decision regarding second geological 04/85 07/88 field survey Second geological field survey 10/85 Canceled Employment of accounting consultants 10/85 03/85 Submission of promotion report 01/86 01/87 by consultant Promotional meetings with oil companies 01-02/86 06/87 Closing Date 06/30/87 06/30/90  - 20 - 4. Project costs and Pinancina (a) Proiect costs broken down between categories (Ref. Project Cost as estimated in the Prciident's Report) Ammuta (in us $000) APPrisa EbtUna Rcvbed Etimae Actlud Local Foin Tol Local Foign TOtl LOal Fori Total Exchange Exbcange Exchauge Cow Coat cogs 1. Seoisic Swvey 0 6,300 6,300 0 1,173 1,173 0 4,740 4,740 2. GoocheincaAmldyasiof 0 30 30 0 30 30 0 i1S 115 field sanlc 3. Tewchia Axsistane 90 1,200 1,290 90 1,200 1,290 46 4,070 4,116 COi Exploration Promoon 4. BIecUric Power 30 900 930 90 2,544 2,634 9 2,544 2,553 S. Tmraig 30 150 180 30 IS0 180 5 176 181 6. Material ad Equipmnw 150 200 350 150 200 350 62 226 288 7. Refndidg of PPF advsace 1,000 1,000 0 1,000 1,000 0 1,121 1,121 (P 187 GUI) 8. Coewingeci 100 1,820 1,920 0 3,160 3,160 0 0 0 9. Canelled 32 32 ToUt 400 11,600 12,000 360 9,457 9,817 122 13,024 13,146  - 21 - (b) Proigct Financing Planned (Ref. President's Report) Source Aareement Revised Final Comments IDA 8,000 n.a. 8,838 Difference (838) is due to variations in exchange rate Domestic 400 n.a. 122 Difference due to Government's lack of funds Co-financing 3,600 n.a. 3,600 evaluated: PCIAC financed directly a seismic survey carried out with its own seismic boat Other External Sources 0 586 Total 12,000 13,146 5. Project Results A. Direct Benefits Appraised Estimated at Estimated at Full Indicator Estimate Closing Date Develonment Number of new exploration contracts n.a. 0 0 (If no further promotional effort is carried out) strengthening of DH technical capacity possible realized will progressively decrease if exploration activities are not revived B. Economic Impact Appraisal Actual Estimate (At final develonment) Economic Rate of Return None None Observation: no SAR was prepared. C. Financial Imoact Not applicable  - 22 - D. studies Purpose au defined at appraisal, or during the course Impact of the Studjie of the Proiect Status Study Evaluation of Promotion of completed Reports sold Hydrocarbon acreage for US $90,500 Potential but no contract was signed Seismic Promotion of completed May be useful Stratigraphic acreage completed for future interpretation promotion offshore Geochomical Promotion of completed no result modeling acreage Geochemical Study of completed Conclusions: study: Bowe hydrocarbon overmaturity basin potential of the of source Bowe basin rocks Interpretation Promotion of completed no result of Potential acreage field data PCIAC report Promotion of completed no result acreage Regulations controlling safety completed the DH will concerning issues and need technical downstream petroleum products assistance to petroleum quality control enforce activities regulations 6. Status of Credit Covenants Agreement Covenants Section Comnliance Maintaining a hydrocarbons 2.04 Met unit within the MMG Employing expatriate 3.02 Met consultants Exchanging views with IDA Met regarding promotion strategy 3.03(a) opening of a separate account 3.05(b) Incompletely met Furnishing training 3.06(a) Met program to IDA irregularly Reviewing with IDA results 3.07(a)&(b) Met of the first field survey Preparing periodical reports 3.08(a) Met with occas- ional delay  - 23 - Maintaining separate accounts 4.01(a) Met for SNE component of the project Auditing of project accounts 4.01(b) Met with occasional delay Comments: a separate account in hard currency was opened, into which the revenue from the sale of promotional documents was deposited. However, the DH has not yet been given access to the account. 7. Use of Bank Resources A. Staff Inout Stage of Proiect Cycle Staff Weeks Through Appraisal 30.1 Appraisal through Effectiveness 17.6 Supervision 107 5 TOTAL 155.2 B. Missions Mission Number of Persons Mission Specialization Performance Date SW in the field Place Represented Rating Status (a) Throuch Appraisal 03/80 1 CONAKRY GST 1 10/81 0. LONDON GST 2 01/82 1 CONAKRY GST 1 03/82 3 CONAKRY FA & EC 2 04/82 0.5 LONDON GST 2 10/82 1.5 CONAKRY FA & GST 2 (b) Through Effectiveness 03/83 2 CONAKRY FA & GST 1 06/83 2 CONAKRY FA & LEG 1 (c) SuRervision 02/84 0.5 GENEVA GST 1 05/84 1 CONAKRY FA 1  - 24 - 06/84 1 CONAXRY OST 1 08/84 3 CONAKRY PA & LEG 1 11/84 0.5 CONAKRY PA 1 12/84 1 OONAXRY LEG 1 02/85 2 CONAKRY PA & EGR 1 04-05/85 2 CONAKRY PA & EGR 1 09/85 1 CONAKRY LEG 1 10/85 1 GENEVA GST 1 01/86 3 CONAKRY GST, LEG & EGR 1 07/86 0.5 PARIS GST 1 05/87 1 CONAKRY GST 1 06/87 1 HOUSTON GST & EGR 1 10/87 1 GENEVA GST & EGR 1 03/88 1 CONAKRY GST 1 07/88 2 CONAKRY GST & EGR 1 01/89 1 CONAKRY GST 1 08/89 1 CONAKRY GST 1 01/90 1 CONAKRY GST 1 07/90 0.5 PARIS GST 1 TOTAL Staff Weeks in the Field: 37,5 Key to Specialization: GST = Geologist; EGR = Engineer; LEG = Lawyer PA = Financial Analyst; EC = Economist Key to Status: = 1 No Problem Met during Mission