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Argentina
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Public Enterprise Reform Project
In 1991, the World Bank approved a US$23 million loan to help the Government carry out its Public Enterprise reform program, which included the restructuring and privatization of the state oil and gas companies and strengthening of the Government's regulatory capabilities. Following liberalization, IFC helped mobilize private sector financing for local and international investors in the oil and gas sectors. The results have been impressive, and today Argentina's oil and gas industry is considered one of the most competitive and efficient in the world. Oil and gas production have increased, and the country has turned from a gas importer to a gas exporter. The sector, which used to be a drain on state resources, is now a significant generator of taxes and other incomes to Government.
Argentina: Huantraico
In two separate financings, IFC helped Petrolera Argentina San Jorge (San Jorge) a privately owned Argentine oil & Gas company (acquired by Chevron in 1999) develop, appraise, and explore the Huantraico Block in the Neuquen Basin. IFC invested $27 million in equity to fund its 15 percent share in an unincorporated joint venture with San Jorge. IFC also provided a $15 million loan to San Jorge and mobilized an additional $30 million from commercial banks. The IFC loans, together with a Eurobond financing, were used to help fund San Jorge's 85% share of the development of the El Trapial field within the Huantraico Block. The El Trapial field is the largest oil discovery ever made in Argentina by a domestic private company and was at the time the first only significant oil discovery resulting from the privatization program launched by the Argentine government in 1985. The current production from the El Trapial field, is around 55,000 barrels per day.
Since its entry into the venture, IFC has provided San Jorge with ongoing assistance and advice regarding its financial restructuring, co-financing, and hedging arrangements. In FY96 IFC's board approved a further equity investment of $26.4 million to help finance the further exploration/appraisal and development of oil fields in the Neuquen basin also operated by San Jorge. Today San Jorge is Argentina's 4th largest oil producer and second largest crude exporter.
At the time of IFC Board approval, Argentina's daily oil production stood about 490,000 barrels of oil per day. Today Argentina produces over 750,000 barrels of oil per day and San Jorge as the 2nd largest exporter of crude oil, has made significant contributions to Argentina's export earnings and to regional integration through its crude sales to Brazil and Chile.
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