PAE will use the funds for a project that involves the further development of PAE’s oil and gas assets in the Cerro Dragón block in the Golfo San Jorge Basin and in the Lindero Atravesado block in the Neuquén Basin. The project will include activities covering drilling, secondary recovery, facility expansions, improvements, and parts of the 2015/2016 investment program that will support increasing oil and gas production.
The capital expenditure program for the project is estimated at US$1.5 billion. IFC will lend up to US$100 million for its own account and mobilize up to US$300 million in B loan and Parallel loans. PAE will meet the remainder of its funding requirements through internally generated cash and other financing.
PAE is the second largest oil and gas producer in Argentina and has blocks located in the country’s three major hydrocarbon basins – Golfo San Jorge, Neuquina and Northwest. The company was formed in the state of Delaware between BP and Bridas Corporation for specific oil and gas E&P activities. BP plc owns 60% of the equity interest in PAE, and Bridas owns the remaining 40%.
The project will contribute to growth in a key sector of Argentina's economy with further development of primary energy sources in Argentina.