Inventory of EBRD-financed fossil fuel projects,
1992 to
present
ARMENIA
Type of Industry: 300 megawatt oil/gas power plant
Subsidized Project: Hrasdan Thermal Power Plant-Unit 5
Location: 60 km north of Yerevan, Armenia
Owner of Project: Energy Ministry
TNC Involvement: In February 1997, Armenia requested bids for contractors to complete the
construction of the power plant; eventual foreign ownership of this plant is likely.
EBRD Financing: $57 million.
Date of Approval: April 1993.
Additional financing: Japan Import-Export Bank; Armenian government.
Notes: The project involves construction of a 300MW combined oil and gas-fired power plant and
a 72 kilometer transmission line. Although the EBRD approved the loan in 1993, construction has
not yet begun. The EBRD held up disbursement of the loan while Armenia considered re-starting its
Chernobyl-type Medzamor nuclear power plant. In 1997, the Armenian government said the nuclear plant
would close by 2004 if Hrasdan Unit 5 were completed in two years. Armenia also announced this year that
it would begin privatizing its energy sector, and will seek transnational bidders for existing power companies.
Hrasdan Unit 5 will be the first privately-owned power plant in the country.
Sources: EBRD; International Gas Report, April 30, 1993; Asia Pulse, June 20, 1997;
Reuters, April 12, 1997; International Market Insight Trade Inquiries, Feb. 20, 1997;
EIU ViewsWire, May 5, 1993 and April 25, 1995; Nucleonics Week, Sept. 15, 1994.
BELARUS
Type of Industry: 65 megawatt gas-fired power plant
Subsidized Project: Orsha Power Plant
Location: northeast Belarus
Owner of Project: Ministry of Energy
TNC Involvement: GEC-Alsthom (joint-venture between GEC (UK) and Alsthom (France), providing
two turbines and electrical equipment purchased with this loan.
Amount of Financing: $45 million
Date of Approval: December 1993
Additional Financing: None
Notes: This loan secured GEC-Alsthom's first contract to build a power plant in Eastern Europe. The
power plant's natural gas fuel will be imported from Russia. Construction is due to be completed in 1998.
Sources: EBRD; Russia Express-Perestroika, January 17, 1994;
EIU Business Eastern Europe, January 3, 1994, May 13, 1996; The
(London) Times, May 2, 1996; AFX News, May 1, 1996;
AFP, May 1, 1996.
BULGARIA
Type of Industry: 215 megawatt coal-fired power plant
Subsidized Project: Maritza East II Power Project-Unit 8
Location: 240 km southeast of Sofia, Bulgaria
Owner of Project: National Electric Company of Bulgaria
TNC Involvement: While Bulgaria has invited bids from foreign
corporations for the supply of equipment and services for this project,
no specific corporate involvement has been reported in the media.
Amount of Financing: $46 million
Date of Approval: June 1992
Additional Financing: European Investment Bank.
Notes: The EBRD is financing the completion of the 215-megawatt
lignite-fired power plant (Unit 8) within the Martiza East II power
complex; the loan also funds the construction of an ash disposal site
and rehabilitation of coal handling facilities for the entire complex.
The new unit will tap into local coal mines which hold an estimated
two billion tons of lignite, or soft coal, which are expected to be
burned for national energy needs for the next 100 years.
The project was delayed while the EBRD and World Bank pressured
the Bulgarian government to raise electricity rates. The Maritza
coal-fired power complex, of which this is one piece, accounts for
20% of Bulgaria's power production. The Bulgarian government plans
to continue to boost coal-fired power production to fuel industrial growth.
It is planning to rehabilitate 17 old coal-fired power plants by the end of
the decade. The EBRD is considering additional loans for the Martiza
complex.
Sources: East European Energy Report, July 22, 1993,
August 25, 1995; EBRD Watch, September 14, 1992; Reuter
Business Report, Dec. 9, 1993; April 25, 1995, Sept. 11, 1995; Dec. 13,
1995; International Market Insight Trade Inquiries,
August 11, 1997.
GEORGIA
Type of Industry: 1,800 megawatt oil and gas-fired power plant
Subsidized Project: Gardabani Thermal Power Plant
Location: Gardabani, outside Tiblisi
Owner of Project: Sakenegro, Georgia's power utility
TNC Involvement: Foreign owners to be sought; GEA Energy System
(India) sold $3.4 million condenser tube cleaning system under EBRD loan;
AO Leningradski Metallichesky Zavod (Russia) sold $1 million turbine
replacements under EBRD loan; Siemens (Germany) won a contract to
provide emergency repairs under a German government program.
Amount of Financing: $18.1 million
Date of Approval: December 1994
Additional Financing: World Bank ($52 million credit approved in
June 1997); German government (Kreditanstalt fur Wideraufbau, $14 million
loan in 1995); government of Georgia ($4.8 million).
Notes: Gardabani, Georgia's main power source, is an aging complex
of oil and gas-fired power units. As of June 1997, only three units, with
a combined operating capacity of 620 megawatts, were running, with the
rest of the plant suffering from disrepair. Gas comes from either
Turkmenistan or Russia. The U.S. Agency for International Development
has also shipped oil from the U.S. to Gardabani. The EBRD loan was the
leading edge of a wave of foreign government attempts to rehabiliate and
privatize this power plant.. The government of Georgia is developing a
privatization program, with Gardabani and its 1,800 megawatts of
potential fossil fuel power generation capacity to be one of the first
pieces to be sold.
Sources: EBRD; Journal of Commerce, Oct. 5, 1995
Manchester Guardian Weekly, June 11, 1995; International Market
Insight Reports, June 6, 1997. EIU Business Eastern Europe,
March 4, 1996; EIU ViewsWire, June 20, 1995; Power Generation
Technology & Markets, June 13, 1997; Independent Power Report,
May 16, 1997; Russia Express Briefing, Dec. 9, 1996.
HUNGARY
Type of Industry: Natural gas storage (150 million to 350 million
cubic meters/annual flow)
Subsidized Project: Zsana Gas Container Project
Location: Zsana
Owner of Project: Hungarian Oil and Gas Ltd. (MOL), state-owned
TNC Involvement: Nis-Naftagas-Promet (Yugoslavia), owner of gas
Amount of Financing: $55 million
Date of Approval: December 1994
Additional Financing: World Bank ($27 million, loan approved in
1989)
Notes: MOL is building a new underground gas storage facility
in depleted gas wells. The facility will be Hungary's second largest
gas storage facility and will hold up to 1.2 billion cubic meters of
gas per year after its planned completion in 2000. The gas will be owned
by NisNaftagas-Promet of Yugoslavia, which will pour 150 million cubic
meters/year of gas into the Zsana wells initially, with this flow
reaching 350 million cubic meters/year. The gas will be imported from
Russia. Bankers considered the EBRD loan to be a "vote of confidence...
about the upcoming privatization of MOL," according to the Budapest
Business Journal.
Sources: Budapest Business Journal, April 1, 1994, March 31,
1995, June 17, 1996; East European Energy Report, November 18,
1996; MTI Econews, Nov. 6, 1996
MACEDONIA
Type of Industry: gas pipeline (1.4 billion cubic meter annual
throughput)
Subsidized Project: JP Gasificacjia
Location: Skopje
Owner of Project: JP Gasificacjia (GA-MA) a state company in
charge of importing and transporting natural gas
TNC Involvement: Company to be offered to international bidders.
Construction: Uraltransgas (Russia), Bulgargas (Bulgaria), Pietro
Fiorentinni (Italy); Gazprom (Russia, gas supplier).
Amount of Financing: $33.9 million.
Date of Approval: December 1996.
Notes: The EBRD funded pipeline project is designed to bring
Russian gas into Madedonia's capital city area and, eventually, other
cities. It is also designed to foster the privatization of GAMA.
EBRD is supporting privatization by taking an equity stake in the company.
The main 100 kilometer pipeline, which opened in August 1997, taps into
Russian gas via pipeline connectors in Bulgaria, Romania and Ukraine.
The capacity of the pipeline is greater than Macedonia is expected to
need; the excess is planned to be forwarded to Serbia and Albania.
This pipeline project may be carving a path for a future Bulgaria to
Albania pipeline for crude oil from Azerbaijan, Russia, and Kazakstan.
The initial consumers of the Russian gas in Macedonia were a chocolate
factory, a tannery, a chemical plant and a brewery.
Sources: EBRD; International Gas Report, May 10, 1996,
January 24, 1997; Eastern Europe Energy Report, March 19, 1996,
September 1, 1997.
MOLDOVA
Type of Industry: Oil terminal (2.1 million tons/year)
Subsidized Project: Giurgulesti oil terminal
Location: Giurgulesti, 220km southwest of Chisinau, capital
Owner of Project: Terminal
TNC Involvement: Terminal is a Moldovan-Greek joint venture
between Technovax (Greece), Tirex Petrol (Moldavia)
Amount of Financing:$14.8 million of $29.6 million
Date of Approval: December 1996
Additional Financing:Technovax, The National Bank of Greece,
The Commercial Bank, The General Hellenic BankV
Notes: The EBRD is funding the development of an oil terminal
and pipelines on the Danube River. The oil will likely come from
Iran, with whom Moldavia recently signed a deal to import 2 million
tons of oil within five years. The German Dresdner Bank is backing
the oil purchase with a $50 million loan. Construction is expected
to be completed by 1999.
Sources: East European Energy Report, August 25, 1995,
May 24, 1996; December 20, 1996; International Market Insights and Trade
Inquiries, March 7, 1997; Russia Express Briefing, July 29,
1996.
POLAND
Type of Industry: Power plant generator manufacturing plant
Subsidized Project: ABB Dolmel
Location: Wroclaw, Poland
Owner of Project: Asea Brown Boveri
TNC Involvement: Asea Brown Boveri (Switz/Sweden)
Amount of Financing: $6.6 million
Date of Approval: December 1992
Notes: The EBRD loan funded the expansion of a generator
plant in Poland owned by energy giant Asea Brown Boveri. This
factory, taken over by ABB in 1990, makes generators for hydroelectric
and fossil fuel-fired power plants, mainly in Poland and other Eastern
European countries. Poland, which is looking to rehabilitate 32,000
megawatts of power capacity, is a prime target of ABB's equipment sales
plans. In 1994, ABB won a $363 million contract to replace two 200
megawatt coal-fired power plant generators at the Turow, Poland,
power plant with two 235 megawatt generators. Glen Liddy, an engineering
analyst in London, told the Budapest Business Journal this year that,
"in Europe, ABB is shifting manufacturing capacity out of Germany,
Switzerland and Sweden to low-cost neighboring countries, and it's more
likely they'll be going further east, not west, in the next three or
four years."
Sources: EBRD; Financial Times (London), Nov. 8, 1994,
June 26, 1996, June 19, 1997; The Warsaw Voice, December 13, 1992;
Budapest Business Journal, June 16, 1997; Polish Press Agency,
April 29, 1992.
ROMANIA
Type of Industry: Coal-fired power plant rehabilitation (1,400
megawatts)
Subsidized Project: Regia Autonoma de Electricitate (RENEL,
state utility)
Location: throughout Romania
Owner of Project: RENEL
TNC Involvement: GEC/Alsthom (UK/France joint-venture) Potential
suppliers/investors: Lahmayer (Germ), ABB (Switz/Sweden); Amoco (U.S.)
Amount of Financing: $90 million.
Date of Approval: November 1995
Additional Financing:World Bank, EIB, PHARE, USAID.
Notes: The EBRD joined the World Bank's program to restructure
and reequip Romania energy sector its 1995 loan for the rehabilitation
of four power plants. The loan also targets upgrades at three
transmission substations, and encourages private investment.
At the urging of EBRD and the World Bank, RENEL is undergoing
privatization; the government is now encouraging fossil fuel power
plant investments by foreign corporations, such as ABB and Amoco.
According to an October 8, 1997, EIU ViewsWire report, "US oil firm Amoco and Swiss-Swedish ABB are currently building
a greenfield power plant, with EBRD money." However, no record of EBRD
lending for such a plant could be found in other literature.
Sources: EBRD; World Bank; East European Energy Report,
November 27, 1995; March 19, 1996; Europe Energy, December 1,
1995; Financial Times, June 19, 1997; Euro-East, December 19,
1995; EIU ViewsWire, October 8, 1997.
Type of Industry: Oil field developments
Subsidized Project: Petrom S.A. (Formerly Societatea
Nationala de Petrol, Romania's national oil company).
Location: throughout Romania.
Owner of Project: Societatea Nationala de Petrol
TNC Involvement: Amoco, Shell, Enterprise Oil and Occidental
hold oil exploration concessions in Romania.
Amount of Financing: $26 million (additional $300 to $400 million
pending)
Date of Approval: September 1992.
Additional Financing: World Bank.
Notes: One of the EBRD's first fossil fuel loans was a $26
million package for the purchase of new equipment and spare parts
for three oil fields (Berca, Braila and Gaesti) in Romania. Romania
hosts considerable reserves in the Black Sea. The EBRD released the
loans one month after the Romanian government awarded exploration
concessions to oil transnationals Amoco, Shell, Enterprise and Occidental.
Since this initial loan in 1992, the EBRD has been pressuring Romania
to privatize its national oil company. According to EEER, in May 1997,
"Romanian media reported that during negotiations in London the EBRD
recommended the establishment of a new, restructured national oil
company before releasing a $400 million credit line which Romania is
to use for the upgrading and privatisation of its oil sector." During
these negotiations, Romania's Finance Ministry State Secretary Mircea
Costea told the EBRD that their new policy involves making "Romania more
attractive for foreign investors." Three months after this report, the
Romanian government announced that it decided to privatize much of its
national oil company, and that "this project will be backed by the EBRD
($300-400 million)." The restructuring forced the closure of three
refineries in the countries, leading to widespread strikes. According to
one press account, "A delegation headed by government secretary-general
Remus Opris went to Ploiesti to explain to workers that it was not the
government who shut down their companies, but the laws of the market
economy."
Sources: EBRD; East European Energy Report, July 8, 1992,
Aug. 19, 1992, May 28, 1997, Aug. 1, 1997; European Energy, July 16,
1992; Sept 19, 1997; Rompres news agency, August 19, 1997;
Reuter European Business Report, April 13, 1997; Financial
Times, July 8, 1992; EBRD Watch, July 6, 1992.
RUSSIA
Type of Industry: Oilfield development; oil spill cleanup
Subsidized Project: KomiArcticOil
Location: Upper Vosey Silurian oilfield in Usinsk
Owner of Project: KomiArcticOil (KAO)
TNC Involvement: KAO was originally a joint venture between
British Gas (25%), Gulf Canada (25%), and Russian concerns
Ukhtaneftegasgeologia and Komineft; AES/Hartec (U.S., Australia),
was contracted to assist with the oil spill clean-up.
Amount of
Financing: $80 million (1994), $25 million (1995).
Dates of Approval: February 1994, May 1995.
Notes: The EBRD pumped big money into the Upper Vosey Silurian
oilfield on the Arctic Komi Peninsula in February 1994. "We
are delighted that the EBRD has chosen to participate in financing
this project," said Chuck Shultz, Gulf's President and CEO and
KomiArcticOil's Chairman: "The joint venture offers opportunities to
work with our Russian partners in applying Western experience and
technology to maximise recoveries in this proven resource base."
"We are proud to be a key part of this important undertaking,"
said Randal Fischer, EBRD's Head of Natural Resources. "This
important private sector investment project in Russia's oil sector
provides exactly the combination of essential components which the
bank is striving to foster: development of a sound commercial opportunity;
strong Russian and foreign equity sponsorship; a forceful and effective
joint management team; and application of a 'best practices' way
of doing business, which affords useful sharing of both foreign and
Russian technology, management and systems."
Seven months later, the EBRD's pride turned to shame when an ecological
disaster became evident. A pipeline carrying oil from the
multinational-operated oilfield leaked an estimated 300,000
tons of oil over a period of months, beginning in February 1994 --
the very month that the EBRD announced its loan to the oil field
project. The oil companies kept pumping oil through the faulty
pipeline until October 1994, when they claimed they first learned
of the leaks. The resulting oil spill -- several times larger
than the Exxon Valdez disaster -- flooded tundra, marshes and rivers.
While the multinationals blamed the Russian pipeline operators for the
spill, and pulled out of the venture, the EBRD deserves a goodly share
of international outrage. In 1995, the EBRD approved an emergency loan
(less than one-third the size of their production loan) for assistance
in cleaning up the spill. "There are always lessons to be learnt,"
lamented an EBRD official.
Sources: The (London) Times, Nov. 14, 1994. Extel
Examiner, August 6, 1993; Canada NewsWire Ltd., August 5,
1993; WorldPaper, February 1996; Reuters, August 28, 1995.
Type of Industry: Arkhangelsk oilfield development.
Subsidized Project: Polar Lights Company development .
Location: Ardalin oilfield, Timan Pechora.
Owner of Project: Polar Lights Company.
TNC Involvement: Polar Lights is a joint venture between Conoco
(US, subsidiary of DuPont) and Komineft (Russia).
Amount of Financing: $90 million.
Date of Approval: September 1993.
Additional Financing: IMF, OPIC.
Notes: The Ardalin oilfield holds oil reserves of 110 million
barrels, and the EBRD loan is to develop and export them through the
Polar Lights joint venture. Located 1,000 miles northeast of Moscow,
Ardalin was the first major oilfield in the remote Arctic Arkhangelsk
region to be developed. "We always had an interest in Timan-Pechora.
The fields are certainly greater than most of those you will find in
North America," said Archie Dunham, Executive Vice-President of Conoco
Inc, in 1994. "Ardalin is a proving grounds for us. We won't stop at
this, and if the project proves as successful in an economic sense as it
has been technically, I can foresee our company's participation in the
joint development of not only oil but also gas deposits, in the
construction of oil refineries, and in the expansion of our area of
operations beyond the TimanPechora basin and into Siberia and the
Caspian region," Conoco executive Konstantin Nikandros told Izvestia
in September 1994, as the first oil began to flow from the Polar Lights
venture. "Greenfield oilfield development projects such as Polar Lights
can provide the necessary foundation for the long-term increase in
Russian oil production," said Azam Alizai, director of the IFC Oil,
Gas and Mining Department, in 1993, when the World Bank agency, EBRD,
and OPIC announced their $210 million in combined lending to the Polar
Lights project.
Sources: Financial Times (London) May 26, 1993; Journal
of Commerce, September 1, 1994; Extel Examiner, April 2, 1997;
Financial Times, March 19, 1996; Tass, October 26, 1994;
The (Glasgow) Herald, Sept. 29, 1994; Current Digest of the
Post-Soviet Press, Sept. 28, 1994; Moscow News, Sept. 16,
1994; Interfax news agency, Sept. 15, 1993; Reuter, July 1,
1993.
Type of Industry: oil field development.
Subsidized Project: Geolibent.
Location: North Gubkinskoye and Prisklonovoye oil and gas fields,
western SiberiaOwner of Project: Geolibent Joint Venture.
TNC Involvement: Geolibent is a JV between Benton Oil (US, 34%),
Purneftegasgeologia Industrial Association (Russia, 33%), and
Purneftegaz (Russia, 33%, subsidairy of Rosneft oil company).
Amount of Financing: $55 million loan.
Date of Approval: November 1996.
Additional Financing: The World Bank has loaned Purneftegaz
money for boosting production in several oilfields, including North
Gubkinskoye.
Notes: The North Gubkinskoye field holds estimated reserves of
344 million barrels of oil. The EBRD has promoted this loan as a
catalyst to "revive idle oil wells and exploit new ones." Benton
constructed a 37-mile pipeline connecting the North Gubkinskoye
fields with the Soviet pipeline system that brings oil to refineries
in the Czech Republic, Slovakia and Germany. The pipeline was built
in Texas and installed by a Russian company. Benton, the U.S. investor
in the oil field, has abandoned its U.S. operations since the early
1990s in favor of Russian and Venezuelan oil fields. Benton is also
eyeing fields in China and Vietnam. "We basically have had an
opportunity to participate in projects over there that are of such a
size (that would be impossible) to find in the United States,"
Alex Benton, the company's chairman, said in 1992. After the EBRD loan
was approved in 1996, Benton declared that "this transaction will
provide the necessary financing to accelerate development and
immediately increase oil production from this giant west Siberia
field." "The development of these fields represents an additional
step towards arresting the decline of Russia's oil production,"
said Ron Freeman, first vice president of the EBRD. The oil is for
domestic and foreign consumption.
Sources: British Broadcasting Corp.,July 8, 1993;
Los Angeles Times, Aug. 30, 1994; Reuters, Nov. 21, 1996,
Feb. 20, 1997; Interfax news agency, Dec. 5, 1995; Calgary
Herald, April 24, 1992; Chemical Business Newsbase, Oct. 21,
1997; International Trade Finance, Jan. 17, 1997; Platt's
Oilgram News, Dec. 13, 1996; East European Markets, Dec. 6,
1996; Enchanced Energy Recovery News, Dec. 1996; Oil Daily,
Jan. 17, 1996.
Type of Industry:oil field development.
Subsidized Project: Samotlar.
Location: Samotlar oilfield, western Siberia.
Owner of Project: Chernogorneftegas (March 1997 loan); Samotlor Pan-Canadian
(February 1994 loan).
TNC Involvement: Chernogorneftegas is a subsidiary of Russian oil giant Sidanko,
in which British Petroleum is attempting to invest. Samotlar Pan-Canadian is a joint venture
between Canadian Fracmaster (Canada) and Samotlar Services (in turn, a JV between Gulf Canada,
Canadian Fracmaster, and Nizhnevartovskneftegaz).
Amount of Financing: $8.25 million (February 1994) and $50 million credit
(March 1997)
Date of Approval: March 1997.
Additional Financing: U.S. Export-Import Bank
Notes: The EBRD has extended two loans toward the development of the massive
Samotlar oilfield in western Siberia. The first loan, "to enhance oil production,"
was extended in 1994. The second, "to develop and update producection process(es) and
carry out environmental projects," was approved in March 1997. Samotlar's proven deposits
are a weighty 1.2 billion tons of oil.
Sources: Hart's Daily Petroleum Monitor; British Broadcasting Corporation,
March 28, 1997; Euromoney, March 1996; Russia Express-Perestroika, April 24,
1995, Oct. 23, 1995; APS Review Oil Market Trends, Sept. 19, 1994; Interfax news
agency, March 24, 1997; Moscow Times, March 22, 1997.
Type of Industry: Oilfield development.
Subsidized Project: Chernogorskoye field.
Location: West central Siberia.
Owner of Project:TNC Involvement:
Chernogorskoye is a joint venture between Chernogorneft (Russia),
Anderman Smith Overseas (US), and Itochu (Japan).
Amount of Financing: $40 million credit
Date of Approval: June 1993
Additional Financing: The US Import-Export Bank, U.S. OPIC
Notes: The Chernogorskoye field, located just north of the massive Samotlar
field (see above), holds an estimated 100 million barrels of oil. All of the drilled
oil is exported to Europe. At the beginning of 1997, the joint venture was pumping out
350,000 barrels of oil per month. The 1993 loan was the EBRD's first for a private oil
development in Russia.
Sources: Denver Post, Jan. 13, 1997; Interfax news agency, June 4,
1993; Financial Times, June 5, 1993; Japan Economic Newswire, Oct. 29, 1992,
June 4, 1993.
Type of Industry: oilfield development
Subsidized Project: Magma Oil
Location: Yuzhnoye oilfield, western Siberia
Owner of Project: Magma Oil
TNC Involvement: Magma Oil is a majority-owned subsidiary of Vanguard of
Australia/U.K. Petro-Hunt (U.S.) also has an interest in Magma.
Amount of Financing: $53 million
Date of Approval: May 1995
Notes: The West Siberian field of Yuzhnoye, owned by Magma Oil, holds over
62 million barrels of proven reserves. The EBRD required Russia to exempt Magma from
national export taxes that normally apply to crude oil exports, according to Platt's
Oilgram News. Australian/British TNC Vanguard aquired a controlling interest in Magma
Oil in early 1994. Magma also holds the production license for the Orekhovskoye
oilfield, 25 kilometers northwest of Yuzhnoye, and interests in nine other fields.
Sources: East/West Commersant June 15, 1995; Extel Examiner, Feb. 2,
1994, Sept. 13, 1994; Jan. 18, 1996; Oil & Gas Journal, June 26, 1995; Platt's
Oilgram News, April 13, 1995; Jan. 19, 1996; Feb. 13, 1997; AP Newsfeed, Sept.
18, 1997.
Type of Industry: oil and gas field development
Subsidized Project: Vasyugan Services
Owner of Project:Vasyugan Services
TNC Involvement:Vasyugan Services is a joint-venture between Canadian
Francmaster Ltd/Samotlor Services
Amount of Financing: $8.7 million
Date of Approval: December 1994
Additional Financing: IFC
Notes: The EBRD loan financed the development of existing oil and gas wells
in Tomsk Oblast, which are tapping into 29 billion cubic metres of gas and 4 million
tonnes of gas condensate in reserve.
Sources:ITAR-TASS News Agency,
June 30, 1993; EBRD.
Type of Industry: Oil refinery (2 million tons/year flow).
Subsidized Project: Achinsk Refinery.
Location: eastern Siberia, near Krasnoyarsk.
Owner of Project: East Oil Co. (Russia).
TNC Involvement: Bechtel (UK), Encon System Ltd (UK).
Amount of Financing: $41.6 million.
Date of Approval: April 1996.
Additional Financing: Moscow International Bank, Moscow Narodny Bank.
Notes: The EBRD loan is to be used to purchase a vacuum distillation unit and
a delayed coker unit at the Achinsk refinery. The Bank touted the loan as a safety
measure. "Oil refining is pretty dangerous, so we are trying to bring international
standards in this business," Sergei Popov, head of EBRD natural resources department,
said in 1996. Another EBRD official, Vittorio Jucker, in 1997 said the bank could
"act as a pioneer" in financing Russia's downstream fossil fuel sectors.
Sources: EBRD; Moscow Times, July 30, 1996. East Europe Industrial
Monitor, Feb. 1, 1994; Platt's Oilgram News, June 26, 1997.
Type of Industry: oil transport (11 tankers, estimated 4.4 million
tons/annual
carrying capacity)
Subsidized Project: Novorossiysk Shipping Co. (Novoship)
Location: Russia
Owner of Project: At least 50% government-owned.
TNC Involvement: Novorossiysk rents oil tankers to Mobil and Exxon; Croatian
shipbuilding companies built the vessels.
Amount of Financing: $60 million
Date of Approval: December 1995
Notes: Novoship, which ranks as the 10th biggest fleet in the world measured
by capacity, operates 81 vessels. The 11 new EBRD-funded tankers are Croatian-built
double-hulled specifically constructed to transport oil products and hold up to 40,000
dead weight tons each. Novoship "rents its vessels to oil multinationals like Exxon and
Mobil," according to the Moscow Times.
Sources: Traffic World, March 8, 1996; The Moscow Times, Jan. 6, 1996;
South China Morning Post, March 1, 1996.
Type of Industry: Railcars for oil shipments (estimated 812,000 tons/year)
Subsidized Project: SFAT/Transfat
Location: Throughout Russia
Owner of Project: Sovfinamtrans (SFAT)/Transfat
TNC Involvement: Transfat is a joint venture between EBRD (10%), Trancisco Industries
(U.S., 23%), HAKA Group (Finland), and SFAT (40% owned by Russia's Ministry of Railways).
Amount of Financing: $42 million ($30 million loan; $12 million equity)
Date of Approval: April 1996
Notes: This loan finances the purchase of 1,500 railcars fitted with Trancisco's
heating system. The railcars will enter a fleet of thousands of railcars used to ship oil
from Russia, mainly to Europe. An estimated 812,000 tons of oil/year will be shipped via
these railcars, given a rate of 1.1 million tons hauled by 2,032 railcars already dedicated
for export. The EBRD-financed cars will bring the total Russian petroleum and petrochemical
railcar fleet to 7,000 cars.
Sources: Interfax News Agency, April 26, 1996; ITAR-TASS, April 26, 1996;
Euro-East, July 16, 1996; PR Newswire, April 25, 1996; Financial Times
(London), March 20, 1991.
SLOVAKIA
Type of Industry: Oil refinery.
Subsidized Project: Slovnaft Refinery.
Location: Bratislava.
Owner of Project: Slovintegra (joint stock company involving managers of
Slovnaft)
/National Property Fund (FNM).
Amount of Financing: $56 million equity.
Date of Approval: December 1994.
Notes: In 1995, the EBRD purchased 10.5 percent in shares in the Slovnaft refinery
from Slovakia's National Property Fund (FNM). The EBRD was not pleased, however, to find
that it had been charged 1,000 korunas per share, while others purchased shares at 165
korunas. The EBRD began talks with Slovnaft in early 1997 in an attempt to sell its
shares back to the FNM. The refinery has a throughput capacity of 115,000 barrels per day.
In 1995, half of its production of 5.3 million tons was exported to 36 countries.
Sources: EBRD; The European, Nov. 14, 1996; The Prague Post, Apr 16,
1997; Finance East Europe, June 6, 1997; Platt's Oilgram News, March 7, 1996.
UKRAINE
Type of Industry: Oil and gas production.
Subsidized Project: Poltava Petroleum Company.
Location: Ignatovskoye oil and gas field, Poltava.
Owner of Project: Poltava Petroleum Company.
TNC Involvement: Poltava is a joint-venture of JKX Oil & Gas (UK, 49%) and
Poltava GazProm, a subsidiary of Poltavaneftegazgeologia/Ukraine State Property Fund.
Amount of Financing: $8 million
Date of Approval: April 1995
Notes: The EBRD's funding "is being used for the drilling of four new wells,
connecting these wells to the operation and production base, and constructing a pipeline
and rail export facilities. Daily production from the field is expected to reach 4,000
barrels of oil and 45 million cubic feet of natural gas in the first phase," according
to the EBRD. The Ignatovskoye field holds reserves of 1.1 trillion cubic feet of gas and
51 million barrels of oil and condensates. Oil and gas development by the owners of the
project may soon spread into the Black Sea.
Sources: EBRD, Russia Express-Perestroika, June 5, 1995, Oct. 23, 1995;
East European Energy Report, May 22, 1995, May 28, 1997; APS Review Gas Market
Trends, Sept. 16, 1996; International Trade Finance, May 5, 1995.
Type of Industry: Coal-fired power plant (210 megawatts).
Subsidized Project: Starobeshevo Power Plant.
Location: Donbas region, southwestern Ukraine.
Owner of Project: Donbasnegro Genco, state-owned thermal power generator.
TNC Involvement: Ukraine has requested international bids to replace the boiler.
Winning bids are expected to be selected by the end of 1997.
Amount of Financing: $113 million.
Date of Approval: December 1996.
Notes: The project is to replace a 200-megawatt pulverized coal boiler at the power
plant with a 210-megawatt atmospheric circulating fluidised bed boiler. The owners plan
to replace its normal fuel (expensive, hard coal) with low-grade product and coal
washings. John Besant Jones, an EBRD banker, says "They have 10 million metric tons of
the stuff."
Sources: The British Broadcasting Corporation, May 24, 1995; EBRD;
International Market Insight Trade Inquiries, April 16, 1997; EIU Business
Ukraine,
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