The International Bank for Reconstruction and Development, a division of the World Bank, approved a $610 million loan to three Russian oil-producing associations, according to the Russian Ministry of Fuel and Energy.
The three associations, all in western Siberia, are Kogalymneftegas, Purneftegas and Varieganneftegas.Varieganneftegas is a partner with U.S. companies Phibro Energy Inc. and Anglo-Suisse Inc. in the White Nights joint venture. The Russian company recently was accused by Phibro of attempting to expropriate Phibro's interest in the project using foreign loans.
The bank said the loan is the largest granted by the World Bank in its 48 years of operation.
The loan has been backed by the Russian government and approved for a 17- year period, with repayments scheduled to begin in 1998. It will be used to slow the drop in crude production and increase managerial and technical efficiency, but the bulk of the sum will go to fund a project for the repair and restoration of more than 1,300 idle oil wells at a total cost of more than $1 billion.
Russia's well repair program has already attracted a $250 million loan
from the European Bank for Reconstruction and Development and a $6 million grant from the government of The Netherlands, but it still requires
investments of $169 million.
Once completed, the repairs could boost Russian output by 240,000 barrels a day, which would be worth an annual $1.5 billion in exports.