Translated version of this PSD: Russian
EBRD is considering a senior loan for USD 20 million to Falcon Oil and Gas Ltd. (Falcon, the “Company”), a principal subsidiary of Condor Petroleum Inc., an independent publicly traded Canadian oil & gas group with assets concentrated in the Republic of Kazakhstan.
The proposed financing will fund capital expenditures of the Company and, in particular, the construction of an associated petroleum gas (APG) facility required to eliminate all routine operational flaring during commercial production at Shoba oil field, one of four discoveries made on the block (the “Project”).
The Project will support one of the few small size private players/juniors in the Kazakhstani oil and gas sector, currently dominated by the state-owned company.
EBRD financing is also expected to help maintain a high standard of corporate governance and business conduct at the Company, by ensuring the proper utilisation of associated petroleum gas (APG) - through the construction of power generation and heating units working on APG - and by supporting compliance with EITI standards.
Falcon is the party to the Zharkamys West 1 subsoil use (exploration only) contract executed with the Government of Kazakhstan in 2007 and is the principal asset of Condor Petroleum Inc (the “Sponsor”).
Listed on the Toronto Stock Exchange, the Sponsor started its operations as a purely Canadian business having later disposed essentially all of its assets except Falcon, which is currently the sole focus of its operations.
Senior loan for USD 20 million to Falcon Oil & Gas Ltd.
The total project cost is estimated at USD 27 million.
Categorised B (for the purposes of the Bank’s appraisal) in accordance with the 2008 Environmental and Social Policy. The potential impacts associated with this small operation can readily be identified, assessed, mitigated and managed, and the scale of the operation is significantly below the EU guidance on EIA stating that development of greenfield oil operations in excess of 500 m3/day should have an EIA. Current production rates and maximum production rates to be achieved in this field are well below (less than one-third) this threshold of 500 m3/day
The environmental and social due diligence has been conducted by independent environmental and social consultants and included an independent environmental, social and health and safety audit of existing operations and facilities, a review of corporate environmental and social management systems and procedures, as well as an environmental and social analysis of the proposed investment. It should be noted that Falcon has an environmental, health and safety management systems and resources in place at the corporate level and in the field operations. The Shoba field is a small size deposit with minor production levels currently produced for the domestic market. The Environmental and Social Due Diligence (ESDD) is currently being completed and the ESAP is being agreed with the company. The results of the ESDD indicate that site management is aware of and addressing the main risks associated with operations. A few minor issues identified (such as covering domestic waste while being stored onsite prior to disposal at the local landfill) have already been addressed by the company. One of the greatest risks posed by this operation relates to transportation and opportunities for strengthening management of transportation are being discussed with the company. This PSD will be updated to reflect final results of the ESDD in the near future.
The company has a good relationship with locals and a strong community relations program. There was a public meeting in Ebiety village on 15 June and over 30 people from the village attended the hearing. Main interest from the community relates to job creation and dust generation from the dirt roads. The company and their contractors are actively recruiting from the local villages.
Falcon Oil and Gas
9th Floor, 90 Shevchenko str,
Almaty, Republic of Kazakhstan
Tel.:+7 727 313 76 44
For business opportunities or procurement, contact the client company.
EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
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