Pico Oil and Gas



Project number:


Business sector:

Natural resources

Notice type:


Environmental category:


Approval date:

28 Jan 2015



PSD disclosed:

07 Nov 2014

Translated version of this PSD: Arabic

Project Description

EBRD loan of up to USD100 million as part of a larger Reserve-Based-Lending Facility of up to USD350 million.

Transition Impact

The key sources of transition impact for the Project are as follows:

(i) More widespread private ownership through supporting the expansion of an independent and private-sector owned market player;

(ii) Setting standards for corporate governance and business conduct by raising (a) Health, Safety and Environment (HSE) standards including a programme dedicated to staff training and/or certification; (b) implementing a comprehensive Corporate Governance Action Plan; and (c) membership of the International Petroleum Industry Environmental Conservation Association (“IPIECA”);

(iii) Demonstration of new replicable activities by implementing a worldwide Corporate Energy Efficiency and Associated Petroleum Gas (“APG”) Flaring Reduction Policy;

(iv) Contribute to the Policy Dialogue efforts with the Egyptian authorities to discuss comprehensive measures to reduce gas flaring in Egypt.

The Client

Cheiron Finance Limited an independent upstream oil and gas company operating in Egypt.

EBRD Finance

Up to USD100 million.

Project Cost

Up to USD350 million.

Environmental Impact

Categorised B. The proposed activities will take place within the existing developed concession areas, which have in place required production facilities and have been producing oil and gas for a number of years. To date, a number of EIA studies have been carried out by the Company to cover site preparation works, drilling works and a number of other construction and operation activities. The Company maintains reports on emissions, volumes of waste and on general environmental performance of the Project. The Company has in place a Quality, Safety, Health and Environmental (QSHE) Policy and the integrated Management System based on the requirements of ISO 14001 and OHSAS 18001 standards. These management systems are adopted by all oil and gas sector subsidiaries of the Company. While QSHE MS is generally in line with the requirements of PR1, it will need to be expanded to include a comprehensive Social Policy, Social Impact Assessment (SIA), SEP and grievance mechanism.

The ESDD identified that the main source of GHG emissions is a stationary power generators with a total emission rate of 97,722 tons of CO2 equivalent out of a total of 120,088 tons (81%). The JVs have already implemented measures to reduce GHG emissions. All fields except Zaafarana, make a large use of produced gas for power generation. Also, national EIA contain key measures to reduce emissions: optimisation of stack height based on dispersion modelling ; using gas with low or no sulphur content; conducting test measurements of emissions during various optimisation studies; routine inspection and maintenance of combustion emission sources.  For achieving further energy efficiency and improvements in GHG reduction, the Company will  develop a GHG reduction strategy whereas continuous reduction and/or optimisation of flaring process will be implemented through the implementation of best practices and new technologies. The Company will prepare an annual report on GHG gases, presenting an inventory of sources and volumes of GHG and documenting the yearly production of GHG.

Wastewater management requires some improvements and oil spill response plans need to be revised based on oil spill modelling.

Accidental discharges of insufficiently treated produced water, drilling cuttings or an accidental oil spill have the potential to migrate towards the protected areas and Important Bird Areas, which could adversely affect biodiversity. The national Environmental Impact Assessment studies only contain generic information on presence of species based on secondary data. The Company is currently in the process of selecting services of qualified consultants to conduct a biodiversity study and impacts assessment and to identify presence of habitat trigger species and for classifying any existing natural, modified or critical habitats as per PR 6.

The ESAP contains inter alia commitments  to address all items identified during project appraisal, including revising the QHSE policy to include commitments on assessing and managing social risks, labour issues, stakeholder engagement in line with IFIs requirements; nominating CRS coordinators at the operating companies level; commissioning independent biodiversity studies, impact assessment and management plans; and revising oil spill response plans. The ESAP will be an integral part of the loan agreement and the Company has in principle agreed to the ESAP and a formal confirmation is expected shortly. The Company will be required to submit annual environmental and social reports on compliance with PRS, including a detailed report on the implementation of the agreed ESAP.

Technical Cooperation


Company Contact

Hesham Elbosaty/Shams El Kady
Group Treasurer
PICO International Petroleum
7 Street 150, Maadi, Cairo, Egypt

Telephone:+ (202) 2359-1990
Fax: + (202) 2359-7875
Website: www.pico-petroleum.com


Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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Text of the PIP

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