Diadema Field Development Summary Of Project Information (SPI)       Project Name    Argentina-CAPSA Diadema Field Expansion            Region    Latin America        Sector       Project No007418   Projected Board DateJune 14, 1996   Company NameCompañías Asociadas Petroleras S.A. (CAPSA or the Company)   Technical Partner and/or Major Shareholders    	CAPSA is owned equally by the Götz, Etchepare and Bachiochi families.    Project Cost Including proposed IFC investment    	CAPSAs total financial needs are about US$70 million required to finance the Companys two year investment program and to restructure existing short-term debt.  It is proposed that IFC provide total financing of US$60 million: US$20 million for its own account and US$40 million for the account of participant banks.    Location of project and Description of site    	The Diadema field is located in the San Jorge basin in the Chubut province of Southern Argentina in a relatively remote, barren location with a low population density.    Description of Company and Purpose of Project    	CAPSA, the sponsor, is one of Argentinas smaller, family owned, oil and gas producers.  The Companys main area of activity is the operation of the Diadema oil field which produces some 5,500 bpd.  In addition, the Company holds 55% of CAPEX (the remaining 45% is publicly listed), which operates a 370 MW electricity generation plant utilizing the 2.45 million cubic meters per day output of CAPEXs Agua del Cajón and Senillosa gas fields in Neuquen.    	The project to be financed is designed nearly to double daily oil production in the Diadema field through the extension of CAPSAs secondary recovery program.  The investment will finance a comprehensive drilling and workover program as well as the construction of various surface facilities.    	Given the difficulty that smaller Argentine companies have in accessing the international capital markets, it is unlikely that CAPSA would be able to develop the Diadema field to its optimum recovery level without IFC assistance.  IFCs presence is required to attract the long-term finance necessary and prudent to enable CAPSA to weather the oil recovery and price risks inherent in the project.  This project would contribute to the development of second tier firms in the country while improving provincial industrial development.  Increased production of oil would generate export earnings and provide tax and royalty revenues for Chubut province which has few other income generation opportunities.  The project will also create some employment opportunities, directly with CAPSA as well as with its suppliers and contractors.  Finally, the Company would benefit from IFCs institution building effort which would help it move towards becoming a more mature and better balanced competitor.    Environmental Category and Issues    	This is a category B project according to IFCs environmental review procedure.  Environmental issues of potential concern with this project are the prevailing environmental conditions as a result of existing operations, the management of produced water and gas, the rehabilitation of lands impacted by the secondary recovery program and worker health and safety.  The Company has provided IFC with environmental baseline studies of its existing operations in order to demonstrate compliance with Government of Argentina environmental requirements as well as with World Bank environmental guidelines.  Detailed plans have been proposed for the management of produced water and gas (it is proposed, inter alia, that 6,000 m3/day of produced water will be re-injected), the rehabilitation of disturbed areas and worker health and safety.    The  is  from the Public Information Center.       Host country location of environmental documents    Compañías Asociadas Petroleras S.A., Avenida Eduardo Madero 940, 1106 Buenos Aires, Argentina      Date SPI sent to PIC May 13, 1996   For Additional Information contact:  Corporate Relations Unit -   telephone: (202) 473-7711   facsimile: (202) 676-0365  Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).