ROCH Project ROCH S.A. (ROCH or the company) is a small Argentinean oil and gas exploration and production (E&P) company.  Its six hydrocarbon assets are located in the Austral, Golfo San Jorge, and Neuquen basins, in central and southern Argentina.  The companys main asset is its 20.29% participation in the Rio Cullen  Las Violetas  Angostura joint venture, which produces natural gas and crude oil from the Tierra de Fuego island.  Current oil and gas production net to ROCH is 440 barrels per day (b/d) and 4700 thousand cubic feet per day (mcf/d), respectively.  IFC has been requested to provide a financing package to the company to partially fund its 2007-2010 capital expenditure program, which includes:

- drilling programs aimed to increase production from existing hydrocarbon fields, 
- addition of production and storage facilities, 
- exploration activities within ROCHs hydrocarbon concessions; and 
- potential acquisition of new hydrocarbon assets. - Fit with the World Bank Group Strategy: 

The World Bank Groups (WBG) current program in Argentina focuses on supporting the Governments efforts to make the transition from emergency response and crisis recovery, to sustained growth with improved equity and reductions in structural poverty and an appropriate policy framework for private sector development. IFCs priorities for its direct investments are to provide long-term financing and structured financial products to companies and projects in strategic sectors including: oil, gas and mining; agribusiness and forestry products; and the financial sector.  The proposed IFC investment is fully consistent with this strategy.

- Development Impact:

Contribution to alleviate tight gas market in Argentina: 

ROCHs capital expenditure plan is targeted to increase Argentinas indigenous sources of energy, particularly the monetization of gas reserves. This is important for Argentina, where approx. 46% of the primary energy matrix is supplied by natural gas. Argentina is facing a shortage of gas due to the increase in demand and decreasing production rates, which presents a risk for sustained growth.  The project will contribute to mitigate this effect.

Creation/preservation of local employment and sourcing in Argentina: 

ROCH currently employs 105 people directly and over 40 people through subcontractors in the provinces of Tierra de Fuego, Santa Cruz, Mendoza, and Rio Negro. The project will help to secure these jobs by extending the life of ROCHs hydrocarbon fields. During drilling and construction operations, a significantly larger number of people are expected to be hired through local and regional contractors. This will provide an alternative source of income to local people, whose employment alternatives are mainly restricted to the agribusiness sector.  The project will also have an impact on regional economic activity through local purchasing.

Contribution to Government revenues:

The project will facilitate the sale of increased volumes of natural gas, gas liquids, and crude oil. Associated taxes provide an important source of income to the Federal and Provincial Governments; therefore, the implementation of the project will result in increased revenues for the Government. 

Indicators that will be used to monitor the development impact of the project include:

- Employment maintained/created;
- Payments to Government; and
- Purchases from local and national suppliers.