China Eximbank provides RMB 350 million government concessional loan for Oil Drilling Rigs Acquisition Project

According to a dataset of foreign-financed projects that the Syrian Planning Commission provided to UNDP Syria in May 2011, China Eximbank and Syrian Petroleum Company (叙利亚石油公司) — a state-owned oil company in Syria — signed an RMB 350 million government concessional loan (GCL) agreement in 2008 for the Oil Drilling Rigs Acquisition Project. This loan was issued following the signature of two separate preferential loan framework agreements (one worth RMB 100 million and other worth RMB 250 million). The loan carried the following borrowing terms: a 2% interest rate, a 4.5833-year grace period, a 12.0833-year maturity, and a 0.5% management fee (RMB 1.75 million). The borrower (Syrian Petroleum Company) was to use the proceeds of the GCL to finance a $50 million commercial contract that it signed with China Petroleum Technology and Development Corporation (CPTDC) in 2007. According to written correspondence between Mr. Eng. Omar AL HAMAD (General Manager of the Syrian Petroleum Company) and the Concessional Loan Department of China Eximbank on April 1, 2010, the Government of Syria issued a sovereign guarantee in support of the loan. The purpose of the project was to purchase seven new oil drilling rigs, four oil drilling repair rigs, and two cement pumping units for use in Deir ez-Zor Governorate (Arabic: مُحافظة دير الزور‎). On June 1, 2010, China Eximbank notified the Syrian Petroleum Company that the GCL had become effective. Then, in May 2011, the Syrian Planning Commission reported that the implementation of the project was ‘ongoing’ and its expected completed date was December 31, 2012.

Additional details

1. This project is also known as the Project of Purchasing Drilling Rigs, Purchasing Drilling Rigs Project, and the Purchasing Oil Drillers Project. The Chinese project title is 购买钻机及相关石油设备. The Arabic project title is مشروع شراء معدات نفطية حفارات or لتمويل مشروع شراء معدات وحفارات لصالح الشركة السورية للنفط. 2. It is known that the Chinese Government and Government of Syria signed an RMB 250 million preferential loan framework agreement on November 12, 2008. However, it is not known precisely when the (earlier) RMB 100 million preferential loan framework was signed. This issue merits further investigation. 3. The estimated maturity, grace period, and interest rate of the loan are drawn from the World Bank's Debtor Reporting System (DRS). See https://www.dropbox.com/s/2sw4f7gluxa52fk/DRS%20Official%20Commitments%20from%20China%20Through%202021.xlsx?dl=0 and https://www.dropbox.com/s/ab8qt4n6jijcbhd/IDS_Average%20interest%20on%20new%20external%20debt%20commitments.xlsx?dl=0 and https://www.dropbox.com/s/949n5rctiue6d7c/IDS_Average_grace_period_and_maturity_on_new_external_debt_commitments.xlsx?dl=0

Number of official sources

12

Number of total sources

30