Docament of

The World Bank

FOR OMCIAL USE ONLY

Repot No 12413

PROJECT COMPLETION REPORT

CHINA

UEIYUAN GAS FIELD TECENICAL ASSISTANCE PROJECT(LOAN 2580-CeA)

OCTOBER 19, 1993

FILE COPY

Report No: 12413Type: PCR

Industry and Energy Operations DivisionCountry Department IIEast Asia and Pacific Regional Office

This document bas a restrited distrition and may be sd by recipient only in the performance oftheir ofiWal duties. Its contents may not otherwise be disclosed without World Bmaik authorization.

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CURRENCY EQUIVALENTS

Currency Unit = Yuan (Y)

Country Exchange Rates

Year Y/$Yearly Avg. Year End

Appraisal, April 1985 2.801985 2.9513 3.20951986 3.4626 3.73141987 3.7314 3.73141988 3.7314 3.73141989 3.7317 4.73391990 4.8596 5.23521991 5.3603 5.4478Closing, June 1992 5.80

FISCAL YEAR

January 1 - December 31

WEIGHTS AND MEASURES

1 metric ton (mt) = 1,000 kilograms (kg)1 metric ton (mt) = 2,204 pounds (lbs)1 meter (m) = 3.28 feet (ft)I cubic meter (CM) = 35.3 cubic feet (CE)1,000 cubic meters (MCM) = 35,300 cubic feet (MCF)1,000,000 cubic meters (MMCM) = 35,300,000 cubic feet (MMCF)1 billion cubic meters (BCM) = 35.3 billion cubic feet (BCF)1,000 cubic meters of natral gas = 9.31 kilocalories

ABBREVIATIONS AND ACRONYM

CNPC - China National Petroleum CorporationCNTIC - China National Technical Import CorporationECPI - East China Petroleum InstituteGOC - Governtent of the People's Republic of ChinalTC - Intemational Tendering Company of CNrICMOF - Ministry of FinanceMOPI - Ministry of Petroleum IndustryPCR - Project Completion ReportSPA - Sichuan Petroleum AdministrationSWCPI - Southwest China Petroleum InstituteSWMD - Southwest Mining Distrct

FOR OFFICIAL USE ONLY

THE WORLD BANKWashington, D.C. 20433

U.SA.

Office of Director-GeneralOperations Evaluation

October 19, 1993

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Completion Report on ChinaWeivuan Gas Field Technical Assistance Prolect (Loan 2580-CHA)

Attached is the "Project Completion Report on China - Weiyuan GasField Technical Assistance Project (Loan 2580-CiA)" prepared by the East AsiaRegional Office, with Part II prepared by the Borrower.

The project was designed to establish a step by step rethodology fordetermining how to rehabilitate older gas fields. Its central purpose was toundertake a diagnostic study to determine whether the Borrower's interest ininvesting $200 million to increase production was technically and economicallysound. The study showed that the !mvestment would not produce the desiredresults.

The project met all its major objectives. It established amethodology for studying and evaluating gas field rehabilitation projects, andwas instrumental in the enhancement of a national petroleum training and researchprogram. The performance of the project is rated as satisfactory, institutionaldevelopment as substantial and sustainability as likely.

The PCR quality is satisfactory. The project will be auditedtogether with the first four projects completed earlier in the oil and gassectors in China.

Attachment

Robert Picciottoby Hans-Eberhard K5pp

This docunent has a restricted distribution and may be *asee; yy recipients only in the performance oftheir officiat duties. Its contents may not otherwise be Jsectosed without World Bank authorization.

FOR OMCIAL USE ONLY

CHINA

WEIYUAN GAS FIELD TECHNICAL ASSISTANCE PROJECr (LOAN 2580-CHA)

PROJECr COMPLETION REPORT

Table of Contents

Preface ................................. iEvaluation Summary ............. . . .................. ii

PART I: PROJECT REVIEW FROM BANK'S PERSPECTIVE .1

A. Project Identity .1B. Background. 1C. Project Objectives and Description ..... 2D. Project Design and Organization ........ .................... 2E. Project Implementation ........... ........................ 3F. Project Results . ........................................ 3G. Project Sustainability ............. ........................ 4H. SWMD Fnances ................. ....................... 51. Bank Performance ................ ....................... 5J. Borrower's Performance ........... ....................... 5K. Project Relationship. 6L. Consultant Services. 6M. Project Documentation and Data. 6

PART II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE. 7

Project Results. 7World Bank Performance. 7SWMD & SPA's Performance. 7

PART III: STATISTICAL INFORMATION. 8

Annex 1 SWMD Finances (1985-92) .14

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CHNA

WEIYUAN GAS FELD TECENICAL ASSISTANCE PROJECT(LOAN 2580-CHA)

PROJECT COMLETION REPORT

PREFACE

This is the Project Completion Report (PCR) for the Weiyuan Gas FieldTechnical Assistance Project in China, for which Loan 2580-CHA in the amount of $25million was approved on June 11, 1985. The loan was closed, after three one-yearextensions of the closing date, on June 30, 1992. The last disbursement was made onJuly 31, 1992. The undisbursed amount, $7,433.65, was canceled.

The PCR was jointly prepared by the Industry and Energy Division of Chinaand Mongolia Department of the East Asia and Pacific Regional Office (Preface,Evaluation, Summary, Parts I and IED and the Borrower (Part II).

Preparation of this PCR was started during the Bank mission in February1993, and is based, inter alia, on the President's Report; the Loan and Project Agreements;supervision reports, correspondence between the Bank and the Borrower; and internal Bankmemoranda.

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CH[NA

WEIYSAN GAS FIELD TECNICAL ASSISTANCE PROJECT(LOAN 2580CHA)

PROJECT COMPLETION REPORT

EVALUATION SUMMARY

Objectives

1. The ultimate pret objective was to assist the Southwest Mining Distict(SWMD) to arrest production dedline in an economical and effective manner. Toward thisend, the thrust of the project was directed at the tansfer of specalized modern technologyand institution bulding of SWMD in the following measures: (a) implementation of adiagnosdc study of the Weiyuan gas field to gain a better understanding of the reservoir,including verification of the gas reserve estimate, and investigate the feasibility of enhancedgas recovery techniques and related investment that would maximize economic recoveryof gas reserves and minimize the risks associatd with this program; and (b) maintaininggas production while the study was being undertn through the import of critcalequipment. In addition, the project aimed at strengthening petroleum education at thenatonal level (Pa I, para 3).

Ipolementation Experience

2. The project was implemented satisfactorily with a 10 percent cost overrunin US dollar terms. Completion of the project in 1992 represented a four-year delay fromthe apprail estimate. The extended delays could be attributable to a number of reasons,including: (a) protacted contract negotiations with international consultants andsubsequent revision in the scope of the diagnostic study, which were, in part, caused byinsufficient clarity in the Terms of Reference in defining the scope of work and inadequateunderstanding between the project entity and the consultants (Part I, para. 8); (b) thereservoir conditions were more complex than appraisal expectation, which necessitated thedrilling of six mote wells than the appraisal estimate for data collection (Part I, par 8);and (c) extended delays in the p ent of mode-n equipment for data colection andgas production as a result of intperience of the project entity in Bank projects,cumbersome approval procedures and fragmentation of responsibilities among variousgovernment agencies (Part I, para. 7).

Resut

3. The main project objectives, transfer of technology and institution buildingof SWMD, were achieved successfully through overseas training of SWMD staff as well

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as on-the-job training by intemational consultants for the diagitostic study, well servicecontractors and suppliers associated with the supply of critical modern equipment andinstrumentation. Further, the diagnostic study achieved the objective of gaining a betterunderstanding of the Weiyuan reservoir. While the study largely confirmed the gas reservein place estimated by SWMD, it concluded that the rapid early development of the fieldhas resulted in irreversible damage to wie reservoir and there was litfle possibility of aneconomically viable full-scale rcuscitation of the field as originally proposed by SWMD(Part I, para. 9). Thus, the implementation of the comprehensive techno-economicdiagnostic study before embarldng on a full scale redevelopment program, such asorginally prmposed, was filly justified and avoided considerable expenses and wastedefforts. Separately, the exchange trining program arranged between the East China andSouthwest China Institutes and selected overseas universities was successful, and resultedin contacts with foreign institutions being established (Part 1, para. 10).

Sustainalbility

4. Although the diagnostic study has shown that some gas production could bemaintained, currendy available techniques are unlikely to recover sufficient gas to justifya large-scale resuscitation of the Weiyuan gas field (Part I, para. 9). Study techniques andexperience gained, however, will be useful in assessing and producing other gas fields.Further, the petroleum education component, including international exchange program,was considered to be successful. The good practices learned under this component wouldbe replicated by China National Petroleum Corporation (CNPC), to further strengthenpetroleum education in China. Moreover, the results of the study on the long-term trainingand research program in petroleum technology would be incorporated in CNPC's plan tobuild up the institution capability of the petroleum sector (Part I, para. 14).

Findings and Lessons Learned

5. in retrospect, the project schedule expected at the time of project appraisalwas overly optimistic in view of Borrower's lack of experience in Bank-financed projects.Further, to avoid implementation delays, the terms of reference for consultant servicesshould have defined clearly the scope of work. Finally, procurement procedures shouldbe streamlined as much as possible to avoid protracted delays.

CHINA

VEIYUAN GAS FIELD TECHNICAL ASSISTANCE PROJECT(LOAN 2580-C HA)

PROJECT COMPLETION REPORT

PART I: PROJECT REVIEW FROM BANK'S PERSPECTIVE

A. Project Identity

Name Weiyuan Gas Field Technical Assistance ProjectLoan Number 2580-CHARVP Unit East Asia and Pacific RegionCountry ChinaSector : EnergySubsector : Natural Gas

B. Backgrounad

1. Coal will inevitably continue to be the dominant energy source for China,accounting for about 75 percent of its commercial energy consumption. Oil is anothersignificant source of commercial energy (17 percent) for the country. However, despiteChina's high natural gas potential, the share of gas in commercial energy has remainedvery small (2 percent). Gas exploration and development has been inadequate mainly dueto past neglect, financing constraints, and limited access to advanced technologies. Naturalgas production in China amounted to 15.4 billion cubic meters (BCM), in 1991. About50 percent of the gas production is nonassociated gas, 90 percent of which is located inSichuan Province. Most of the major gas-producing fielis in China are considered matureand many of these fields have already experienced natural production decline. In 1985,gas production in China was 12.9 BCM, representing a decline of 11 percent from its peakproduction (14.5 BCM) in 1979. The shortage of gas became a major impediment toeconomic growth and remedial measures were urgently needed to arrest the decline of gasproduction. It was at this critical juncture that the Chinese government sought theassistance of the Bank in the development of the gas sector.

2. The Weiyuan gas field was discovered in 1964 and gas production began in1968. The gas producer, Southwest Minting District (SWMD), estimated gas reservesoriginally in place in the Weiyuan field at 40 BCM. Peak annual production of 3.7 millioncubic meters (MMCM) per day was achieved in 1976. Since then, production had fallenrapidly; by 1985, production fell (by 82 percent) to an average of only 0.8 MMCM perday due to the influx of water into the producing wells. Cumulative gas production from

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the field only amounted to 12 BCM (or 30 percent of gas-in-plae). Based on theassumption that an additional 10 BCM could be still be recovered, SWMD's initial requestfor Bank assistance was to support a field-wide rehabilitation program of over $200 milionto afrest production decline. However, in view of the complexity of the reservoir anddifficult operating conditions, the Bark recommended that extreme caution be exercisedto reduce technical and economic risks through a step-by-step approach. Prior to makingan investment decision on a major rehabilitation program, the Bank suggested, and SWmIDagreed, that a diagnostic study be undertaken under the project. This approach could avoidunnecessary investment and, if the results are positive, the study would be followed in thesecond phase by a major investment program to secure a higher level of gas recovery fromthe Weiyuan field.

C. Project Objectives and Description

3. The ultimate project objective was to assist the Southwest Mining Distrct(SWMD) to arrest production decline in an economical and effective manner. Toward thisend, the thrust of the project was directed at the transfer of specialized modern technologyand institution building of SWMD in the following measures: (a) implementation of adiagnostic study of the Weiyuan gas field to gain a better understanding of the reservoir,including verification of the gas reserve estimate, and investigate the feasibility of enhancedgas recovery techniques and related investment that would maximize economic recoveryof gas reserves and minimize the risks associated with this program; and (b) maintaininggas production while the study was being undertake through the import of cticalequipment. In addition, the project aimed at strengthening petroleum education at thenational level.

4. The project included: (a) the acquisition of reservoir and production datausing modern technology; (b) a comprehensive diagnostic study including an assessmentof key reservoir parameters, well completion and production methods, reservoir simulationand well stimulation, and related pilot operations, as well as the design of an optimumdevelopment program; (c) essential equipment and instrumentation for data collection andproduction; and (d) training and education to strengthen ECPI and SWCPI and to assistMOPI (later CNPC) in undertaking a study of the petroleum education requirements at anational level.

D. ProJect Design and Organization

5. The project was designed to assist SWMD in evaluating the feasibility ofenhanced gas recovery techniques and related rehabilitation program at the Weiyuan gasfield, which encountered technologically complex production problems. As noted above,a step-by-step approach was adopted, whereby immediate assistance under the projectincluded the implementation of a comprehensive techno-economic diagnostic study insteadof a full-scale rehabilitation program. This approach preved to be prudent and appropriatein light of the findings of the study that indicated that there is little possibility of aneconomically viable full-scale resuscitation of the field as originally proposed by SWMD.

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6. The project was mainly implemented by SWMD with the assistance ofinternational consultants. A project implementation unit (PIM) was set up by SWMD undera deputy director to facilitate coordination, monitoring and reporting under the project.'fhe ed-a-tion department of the former MOi-I, currently the China National PetroleumCor riflon (CNPC), which was responsible for the implementation of the petroleumeducaaon component, also formed a PIU under a deputy director.

7. However, considerable delays in procurement were initially encountered, inpart due to lack of experience with Bank procedures, fragmentation of responsibilitiesamong various Chinese agencies, and cumbersome internal clearance procedures. As inthe case of other onshore petroleum bureaus, SWMD did not have the authority to procuredirectly Bank-financed goods and services, nor was it allowed to process Bank loandisbursement applications directy. Internationalprocurement under the project was carriedout through an agent authorized by the governreent and disbursement applications werecentrally processed by CNPC. The above institutional arrangements were not conduciveto efficiency and contributed to delays in procurement and disbursements. These delayswere exacerbated by inadequate coordination among the concerned agencies.

E. Project Implementation

8. The project was implemented satisfactorily with a 10 percent cost overrun.However, completion of the project was delayed by about four years due to a number ofreasons, including: (a) a slow process in soliciting and evaluation of bids, in part due tothe lack of experience of SWMD and inadequate interagency coordination noted above;(b) protracted contract negotiations with international consultants and subsequent revisionin the scope of the diagostic study, which were, in turn, caused by insufficient clarity inthe Terms of Reference in defining the scope of work and inadequate understandingbetween the project entity and the consultants; and (c) the reservoir conditions were morecomplex than appraisal expectation, which necessitated the drilling of six more wells thanthe appraisal estimate for data collection. In retroWect, the implementation scheduleenvisaged at the time of project apprisal was overly optimistic.

F. Project Results

9. Diagnostic Study. The transfer of spedalized modern technology andinstitution building of SWMD, two of the project objectives, were achieved successfullythrough on-the-job training by international consultants, well service contractors andsuppliers associated with the supply of cntical modern equipment and instrumentation.Further, the diagnostic study achieved the objective of gaining a better understanding ofthe Weiyuan reservoir. While the study largely confirmed the gas reserve in placeestimated by SWMD, it concluded that the rapid early development of the field hasresulted in irreversible damage to the reservoir and there was little possibility of aneconomically viable full-scale resuscitation of the field as originally proposed by SWMD.Nevertheless, in view of the substantial amount of in-place gas reserves that have not yetbeen produced, the study recommended the implementation of a pilot program to test anumber of techniques to enhance gas production in the Weiyuan gas field. These

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techniques, if shown to be viable, could be applied in a larger-scale gas productionscheme.

10. Petroleum Education. The objective of strengthening petroleum educationin china was achieved under the project. International consultants assisted the formerMOPL, currently the China National Petroleum Corporation (CNPC) in the developmentof a national petroleum training and research program. In addition, under the petroleumeducation component, 424 overseas training visits were made by professors, lecturers andgraduate students. Of this total, 28 were for intemational conferences, 44 for one-monthstudy, 24 for PhD degree study, 19 for MSc degree study, 139 for 3-4 month advancedstudy, and 170 for 6-8 month cocperative research. The East China and Southwest ChinaPetroleum Institute's exchange program resulted in useful contacts being established withoverseas institutions.

11. Project Costs and Financing. The total cost of the project was $32.94million equivalent, representing 10 percent above the appraisal estimate of $30 millionequivalent. All of the cost overrun ($2.94 raillion equivalent) was related to localexpenditures, including $1 million for the diagnostic study, $1.04 million for the drilingof six additional in-fill wells for new logging data acquisition and $0.9 million for thepurchase of equipment and the setup of two compressor stations. The total foreignexchange expenditure of the project was the same as appraisal estimate; the cost savingsfrom the diagnostic study and data collection were used to finance additional criticalequipment for maintaining gas production. Salient highlights of the project costs andfinancing are given in Part III, Table 5.

12. Loan Allocation. The original and actual loan allocation is shown inTable 5, Part m. Unaocated amounts ($3 million) and savings from foreign exchangecost (about $4 million) of the diagnostic study and data collection were largely reallocatedto increased equipment (gas compressors) for arresting gas production decline.Consequently, the loan allocation for equipment was about 93 percent higher than theappraisal estimate.

13. Enviromnental Impact. As the project is basically a technical assistanceproject involving a study, education and taining, there is minimal environmental impact.

G. Project Sustaiabiity

14. Although the diagnostic study has shown that some gas production could bemaintained, currently available techniques are unlikely to recover sufficient gas to justifya large-scale resuscitation of the Weiyuan gas field. Study techniques and experiencegained, however, will be useful in assessing and producing other gas fields. Further, thepetroleum education component, including international exchange program, was consideredto be successful. The good practices leamed under this component would be replicated byCNPC to further strengthen petroleum education in China. Moreover, the results of thestudy on the long-term training and research program in petroleum technology would beincorporated in CNPC's plan to build up the institution capability of the petroleum sector.

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H. SWMD Finances

a5. Salient features of SWMD's finances over the period 1985-92 aresummarized in Anm.xL.- During 1985-88 (the financial forecast period at projectappraisal), SWMD's actual expenses were slightly higher than appraisal projections. Theseadverse impacts were more than offset by its actual production and average gas priceswhich were largely higher than the appraisal estimates. As a result, its actual net incomewas higher than the appraisal expectation (by 3 percent in 1986 and 31 percent in 1988).On the other hand, its average self-financing ratio during this period was 63 percent, whichwas 9 percent less than the appraisal estimate of 69 percent. This was because SWMD'sactual investments were substantially higher than anticipated at the time of projectappraisal.

16. During 1989-92, SWMD's net income declined gradually from a peak ofY 79 million in 1985 to Y 50 million in 1992, representing a decrease of 37 percent. Thiswas attributable to rapid increases (by a total of 96 percent) in operating expenses, whichoutpaced the increases of average gas prices (by a total of 34 percent) and gas production(by 2 percent). Its average self-financing ratio during this period decreased to 51 percent.The rapid rises in the costs of production reflected the increasing financing requirementsfor field development and rehabilitation to arrest gas production decline. With a view toincreasing resource mobilization for sector development and providing incentives forefficient uses of gas, SWMD's natural gas prices are expected to be further adjusted toallow the gas producer to maintain financial viability.

T. Bank Performace

17. The preparation of the project was good, the decision during appraisal tocarry out a detailed study before embarking on an extensive program to rehabilitate the gasfield has proved to be a good decision. Supervision missions were made regularly. TheBank has reviewed the consultant's report on the diagnostic study and has discussed therecommendations with the Borrower.

J. Borrower's Performance

18. Apart from the early delays in the award of consultancy and equipmentsupply contracts, which were due to SWMD's lack of experience of Bank projects and tothe interventions of central authorities, the Borrower performed well, particularly incarrying out the field work. The preparation of documentation required for projectsupervision was well done.

19. Protracted negotations sessions with consultants' contracts caused inordinatedelays, ultimately necessitating extensions to the closing date of the loan.

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K. Project Relationship

20. The relationship between the Bank and the Borrower was good throughoutthe project.

L. Consultant Services

21. The consultants, contractors, and suppliers used to carry out the studiesperfomed well and were the key elements in the successful completion of the project. Inaddition to carrying out the studies, field work and the supply of the new equipment, theyprovided on-the-job training in new techniques and use of the equipment needed for thetransfer of technology required to strengthen SWMD and the Institutes.

22. The pnncipal consultants were responsible for the identification and hiringof other consultants for engineering and other studies for which the principal consultantsdid not have the expertise. The Borrower felt that the scope of work was too large andvared for only one consultant and perhaps could have been accomplished moresatisfactorily by selecting a number of firms to focus on smaller components of the project.

23. The consultants chosen to oversee and implement the education andexchange program did a very credible job. The programs, professors and instructorschosen to carry out the work drew high praise from the Borrower and will stand as anexample of hov' to implement similar education programs in the future.

M. Project Documentation and Data

24. The legal agreement proved adequate for the efficient conduct of the project.The President's report provided a good framework for project implementation, while theproject supervision reports provided a comprehensive history and progress of projectimplementation.

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PART II: PROJECT REVIEW FROMBORROWER'S PERSPECTIVE

Projed Result

1. The project objectives were largely achieved as the geological complexitiesof the Weiyuan gas field were better understcod as a result of the studies. SWMD'sequipment and technology were upgraded through procurement of equipment and trainingoffered by the various sevice contractors and the consultants.

2. Since July 1987, 33 engineers were sent abroad for technical training. Thetraining during the diagnostic study covered geology, logging, laboratory analysis, single-well analysis, single-well simulation, reservoir simulation, history match and productionengineering. Software provided by the consultant would continue to play a positive rolein the development of Weiyuan gas fild and similar gas fields with bottom or edge water.

World Bank Performance

3. As SWMD lacked experience in this type of project, the Bank staff madea significant contribution to the implementation of the project. Assistance was given bythe Bank staff in preparing terms of reference, reviewing of technical specifications on theprocurement of equipment, introducing methods for evaluation of bids and financialmnanagement. The supervision missions were instrumental in maintaining the progress ofthe progress.

SWMD and SPA's Performance

4. SWMD was very conscientious and responsible for the implementation ofthe project. The Loan Project Office of SWMD played an important role inimplementation of the project. The Project Leading Group of SPA was active in decidingterms of reference of the diagnostic study, to confirm the bidding evaluation report andresults.

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PART Im: STATISTICAL SUMMARY

1. Related Bank Loans

Year ofLoan title Purpose Approval Status

Daqing Ollfield Development, TIA and 1983 Completed 6130190Gaotaizi Reservoir TrainingDevelopment Project(LN 2231-CHA)

Zhongyuan Wenliu Exploration, Develop- 1983 Completed 5103/91Petroleum Project ment, T/A and Trainiag(LN 2252-CHA)

Karamay Petroleum Exploration, heavy oil 1984 Completed 3131191Project (LN 2426-CHA) recovery, T/A and

Training

Liaodong Bay Petro- Gas Exploration 1986 Completed 1/16190leum DevelopmentProject ULS 2708-CHA)

2. Project TimSl

Items Date planned Date revised Date actual

Identification Mission 10/84 10/84Appraisal Mission 02/85 02/85Loan Negotiation 04/29/85 04129/85Board Approval 06/11/85 06/11/85Loan Signature 07/26/85 08/26/85Loan Effectiveness 08/85 01/31/86Loan Closing 06/30/89 06/30/92Loan Completion 12/31/88 07131/92

Comments: Initially, there was more than one-year delay in appointing the consultant forthe diagnostic study, and there was a two-year delay in completing the study due to thecomplex nature of the reservoir.

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3. Loan Disbursements

Cumultv Agp-aisal and Actua Disbursements($ miLfion)

FY86 FY87 FY88 FY89 FY90 FY91 FY92

Appraisal 2.0 14.0 23.0 25.0 25.0 25.0 25.0

Actual 0.3 3.1 9.3 14.9 16.9 20.2 25.0

Actual as Z ofappraisal 15 22 40 60 68 81 100

Date of final disbursement: July 31, 1992.

APPRAISAL VS ACTUAL DISBURSEMENTS

2O

- -APPPASAL

/0' -C--- ~~~ACTU~AL

I FY FY Pe FY FY FY86 87 88 89 90 91 92

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4. aroect implemetation

Project components Appraisal estimate Actual

Collection of reservoir andproduction data September 1986 June 1987

Stimulation Pilots December 1987 ContinuinsDiagnostic Study June 1987 January 1992Procurement of Equipment andInstruments June 1988 June 1992

Training (Institute ExchangeProgram) December 1987 December 1988

Petroleum Education Study December 1987 December 1987

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5. Prqject Costs and Financing

A. Pject Costs($ million)

A&vraisal estimate ActualLocal Foreign Total Local Foreign Total

Diagnostic Study 1.10 4.00 5.10 2.10 2.90 5.00Data Coll. Pilot Test 1.80 5.50 7.30 3.54 2.59 6.13Equipment 1.10 7.00 8.10 1.80 15.46 17.26Training 0.50 4.00 4.50 0.50 4.05 4.55

Base Cost 4.50 20.50 25.00 L.94 25.00 32.94

Physical contingency 0.30 2.90 3.20Price contingency 0.20 1.60 1.80

Total 5.00 25.00 30.00 7.94 25.00 32.94

B. Eriect inahcing($ million)

Am2ralial Actual laSource Local Amt. Z Total Local Amt. S Total

GOC/SWHD 5.0 0.0 5.0 7.94 0.00 7.94IBRDEquipment & Iastrumentation 8.0 32 15.5 61Well Services 6.0 24 2.6 10Studies under Part B of Project 4.0 16 2.9 11Training & Cons. Ser. under Part D 3.5 2 4.0 16Study Under Part E 0.5 12 0.5 2Unallocated 3.0

Total 5.0 25.0 10 30.0 7.94 25.5 100 32.94

h Basd on Bank loan aoain based on SWM) ords. B$ disbusent reodbs showdiffren aocao asfomow:

Equipmet & nsumentatio 9.1We ServiceS 10.7Stuies Under Parl B of Projec 13Trainng & Cos. Serv. under Pat D 1.9Study Under pat B 2.0TOtal

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6. Project Results

A. Economic/Financial Impact

(Not applicable for a technical assistance project)

B. Studie

Studies Purpose as Defined at Statue Impact of StudyAppraisal

1 Diagnostic Reservoir Study Completed Provided basis forto assess gas potential future development

of the Weiyuan gasfield./a

2 Petroleum Education Study Completed Provided basis forto assess future national influencing theneeds national plan for

future petroleumresearch, educationand training.-b

& The Borrower's original plan for a full-scale redevelopment of fte field will bereduced.

& A follow-up on the development of the national plan would be required in a futureproject.

7. Status of Covenants

Project agree-ment section Covenant Status

2.01 b SWMD shall maintain the Project Unit to coordinate CompliedImplementation of the project.

2.06 SW0D shall review vith the Bank the findings of the Compliedstudy, and the consequent action plan.

3.05 SW0D shall furnish to the Bank for review and comente, Complied (delayed)the findings of the education study under Part B of theproject and the subsequent action plan.

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8. Use of Bank Resources

A. Staff Lnput(Staff-weeks)

Activity FY85 FY86 FY87 FY88 FY89 FY90 FY91 FY92 FY93 Total

Preparation 7.2 - - - - - - - - 7.2Appraisal 27.1 - 27.1Negotiations 2.9 - - - - - - - - 2.9

Supervision - 13.3 12.5 10.0 4.9 4.3 7.7 1.1 - 53.8PCR - - - - - - - - 3.5 3.5

Total 37.2 13.3 12.5 10.0 4.9 4.3 7.? 1.1 3.5 94.5

B. Missio_ns

Sta8e of Month/ No. of SW In Specialization Performanceproject cycle year persons field represented la status lb Problems Ic

Through Appraisal 10/84 2 1 PE, FA 102/85 5 2 G, Z, FA, PZ I

Appraisal throughBoard approval

Post appraisal 05/85 2 3 ED 1

SuDervisionmission 1 09/85 1 1 E 1Mission 2 12/85 3 1 GP,P, PA 1Mission 3 03/86 6 1 a, PE, FA, 1 1Mission 4 02/87 3 1 G, PF, PS 1Mission S 06/88 3 1 PS, FA, PE Mission 6 07/89 2 1 PS, PE 1Mission ? 04/90 2 1 PE, 1 IMission 8 07/90 3 3 PA, PE, PE 1Mission 9 11/91 3 0.2 FA, PZ, C 1

PCR mission 02/93 2 0.5 PA, C 1

/a Re to U __tif: PE = Petroleum Engineer, G - eoologist, GP - Geophysicist; ED Educator,PS = Procurement Specialist; PA - Fmancial Analyst; E = Economist.

/b Key to PEoiect Status: 1 = No significant problem; 2 = Moderate problem; 3 - Major problem beingaddJessed; 4 = Major problem not adequatly addressed.

/c Kev to Problem Tps: P - Political; F = Fincial; M = Managerial; Y -Technical;O- Other(usually procurement).

Note: in adjta to the missions listed, there were short field visits, discussions with conslants, etc.,which ae also induded in the total staff-weeks used on the project

CHINASOUT4 WEST WEIYNAN ELECTRICAL (SWMD)

INCOME STATEMENTS (1N85 - 1921(Yuan MIN")

8^LE8 VQLISNetuud Ga (MMCM) 922 973 900 974 s80 980 960 964 1008 1010 902 982

Av. Gas Plle (Y/MCM) 168 1t0 166 175 166 167 108 11 187 166 219 243

FIEVENUESSabe Revene 165.0 165.4 165.0 170.2 169.0 160.1 159.0 174.3 188.4 167.8 208.2 238.0Lon: Sabe Tax (8.0) (7.8) (8.0) S8.8) (8.0) (8.1) (8.0) 18.9) (0.8) (8.7) (10.9) 412.3)Net sales Revenue. 147.0 147.7 151.0 l1e1. 161.0 162.0 151.0 106.4 178.6 1690 197.4 226.7

EXENSESOperatIn Cost 69.0 65.6 58.0 62.2 58.0 59.3 68.0 60.9 76.3 61.6 91.0 115.5Depreciation 21.0 16.8 22.0 26.3 22.0 22.5 22.0 21.9 28.2 27.7 35.2 45.2Othwe 1.0 0.7 1.0 1.3 1.0 1.9 3.4 4.0 4.4 6.7Totad Expenes 81.0 82.0 81.0 88.8 81.0 83.2 81.0 84.7 107.9 83.3 130.6 168.3

Inome Selore Inteest 86.0 R6.7 70.0 72.7 70.0 6.8e 70.0 80.7 70.7 65.6 66.9 60.3

Interest 2.0 0.1 8.0 0.2 9.0 0.9 10.0 1.8 3.1 7.0 7.9 10.3hIcome Tax . -Net Inome 64.0 05.0 62.0 72.5 81.0 67.9 60.0 78.9 87.6 68.7 59.0 60.0

o ..0

CHINASOUTH WEST MINING DISTPICT (SWMD)INVESTMENT FUNDING (1985 - 19921

tYuan Mions)

Investment & Feld MaintenanceRequIrmente 89 107 130 17t 143 203 128 219 235 234 243 261Fnanced by:

Local loan, crodts grato 19 61 21 47 22 73 29 84 103 102 98 S8IBRD Loan 4 0 24 6 31 14 0 19 19 a lo 24

t-nlItemay RetalnedFund xs 117 9S l8 90 117 99 116 112 124 129 129 1

Of wtich:Expbratin & Devebpment Funds 42 71 54 79 50 77 as 77 at 81 76 79Fked Maintenance 18 6 23 6 24 5 26 5 5* 6 6 6Renewl & Fefonm Povskons a 34 8 36 8 35 8 34 26 38 46 45

NOTE: Figures nmy not tota exactly due to rounding. P I

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