Pluspetrol Norte secures US$75mn Credit Suisse loan

Pluspetrol Norte, a Peruvian subsidiary of Argentine oil company Pluspetrol, has secured a US$75mn loan from Credit Suisse First Boston to finance its exploration and production activities in northern Peru, the company said in a statement. The loan has a 4.5-year term and a one-year grace period, Pluspetrol CFO Cristian Garzon told BNamericas, adding that the interest rate is confidential. Credit Suisse First Boston (CSFB) is the investment banking arm of Credit Suisse Group. Pluspetrol Norte is the largest oil producer in Peru, and the loan will be used to pay for maintenance and the drilling of new wells in its 1AB and 8 blocks, Garzon said. Despite the current market conditions in Latin America and the uncertain climate due to the war in Iraq, Pluspetrol is confident that it can secure credit from international banks. "Pluspetrol produces oil which is a commodity and so it is much less risky than other kinds of activities that are focused solely on the domestic and regional markets," Garzon said, adding "an important part of Pluspetrol's income comes from exports." "Obviously the conflict [in Iraq] generates instability in the crude markets but we don't expect the price to drop much more," he continued. The loan is "a good indicator that there is international financing available for Latin American oil companies," Garzon said, adding that the loan is part of Pluspetrol's "global financing strategy." The loan is independent of the Camisea project, in which Pluspetrol Norte's fellow subsidiary, Pluspetrol Peru Corporation, has a stake. The loan will free up funds at the parent company, allowing Pluspetrol to focus on the Camisea project, Garzon said. Pluspetrol and other members of the Camisea consortium are currently seeking some US$400mn in financing from the Inter-American Development Bank (IDB) and the Andean Development Corporation (CAF). As for Pluspetrol's plans to sell part of its participation in the upstream and/or downstream Camisea consortiums, "I would rather not make any statement until we have something concrete," Garzon said.