report

Transcription

report

ANNUAL
REPORT
ENAP
GROUP OF COMPANIES
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Company Name
Empresa Nacional del Petróleo
Address
Avenida Vitacura 2736
Comuna de Las Condes
Santiago de Chile
Tax Id. Number
92.604.000-6
Type of company Public company created by Law 9,618
Owned by
Chilean State
Telephone
(56-2) 280 3000
Fax
(56-2) 280 3199 / 280 3179
P.O. Box
3556, Santiago de Chile
Post Code
6763260
Web site
www.enap.cl
External Auditors
Deloitte Auditores y Consultores Ltda.
ANNUAL
REPORT
Index
5
The Company
25
Human Resources Management
33
Business Environment
43
Corporate Management
65
E&P Business Line
89
R&L Business Line
113
179 Consolidated Balance sheet and Financial Statements
Individual Balance sheet and Financial Statements
The Company
>>Letter from the Chairman of the Board
>>Enap Vision and Mission
>>Organization Description
>>Enap´s Board of Directors
>>Enap Group of Companies Organizational Chart
>>History
Pág. 6
Pág. 10
Pág. 12
Pág. 16
Pág. 18
Pág. 20
ENAP
6
E N A P G R O U P O F C O M PA N I E S
•
ANNUAL REPORT 2008
Letter
from the Chairman of the Board
E N A P group of companies
•
annual report 2 0 0 8
In 2008 ENAP faced one of the most complex scenarios of its history. During such term, the Company had to face highly volatile and hazardous market situations, with back and forth oscillations
in the price of crude and products facing a strong international financial crisis, being forced to face
the challenge of maintaining the country’s oil supply unaltered.
I
zed decrease at a worldwide level, especially du-
n 2008 ENAP faced one of the most complex
US$140 per barrel. As a matter of fact, in 2008
scenarios of its already 58 years of existen-
the average price of West Texas Intermediate
ring the first semester. While in 2007 the refining
ce. During such term, the Company had to face
(WTI) international crude was US$100.1 per ba-
gross margin in this market was an average US$7.6
highly volatile and hazardous market situations,
rrel, with a raise of 38.6% as compared to the
per barrel, in 2008 it decreased to US$ 6.1 per ba-
with back and forth oscillations in the price of
2007 average, which was US$72.2 per barrel.
rrel for the same basket of products.
financial crisis, being forced to face the challenge
During the second semester, the international
Nevertheless, the challenge of continuing to su-
of maintaining the country’s oil supply unaltered.
crisis added up, affecting not only the oil indus-
pply the local market was fairly complied with by
try, but all the economies in the world, causing
ENAP, in its condition of a leader company in the
To the normal demand for fuel to supply trans-
in our case a dramatic decrease in prices. ENAP
domestic energetic market. This is what It has
portation, the industry, commerce and the daily
had to continue producing diesel and other fuels
done since its creation, in 1950, and it has proven
crude and products facing a strong international
activities of consumers, during the first semester
at its refining plants, with a raw material (crude)
its ability during the last years, with a sustained
of 2008 the requirement to deliver extraordinary
bought months before at extremely high prices,
enhancement of the refining capacity, increasing
volumes of diesel oil to generate electricity at
but pricing was forced to sell at reduced prices.
exploration and production investments of new
hydrocarbon ores, in Chile and abroad, as well as
the thermal-power stations was added, in a year
expected to be as dry and with difficulties for
Notwithstanding the above, ENAP is a company
starting new projects to diversify our energetic
hydro-electrical generation. Such a situation for-
that operates within commercial criteria, and it
matrix in the geothermal, bio-fuel and liquefied
ced the Company to assume a high logistic and
must compete at arm’s length with other com-
natural gas (GNL) areas.
financial cost, associated with import operations
panies that purchase fuel in foreign countries to
at a moment when fuel prices were growing
sell it within the country. For this reason, ENAP
Due to the natural gas from Argentina cut-offs,
systematically. While on January 1st, 2008, the
applies an import parity policy which consists in
which started in 2004 and became permanent
diesel gallon was quoted at US$ 2.72 in the Gulf
referring to the prices of the United States Coast
the following year, ENAP assumed the com-
of Mexico, seven months later it was quoted at
of the Gulf of Mexico, and it subjects its internal
mitment of providing the country with the first
costs to market indications. Under such condi-
GNL station in South America, a work that by the
US$ 4.12.
tions, during 2008 the Company was exposed to
end of fiscal year showed an 86% progress. This
The same phenomenon occurred with all fuels
the dramatic price oscillations coming from the
station, supplemented by a GNL unloading port
and, of course, with crude oil, which in July
international market, even sacrificing its refining
at Quintero bay, which has become the longest
showed the highest real price in history, over
margins, which were also affected by a generali-
in Chile with a 1,800 meters dock, has been dri-
INDEX
7
8
•
ANNUAL REPORT 2008
ENAP is the main supplier of fuels in the country, and it represents
40% of he national energy matrix. The Company has a successful
history that supports its projects portfolio, both in Chile and abroad,
and thanks to the energy of the valuable team of employees, executive officers and professionals, we are sure that the Company will soon
overcome the turbulences faced in 2008.
ven by ENAP, in alliance with other two impor-
production which nowadays continues being the
ENEL, the largest individual producer of geother-
tant domestic companies, Endesa and Metrogas,
highest consumption fuel in Chile, amounting to
mal energy worldwide. At the end of fiscal year,
and with BG, one of the largest at a worldwide
over 10 million cubic meters in 2008, an increase
ENG started the drilling of the geothermal wells
level in the natural gas area.
of 6.8% as compared to 2007.
in the Second Region.
This GNL Project has also become one of the
Regarding the unconventional energy sources,
ENAP is the main supplier of the fuels in the coun-
largest in Chile in the energy area, with an in-
ENAP continued making progresses in the stu-
try, and it alone represents 40% of the country’s
vestment amounting to US$1,110 million. When it
dy of second generation bio-fuels, feasible to
energy matrix. Its history of success supports its
starts operating, by mid 2009, this megaproject
produce with the forestry industry by-products,
projects portfolio, both in Chile and abroad, and
shall provide an important relief regarding gas
which offer the best comparative advantage in
thanks to the energy of the valuable team of employees, executive officers and professionals, we
supply for households, as well as thermal-electric
the country, as compared to other vegetal origin
and industrial consumption in the central zone
materials. In this sense, in 2008 the Company
are sure that we will soon overcome the turbu-
and, in turn, it shall become a new contribution
consolidated its efforts in this area, with the ope-
lences we had to face in 2008.
to the energetic safety in our country.
ration of ForEnergy company, incorporated as an
Another recent contribution by ENAP to the
future creation of Biocomsa, an entity that shall
alliance with Consorcio Maderero, and with the
Chilean energetic safety and independence is
be devoted to leverage new resources in order to
the Coker Complex, which we inaugurated in
develop bio-fuels research.
August, 2008, at the Aconcagua Refinery. This
Complex allows us to process higher volumes
Also, in the unconventional energies area, in
of heavy crude, thus decreasing refining costs.
2008 ENAP made progresses towards the develo-
Heavy crudes are cheaper than those of inter-
pment of geothermal energy in the country, with
mediate density and than light ones. Also, heavy
the incorporation of Energía Andina company, a
crudes may be imported from closer markets,
partnership with Antofagasta Minerals. At the
from Latin America in this case, thus reducing
same time, ENAP continued with the activities
Santiago González Larraín
the transportation and logistic costs. In addition,
of Empresa Nacional de Geotermia (ENG), where
Minister of Mining
this Complex allows ENAP to increase diesel
the principal shareholder is the Italian company
Chairman of the Board
•
Change of CEO at Enap
O
n January 2nd, 2009, Rodrigo Azócar Hi-
Between October 1997 and November 2006,
Until April, 2008, Rodrigo Azócar was the pro-
dalgo, civil industrial engineer of Univer-
he was the CEO of Metro S.A., and one of his
rector at Universidad de Viña del Mar.
sidad de Chile, was appointed CEO of ENAP. At
achievements at this Stateowned company was
his appointment Rodrigo Azócar Hidalgo was
the expansion of the Metro network plan (which
Rodrigo Azócar obtained a diploma as civil indus-
the Chairman of the Council for the Sistema de
grew a 100% between 2000 and 2006), being the
trial engineer from Universidad de Chile, and he
Empresas Públicas (SEP) [Public Companies Sys-
projects –which amounted to US$ 1,800 million-
passed the Finance Specialization Program of Uni-
tem], a technical organization that includes 24
implemented within the budgets and demanding
versidad Adolfo Ibáñez. He has been a subject pro-
Governmental companies, which purpose is to
terms offered, within a transparency and effi-
fessor at the Industrial Engineering Department
represent the interests of the Chilean State at
ciency framework, as acknowledged by the asso-
of Universidad de Chile, and a guiding and guest
the companies in which it participates as partner,
ciations in the area (Chilean Chamber of Cons-
professor at the graduate exam and post-graduate
shareholder or owner. At the same time, he was
truction and Consultant Engineers Association),
(magister) commissions of that University.
a director of Aguas Andinas and Prolesur S.A., a
and by the company’s owner.
His office at ENAP is oriented to the purpose of
subsidiary of Soprole S.A.
During such term, Metro was acknowledged as one
re-positioning the company as an efficient and
Rodrigo Azócar has a wide experience and a long
of the five best companies in the country regarding
competitive one, which plays a strategic role re-
history in the financial area, first at Banco de
corporate reputation, and as a leader in Entrepre-
garding fuels supply, as well as other energetic
resources for the country’s development.
Chile, where he started in 1981 as loans analyst,
neurial Social Responsibility. The company became
to end as Assistant Manager between 1989 and
the safest public space in Santiago, and a reference
1992. Then, until 1994 he was Corfo’s Adminis-
at a domestic and International level. Also, during
tration and Finance Officer, as well as Financial
such term, Metro doubled the number of transpor-
Intermediation Officer, in charge of the so-called
ted passengers per year, from 176 to 344 million.
“second floor bank” of such Governmental entity. He was also the Loans CEO of Banco Estado
During Rodrigo Azócar’s office, Metro S.A. achie-
during the term 1995-1997.
ved a positive operational result every year,
maintaining the record as the only metro in the
In 1991, he was a consultant for the Ministry of
world that, without having large real estate busi-
Economics and he was in charge of the PYME’s
nesses (like its peers in Hong Kong and Singapo-
Financing Program. In 1994, he was a consultant
re) operates without any kind of subsidy. During
for Banco Interamericano de Desarrollo (BID),
Rodrigo Azócar’s office, the Government appro-
being responsible for the design of the second
ved the plan to finance and double the size of the
floor bank of Ecuador’s Corporación Financiera
underground train network in Santiago, with a
Nacional [National Finance Corporation].
US$1,800 million investment.
INDEX
9
10
•
ANNUAL REPORT 2008
Enap Vision
and Mission
•
ENAP is an energy company, wholly-owned by the Chilean State, an integrated
leader in hydrocarbons that provides products and services to satisfy its clients’
needs, and to contribute to the sustainable development of the countries and
communities where it participates, operating in a competitive and profitable
manner.
MISSION
To fulfill the mission, in order to achieve the following aspirations:
VISION
»»To gain the clients’ preference through competitive prices.
»»To achieve leadership as a logistics and/or commercial operator.
»»To ensure a competitive supply, participating in alliances despite its, production
not physically reaching refineries.
»»To profitably participate in all links of the Business chain, minimizing risks.
»»To operate with efficiency and reliability levels, competitively in all the
business processes and support.
»»To replace and increase reserves.
»»To be acknowledged as a leader company in sustainable development.
»»To have a competent, collaborative and committed team.
INDEX
11
12
•
ANNUAL REPORT 2008
Organization
Description
T
he main purpose of Empresa Nacional del
tracts for Oil Operation] mechanism, the Company
LEGAL INCORPORATION, OWNERSHIP AND
Petróleo is the exploration, production, re-
was planning to start exploration at the Coirón,
CONTROL OF THE COMPANY
fining and marketing of hydrocarbons and their
Caupolicán and Lenga Blocks, in association with
Empresa Nacional del Petróleo is owned by the
derivates. Consequently, it carries out activities
the international companies Panamerican Energy
State of Chile. It was incorporated according
throughout the whole value chain of the oil in-
LLC, Greymouth and Apache, respectively.
dustry, including petrochemicals. It also sells
to Law Nº9,618, enacted on June 19, 1950. The
company’s by-laws were approved by Decree Nº
fuels in the retail market in Peru and Ecuador,
Enap Refinerías S.A., in turn, purchases and refines
1,208, issued on October 10, 1950, by the then Mi-
through its associates Primax and Primax Hol-
crude at Refinerías Aconcagua (Concón district)
nistry of Economy and Commerce.
ding respectively.
and Bío Bío (Hualpén district). The Storage and
Oil Pipelines, specialized in oil logistic activities in
The company operates as a commercial entity,
ENAP performs its productive activities through
Chile and Manu company, incorporated in Peru to
with a public law legal framework, and it is ma-
two lines of business: Exploration and Produc-
import fuels from Chile and then sell them in that
naged in an autonomous manner. To this end, it
tion (E&P) and Refining and Logistics (R&L). The
country and Ecuador, through the service stations
has its own equity and juridical existence, and it
first manages the hydrocarbons exploration and
network of the associate Primax, also belong to
relates to the Government through the Ministry
production assets, including the geothermal
this subsidiary
of Mining and, for budget purposes, with the Mi-
prospects; and the second, those of refining and
nistry of Finance.
the associated logistics, that is to say, crude re-
Additionally, the R&L line is in charge of the re-
ception at the ports and transportation, storage
fining and logistics assets in Magallanes, among
and distribution of products.
which are Refinería Gregorio and the gas proces-
quent laws. Its updated wording was approved by
sing plants at the Cabo Negro complex, located 23
Decree Force of Law N° 1, of 1986 by the Ministry
kilometers North of Punta Arenas.
of Mining.
Headquarters
ENAP’s top Management is vested in a Board of
The main management of the Company is carried
Directors formed by eight members, headed by
Enap Sipetrol S.A. belongs to the E&P line, and
Law Nº9,618 has been amended by several subse-
the subsidiary Enap Refinerías S.A. belongs to
the R&L line.
Enap Sipetrol S.A. subsidiary carries out explo-
out at the Headquarters, located in Santiago,
the Minister of Mining. Its Vice-President is the
ration and production activities in Latin America
Chile’s capital city. The headquarters of the subsi-
Executive Vice-President of Corporación de Fo-
(Argentina and Ecuador), and in the Middle East
diary Enap Sipetrol S.A. also operate at the same
mento de la Producción (Corfo) [Production Pro-
and North of Africa (Egypt and Iran).
address.
motion Corporation], an entity that also appoints
Through the E&P line, ENAP exploits the only
Environment
hydrocarbon reserves with commercial value
In Chile, ENAP and its subsidiaries carry out their
to de Ingenieros de Minas de Chile [Chilean Ins-
discovered up to now in Chile, located at the Ma-
activities in an open economy environment, whe-
titute of Mining Engineers], la Sociedad Nacional
gellan Region. In 2008, ENAP was developing a
re any investor may explore and exploit hydrocar-
de Minería [the National Mining Society], and the
strong exploration campaign in this Region, with
bons after entering into a Contrato Especial de
Sociedad de Fomento Fabril [Industrial Promotion
Society], Sofofa.
other three directors. The remaining three direc-
successful results at the Dorado-Riquelme Block,
Operación Petrolera (CEOP) with the State, or af-
where two new natural gas wells were started-up.
ter obtaining an administrative grant. In Chile the-
At the same time, through the Contratos Especia-
re is also freedom to refine, import and distribute
les de Operación Petrolera (CEOP) [Special Con-
hydrocarbon products and by-products.
tors are appointed by private entities, the Institu-
INDEX
•
13
14
•
ANNUAL REPORT 2008
Industrial Processing
EXPLORATION
E&P
A
DRILLING AND
PRODUCTION
•
Lines of Business management enap
1
E&P
UPSTREAM
EXPLORATION
2
4
PRODUCTION
1
CRUDE
MANAGEMENT
MARKETING
GEOTHERMAL
ENERGY
6
1
R&L
DOWNSTREAM
5
RETAIL DISTRIBUTION
PERU AND ECUADOR
3
PURCHASE
OF CRUDE
REFINING AND
LOGISTICS
The main purpose of Empresa Nacional del Petróleo is the exploration,
production and commercialization of hydrocarbons and their derivates.
ENAP carries out its productive activities through two Lines of Business:
Exploration and Production (E&P) and Refining and Logistics (R&L).
REFINING
TRANSPORTATION
STORAGE
DISTRIBUTION
R&L
DOWNSTREAM
Ligth gas
Propane
Butane
INDEX
Ethylene
Propilene
Naphta
Aviation
Kerosene
Gasoline
Diesel
Fuel-oil
Sulfur
15
16
•
ANNUAL REPORT 2008
Enap´s
Board of Directors
1. Rodolfo Krause Lubascher
5. Carlos Álvarez Voullieme
Director
Vice-President
Chemical Civil Engineer
Civil Industrial Engineer
Sociedad de Fomento Fabril
Executive Vice-President of Corporación de
Tax Id.: 4.643.327-0
Fomento de la Producción
Tax Id.: 8.870.274-7 2. Eduardo González Yáñez
Director
6. Iván Pérez Pavez
Director
Corporación de Fomento de la Producción
Mining Civil Engineer,
Tax Id.: 9.164.893-8
Specialized in Mines Exploitation
Chilean Institute of Mines Engineers
3. Ramón Jara Araya
Tax Id.: 6.902.930-2
Director
Attorney
7. Jorge Matute Matute
Sociedad Nacional de Minería
Director
Tax Id.: 5.899.198-8
Tax Id.: 5.334.581-6
4. Santiago González Larraín
Chairman
8. Miguel Moreno García
Civil Engineer
Director
Minister of Mining
Electrical Engineer
Tax Id.: 6.499.284-8
Tax Id.: 5.433.767-1
INDEX
•
17
18
•
ANNUAL REPORT 2008
Enap Group of Companies
Organization Chart
ENAP’S BOARD OF DIRECTORS
ENAP’S AUDITOR
CEO
María Inés Garrido
Rodrigo Azócar Hidalgo*
CORPORATE LEGAL ADVISOR
COMMUNICATIONS MANAGER
Andrés Ocare Flores
Patricia Silva Espinosa
COMERCIAL MANAGER
PLANNING AND MANAGEMENT MANAGER
Gastón Ramos González*
Guillermo del Valle de La Cruz
SERVICES MANAGER
HHRR MANAGER
CFO
Cecilia Aguilera Vega
Christian Kúsulas Cervelló
David Jana Bitran
E&P MAGALLANES
MANAGER
R&L MAGALLANES
MANAGER
MAGALLANES
MAGALLANES
OPERATIONS MANAGEMENT HHRR MANAGER
Víctor Briano Peralta
Luis Boric Scarpa
Danilo Martic Kovacic
ENAP REFINERÍAS S.A.
MAGALLANES
SUPPLY MANAGER
M. Angélica Muñoz Flores Elena Blackwood Chamorro
ENAP SIPETROL S.A.
CEO
CEO
Nelson Muñoz Guerrero
Carlos Cabeza Faúndez
FINANCE AND
MANAGEMENT MANAGER
OPTIMIZATION AND
LOGISTICS MANAGER
PROJECT PLANNING AND
DEVELOPMENT MANAGER
BUSINESS DEVELOPMENT AND
STRATEGIC PLANNING MANAGER
FINANCIAL MANAGEMENT
AND COST MANAGER
EXPLORATION
MANAGER
Daniel Ibarra Moraga
Daniel Ramírez Livingston
Arturo Pardo Ríos
Julio Bertrand Planella
Julio Mayanz Csato
Lisandro Rojas Galliani
REFINERÍA BÍO BÍO
REFINERÍA ACONCAGUA
REFINERÍA ACONCAGUA MANAGER
HHRR MANAGER
OPERATIONS MANAGER
REFINERÍA BÍO BÍO MANAGER
HHRR MANAGER
OPERATIONS MANAGER
Daniel Martínez Bonansco
Vicente García Olave
Juan Pablo Salinas Barrera
Juan Carlos Gacitúa Bustos
Walton Cherres Cornejo
Alfonso Yáñez Macías
Note: On January 2, 2009, Mr. Rodrigo Azócar Hidalgo was appointed CEO, to replace Mr. Enrique Dávila Alveal. Then, on January 28, 2009, Mr. Gastón Ramos González was appointed Commercial Manager, and Mr. Carlos Cabeza Faúndez was
appointed Manager of the Refining and Logistics Line, who replaced Ms. Paula Hidalgo Mandujano and Mr. Sergio Arévalo Espinoza, respectively.
•
Board of Directors and Executive Officers
Remuneration
Board of directors RemuneraTion
IRS Nº
Directors
Figures in pesos 2008
Figures in pesos 2007
6.499.284-8
Santiago González Larraín
0
0
8.970.274-7
Carlos Álvarez Voullieme
0
0
2.421.533-4
Gustavo Cubillos López
1.522.124
7.502.587
9.164.893-8
Eduardo González Yáñez
7.739.525
7.502.587
5.899.198-8
Ramón Jara Araya
0
0
5.334.581-6
Jorge Matute Matute
7.740.557
6.137.245
5.433.767-1
Miguel Moreno García
7.522.496
6.330.871
6.283.668-7
Radovan Razmilic Tomicic
3.300.756
7.309.735
6.902.930-2
Iván Antonio Pérez Pavez
6.624.200
0
4.643.327-0
Rodolfo Krause Lubascher
4.643.435
0
39.093.093
34.783.025
Totals
Executive Officers Remuneration
Indemnity and incentive plans
The remuneration and benefits paid in 2008
In 2008 the Company did not pay indemnities for
to ENAP’s executive officers amounted to $
years of service to executive officers.
1,232.8 million.
ENAP has a Sistema de Renta Variable (SRV) [VaThe positions considered in the above figure inclu-
riable Income System] for its executive officers. de 10 executive officers: ENAP CEO and 9 executi-
The purpose of such a system is to encourage
ve officers that report directly.
them to add value to the Company, improving
team work and individual performance.
The remuneration paid in 2007 to the same officers amounted to $ 1,109.1 million, including 10
To determine such incentive, the factors taken
executive officers.
into account in the model are, the level of
goals achievement, individual results and the
Company’s results.
INDEX
19
20
•
ANNUAL REPORT 2008
History
1945
1950
1954
1959 1960
1962
1966
ENAP CREATION
LOGISTIC FACILITIES
CULLEN GASOLINE PLANT
The team headed by Eduardo Simian
recommended the Corporación de Fomento de la
Producción (Corfo) to create ENAP, to
commercially exploit the ores discovered at
Magellanes. Consequently, the Chilean State
decided to create Empresa Nacional del Petróleo.
The first logistic facilities, for the storage and
distribution of refined fuels were built in Maipú.
The Cullen Gasoline Plant started operating in
Magellanes.
FIRST OIL WELL
CONCÓN REFINING PLANT
GREGORIO MARITIME TERMINAL
Discovery of the first oil well in the country, at
Springhill sector, in Magellanes.
The founding was effected by the team of
explorers headed by engineer Eduardo Simián
Gallet, and it gave rise to new wells
perforations, which turned to be productive.
The Concón Refinery (nowadays Aconcagua
Refinery Plant) is started-up.
Building of Gregorio Maritime Terminal, in
Magellanes.
•
After the discovery of the first oil well in the country, at Springhill
sector, in Magallanes, on December 29, 1945, the Chilean State decided to create Empresa Nacional del Petróleo, which was officially
founded on June 19, 1950, with the enactment of Law Nº 9,618.
1981
1990
2004
The then Refinería de Petróleo de
Concón S.A. merged with the
subsidiary Petrox Refinería S.A.,
to form only one company: Enap
Refinerías S.A. Later that year,
the subsidiary Emalco also
became a part of it.
STORAGE PLANTS
ENAP entered the logistics business, with
storage plants of liquid and gas fuels in Maipú,
San Fernando and Linares. At present, this
activity is carried out through the Storage and
Oil Department, which belong to the subsidiary
Enap Refinerías S.A.
SECOND REFINERY IN THE COUNTRY
SOCIEDAD INTERNACIONAL
PETROLERA S.A.
Inauguration of the second Refinery in the country, located
at the Eighth Region (nowadays Bío Bío Refinery), and
building of the polyduct from such Refining Plant to San
Fernando, in the Sixth Region.
RETAIL DISTRIBUTION
On August 16, 2004, ENAP
announced the acquisition of
the 165 service stations
network that belonged to
Shell in Peru, which later
became Primax distributor.
ENAP is the owner of 49%,
and Grupo Romero of 51% of
this company. This was the
first step by ENAP within the
fuels retail distribution
market.
ENAP created Sociedad Internacional Petrolera
S.A. [International Oil Society] to explore and
exploit hydrocarbon ores in foreign countries,
which at present is Enap Sipetrol S.A. subsidiary.
2008
At the Magallanes area, ENAP
exploits the only hydrocarbon
deposits with a commercial
value in the country.
The company provides oil
and port logistic services
to important clients that
operate in the energetic area.
During the last two years the
company started a strong
exploration campaign of new
gas reserves in Magallanes.
INDEX
ENAP formed new alliances with other
companies to diversify the country’s energetic
sources, such as the incorporation of
Empresa Nacional de Geotermia [Geothermal
National Company], a partnership with the
Italian company ENEL; Energía Andina, with
Antofagasta Minerals; and ForEnergy, with
Consorcio Maderero.
21
22
•
ANNUAL REPORT 2008
»
2008 FISCAL YEAR MILESTONES
01
JANUARY
03
MARCH
01|10|08
03|10|08
03|12|08
03|25|08
CLEAN DEVELOPMENT MECHANISM
CREDITS
GUAYAQUIL GULF
NEW TOPPING PROJECT AT
ACONCAGUA REFINERY
FUEL TAX REDUCTION
Enap Refinerías S.A. and Indura S.A.,
announced the building of the first plant to
capture and produce carbon dioxide (CO2),
based on a methodology developed by both
companies and approved by the United Nations
Clean Development Mechanism (CDM) Executive
Board. The plant is located in the outskirts of
the Bío Bío Refinery, with an investment of
more than US$ 11 million.
Within the framework of the official visit to Chile
by the President of Ecuador, Rafael Correa, ENAP
and PetroEcuador entered into an agreement to
assess the gas potential of Guayaquil Gulf.
JULIO
AUGUST
COKER COMPLEX
The Coker Complex, at the Aconcagua Refinery
was inaugurated in the presence of the Ministers
of Mining, Santiago González, and of Energy,
Marcelo Tokman, regional authorities, ENAP’s
executive officers and employees.
08|28|08
AWARD TO ENAP 2007 ANNUAL
REPORT
08|29|08
PECKET-ESPERANZA GAS PIPELINE
The President of the Republic, Michelle Bachelet,
inaugurated the Pecket-Esperanza Gas Pipeline,
which allows the connection –for the first time in
history- to Puerto Natales with the gas pipeline
network that ENAP has at the Magallanes Region.
The new gas pipeline required an investment of
US$ 20.5 million by ENAP.
For the second consecutive year, ENAP was
granted the award to the best Annual Report in
the public companies, category of the contest
jointly organized by the auditors firm,
Pricewaterhouse Coopers, Gestión magazine.
At the thirteenth version also CMPC, Banco
Santander, Banco BCI, Minera Escondida, Endesa,
Enersis, Chilectra, Copec and Compañía General
de Electricidad were granted and award.
09
SUPPLIERS DEVELOPMENT
The Aconcagua Refinery entered into a Protocol
of Agreement to participate in Corfo’ Suppliers
Development Program. Such program will enable
17 Pymes of the Fifth Region to have an access
to the benefits of the program, encouraged by
the Governmental corporation.
09|16|08
COMBINED COMPANY BETWEEN ENAP
AND PETROECUADOR
ENAP and Petroecuador executed in Guayaquil
the deed of incorporation of a combined
company for the exploration and development of
hydrocarbons at Block 40 of Guayaquil Gulf. This
agreement is a part of the Strategic Alliance
established in 2000 between both companies.
07|19|08
07|29|08
NORMALIZATION OF BLOCK IN
ARGENTINA
ENVIRONMENTAL COOPERATION
AT BÍO BÍO
Enap Sipetrol Argentina completely re-initiated
its operations at the Area Magallanes Block,
located at the mouth of the eastern inlet of the
Strait. The production of this deposit had been
interrupted at the end of 2006, when failures
were detected in the main transportation
pipeline of crude oil from the off-shore platforms
to in-land, which connects the AM-3 platform
with the Magallanes Reception Battery (BRM).
10
SEPTEMBER
09|05|08
Pursuant to the stipulation of Law Nº 20,259,
which establishes a transitory reduction of the
specific tax on fuels (published in the Official
Gazette of such), ENAP started applying such
reduction, equivalent to 9.6%, to all fuels it
sells to its direct clients, that is, the wholesale
distributor companies.
07
08
08|04|08
Enap Refinerías S.A. filed the Environmental
Impact Study to the Conama, in order to Build a
new distillation unit at Aconcagua Refinery. The
main purpose of the project is to increase by
90% its refining capacity, and will demand a
US$ 300 million investment.
OCTUBRE
An Environmental Cooperation Agreement, which
considers investments for US$ 23 million for the
period 2008-2012, was entered into by the
Chilean Government, Hualpén Municipality and
Enap Refinerías S.A. The purpose of the
Agreement is to ensure the compliance with the
environmental regulations, as well as working
together with the citizens towards environmental solutions to protect the environment and the
population’s quality of life, especially at Hualpén
district.
11
NOVIEMBRE
09|23|08
10|20|08
11|05|08
ENAP’s Program for the Encouragement of the
Rational Use of Wetland was awarded the first
place at the category “Best Corporate Social
Responsibility Campaign” in the annual contest
carried out by the “Petroleum Economist Awards”
magazine, edited in London.
ENAP and Antofagasta Minerals S.A. (AMSA)
announced the creation of Energía Andina S.A.
company, for the exploration and exploitation of
geothermal energy in the country. The agreement
considers a partnership of 60% for AMSA and
40% for ENAP.
The production tests at Palenque Norte Well Nº 1
ended with an exploratory success, at the
Dorado–Riquelme Block, which perforation had
started on October 8 last. The tests resulted into
a natural gas production of approximately
90,000 cubic meters a day.
WETLAND PROTECTION
ENERGÍA ANDINA S.A.
PALENQUE NORTE WELL N° 1
11|19|08
GPW AWARD FOR ENAP SIPEC
For the third consecutive year, Enap Sipec Ecuador
was distinguished among the best companies to
work at in that country, according to a study by
the company Great Place to Work Institute.
04
APRIL
•
05
MAY
04|22|08
05|08|08
05|05|08
ENERGY SAVINGS CAMPAIGN
PALENQUE 1
CEOP ENAP-METHANEX
IFRS ADOPTION PROCESSS
With a ceremony held at the Aconcagua Refinery, the
Minister of Energy, Marcelo Tokman, officially
launched the Energy Savings Campaign, at a national
level.
Palenque 1 well, of Palenque ore, located at the
Dorado-Riquelme Block, in the continental area of
Magallanes, started its production. This is the first
gas well which production was started-up by ENAP
during this Century, and which finding –last yearconfirmed the success of the new exploration vision
portrayed in the so-called Tertiary Project.
ENAP and Methanex Chile entered into an agreement
with the purpose of requesting the Chilean State the
execution of a CEOP at the Dorado-Riquelme Block,
in the XII Region of Magallanes.
The Convergence Project of the Company’s current
accounting standards to the so-called IFRS
(International Financial Reporting Standards)
international standards was stated with a
video-conference, with the participation of
professionals from ENAP and subsidiaries finance,
operations and human resources areas.
04|30|08
CEOP SIGNATURE
JULY
07|29|08
ACHS AWARD TO THE OUTSTANDING
EMPLOYEE
Asociación Chilena de Seguridad (ACHS) [Chilean
Safety Association] presented the Technical Operator
of Bío Bío Refining Plant, Jorge Araya Basáez, with
the 2008 Annual Safety Award, in the Outstanding
Employee category, due to his outstanding work and
participation in programs adopted to reduce labor
accidents.
11
NOVIEMBRE
06
JUNE
06|04|08
06|23|08
06|24|08
PUBLIC ACCOUNT
GNL FINANCING
ENAP CAPITALIZATION
ENAP delivered its third public account prepared by
it to the joint commissions of Finance and Mining
of the Senate, at the National Congress Head Office,
in Valparaíso.
GNL Quintero S.A. reported that it executed a loan
agreement for US$1,111,000,000, 15-year term, for
the financing of the GNL Re-gasification Terminal
under construction at Quintero. The agreement,
with ten international banks, was structured as a
15-year loan, of the “Project Finance” kind,
implying that it is guaranteed with the project
flows, without additional guarantees by the
partners.
Law 20,278 was enacted, which creates a new oil
prices stabilization fund (FEPCO). This legal body
included US$ 250 million to capitalize ENAP.
06|05|08
PRIMAX ACQUIRES SERVICE STATIONS
FROM REPSOL IN ECUADOR
Primax Ecuador’ subsidiary, formed by Grupo Romero
from Peru (51%) and Enap Refinerías S.A. from Chile
(49%), entered into an agreement with Repsol, for
the acquisition of its fuel and lubricants business in
Ecuador. It includes 123 service stations, owned and
under concession, as well as the fuels marketing for
the industry and aviation, and lubricants
distribution. With such operation, Primax increased
to 187 the number of service stations in that
country, 62 of which had been acquired from Shell,
in 2006.
12|01|08
APPOINTMENTS AT ENAP SIPETROL
BIDDING FOR CRUDE PROCUREMENT
With the purpose of establishing a new
procurement strategy at a regional level, ENAP
Commercialization Department finalized the
international bidding, which ended the process
with the execution of the agreements granted to
Glencore, Mercuria and Vitol companies.
ENAP SIPETROL S.A. IN THE
SECURITIES REGISTER
The SVS accepted the registration of Enap Sipetrol
S.A. in the Securities Regiser Consequently, just as
ENAP Parent and Enap Refinerías S.A., Enap Sipetrol
will be subject to the standards that rule open
stock companies and, consequently, to the control
of the Superintendencia.
SUBSIDIARIES CAPITALIZATION
The Boards of Enap Refinerías S.A. and Enap Sipetrol
S.A. agreed to increase the company’s capital of both
companies, with the capitalization of 100% of the
income accrued as of March 31 last, amounting to
US$399.4 million, and US$ 86.2 million, respectively.
Both capitalizations were duly authorized by the
Ministry of Finance, with Ordinary Office Letter Nº
602, of June 27, 2008.
With such measures, ENAP was able to reverse its
balances to a tax provision of 40% (Law Nº 2,398),
which amounted to US$ 127 million.
DECEMBER
CHAMBER OF OIL, GAS AND CARBON IN
MAGALLANES
11|20|08
06|23|08
06|03|08
12
11|19|08
The constituent meeting of the Magallanes
Chamber of Oil, Gas and Coal was carried out with
the attendance of representatives from eight
hydrocarbon and coal companies operating in the
XII Region, an initiative encouraged by ENAP and
Methanex.
NEW WELL IN EGYPT
Enap Sipetrol S.A. announced the Discovery of a
new oil well in Egypt. This is the Shahd SE-1 well,
of the East Ras Qattara Block. With such finding,
ENAP scored the eleventh producing well in that
country.
The four companies and/or international consortiums
that were granted the bidding for the exploration
blocks at Magallanes officially executed the
agreements with the Chilean State (CEOP). At the
Coirón, Caupolicán and Lenga Blocks ENAP
participates with Pan American Energy LLC,
Greymounth and Apache, respectively.
07
05|06|08
05|19|08
Enap Sipetrol appointed Eduardo Tapia Alvayay as
the new CEO of Enap Sipec Ecuador, in replacement
of Roberto McLeod, who assumed the CEO position
of Enap Sipetrol Egypt.
(Sernam) [National Service for Women]. This
manner, the entire ENAP Group of Companies
participates in the Good Labor Practice Program
encouraged by Sernam.
Argentina, to start drilling the first well of the
Project Hélix E2, of the Area E2, operated by Enap
Sipetrol Argentina.
12|17|08
BIO-CLIMATIC BUILDING
GNL QUINTERO AWARD
12|04|08
GNL Quintero company was granted the PFI 2008
Award, which is granted by the British publication
“HUMAN CAPITAL” 2008 AWARD
ENAP was granted the “Human Capital” award, at the for the crude and gas sector in Latin America. This
award, which will be officially delivered in January
fifth version of the contest that since 2004 is
next, was granted to GNL Quintero “for completing
organized by Universidad Tecnológica de Chile,
Inacap. Other companies that received awards, apart successfully the financing package for US$1,111
million, to build the first re-gasification plant in
from ENAP, were LAN, Chiletabacos, Cencosud,
Ariztía, Masisa, Telefónica, Salfacorp and Gerdau Aza. South America”.
12|17|08
12|15|08
OCEAN SCEPTER PLATFORM
ENAP – SERNAM AGREEMENT
ENAP Santiago and Enap Sipetrol entered into
agreements on "Good Labor Practice with Gender
Equity”, within the framework of Iguala Program,
encouraged by the Servicio Nacional de la Mujer
With the assistance of two state-of-the-art
tugboats, the Ocean Scepter exploration platform
arrived to the eastern inlet of the Magallanes
Strait, in front of the coast of Santa Cruz province,
INDEX
12|19|08
ENAP inaugurated the first Bio-climatic Building in
the country built by a public company, in Punta
Arenas. Apart from its innovative architecture, its
main characteristic is that it may keep the heat and
natural light, allowing for a 68% energy saving, as
compared to a conventional building.
12|29|08
NEW CEO
After four years and five months in the position,
Enrique Dávila submitted his resignation as ENAP’s
CEO. The Company’s Board immediately confirmed the
civil industrial engineer, Rodrigo Azócar Hidalgo, as
the new CEO of ENAP.
23
Human Resources
Management
ENAP
>>Human Resources Management
>>STAFF Pág. 26
Pág. 31
26
•
ANNUAL REPORT 2008
Human
Resources Management
Training
During 2008, the training activities at ENAP were
focused in reducing employees’ competence
gaps. The intention was to optimize the performance of the investment in training guiding it,
according to objective criteria, towards minimizing the deviations among employees’ capabilities, knowledge and skills, and the skills profile
defined as optimal for a productive performance,
according to excellence criteria.
Also, the training effort was focused in the business areas, given the priority of Management to
improve the performance of the functions that
have a direct influence on business results in the
short term.
Progress in this area is shown in graph: 2008
ENAP Training.
During Fiscal Year 2008, the Company was able to
implement a corporate computer tool to manage
the closing of gaps, built on the SAP platform.
Thus, the computer support will not only become
the guarantor that the whole training is justified,
through a gaps reduction process, but it will also
help to perform a strategic and operational management of the development actions.
•
ANNUAL REPORT 2008
It is ENAP’s intention to generate the conditions for employees to
contribute to increase productivity and operational efficiency, in order to move forward to a higher level of competitiveness of the
Company within the current market.
2008 ENAP TRAINING
Nº OF TRAINED
EMPLOYEES
INVESTMENT
EMPLOYEES WITH
DEFINED
COMPETENCE GAPS
TRAINING ORIENTED
TO CORE BUSINESS
PROCESSES
TRAINING ORIENTED
TO CLOSING GAPS
ENAP
MAGALLANES
ENAP
SANTIAGO
ENAP
SIPETROL
ACONCAGUA
REFINERY
BÍO BÍO
REFINERY
964
132
87
802
606
$255,1
$90,1
$131,1
$333,2
$253,9
91,6%
57%
63%
81,4%
93,5%
63%
22,4%
39,7%
81,7%
67,7%
83%
45%
76%
80,5%
95,2%
INDEX
27
28
•
ANNUAL REPORT 2008
PERFORMANCE MANAGEMENT SYSTEM
»
MANAGEMENT AND LEADERSHIP
01
PLANNING
02
FOLLOW-UP
03
ASSESSMENT
04
FEED-BACK AND
ACTIONS DESIGN
•
ANNUAL REPORT 2008
ENAP’s commitment with the personal and technical development
of its employees is based on the conviction that “productivity is a
result of quality of life and work accomplishment”.
Performance Management Model
In the case of Department heads, the system con-
addictions, mourning, among others); in orga-
templates their assessment also by the manner in
nizational origin factors (absence of leadership,
The Human Resources Management designed
which they manage performance, the closing of
labor harassment situations, lack of acknowled-
a performance management model to move
competence gaps and the labor climate of their
gement, etc.), and factors originated by the
towards the following purposes:
working teams.
employee’s physical health (people that go to
»»To improve individual and team performance,
Quality of Life Program
work under disabling physical conditions).
»»Efficiency in the alocation and use of the resources , to improve quality of life. This strate-
favoring people’s labor development and the
ENAP’s commitment with the personal and tech-
gic axis intends to privilege initiatives aimed to
»»To manage people’s contribution, provided that
nical development of its employees is an answer
optimize the efforts focusing, so as to maximi-
the Performance Management System (SGD)
to the conviction that “productivity is a result of
ze their impact, to re-design and achieve effi-
contributes to combine their attitude with the
quality of life and work accomplishment”.
fulfillment of the business’ goals.
dance with its mission and values.
ciency in the benefits alocation processes, and
to improve the management control systems of
strategic purposes of the organization, in accorA Quality of Life Program was designed during
2008 for ENAP’s employees, which was based on
the different programs and initiatives.
»»The assessment or certification of the advan-
four priority crucial points:
ces in quality of life under significant and ac-
mension. On the one hand, it contemplates the
»»ENAP Healthy Company, which purpose is to
mention SA 8000 certification, on labor laws
employees or their teams contribution to the
favor those initiatives aimed to improve occu-
compliance (derived from RSE 26000 standard),
achievement of the business goals. On the other
pational health, as well as safety and risks pre-
the code of good labor practice and non-discri-
hand, it considers the development of desira-
vention.
knowledged standards. Among them, we may
This system has been conceived in a double di-
mination (BPL), originated by the 2006 Presi-
ble behaviors, that Department heads consider
»»Prevention of “labor presence”. This repre-
dential instructive, coordinated by the Servicio
appropriate to achieve an excellent performance.
sents an action aimed to minimize the emplo-
Nacional de la Mujer [Women National Service]
Regarding the latter, the model considers the in-
yees’ physical and emotional states that com-
and the certification of healthy working places
corporation of goals and indicators directly rela-
promise the success of the tasks performed,
by the Ministry of Health.
ted to the competences of the employee’s com-
which origin is in psycho-social factors related to
petences profile.
personal and family crises (over-indebtedness,
INDEX
29
30
•
ANNUAL REPORT 2008
EMPLOYEES COMPOSITION AT ENAP’S HEAD OFFICE1 2008
ENAP
ENAP
HEAD OFFICE
MAGALLANES
Nº CEOS
Nº CEOS
Nº CEOS
Nº HEADS OF DEPARTMENTS,
DIRECTORS
DIRECTORS
DIRECTORS
6
25
PROFESSIONALS
17
TOTAL
5
11
23
PROFESSIONALS
6
48
together with the above, to manage and effi-
PROFESSIONALS
ment commitments assumed for year 2008.
ciently control the Human Resources Manage-
23
Collective NEGOTIATIONS
During this Fiscal Year, seven collective negotiation processes with the following unions were carried out: Aconcagua Refinery Employees’ Union;
EMPLOYEES
133
TOTAL
181
EMPLOYEES
EMPLOYEES
1.075
1.208
TOTAL
TOTAL
1.109
1.290
Bío Bío Refinery Employees Union; ENAP Santiago Employee’s Union; Enap Sipetrol S.A. Union;
Aconcagua Refinery Professionals Union; Storage
and Oil Pipelines Department Employees’ Union
(ex Emalco); and ENAP Magallanes Professionals
Union.
Notes:
1) It includes employees with indefinite and fixed-term contract.
EMPLOYEES COMPOSITION AT ENAP’S HEAD OFFICE2 2007
These bargains together involved 1,880 employees, a figure which is equivalent to approxima-
Exploration &
Production²
Total
Refining &
Logistics³
tely 60% of the Company’s payroll in the country.
All these negotiations were for a 3-year term, or
Notes:
2) It includes employees with indefinite and fixed-term contract.
close to 3 years, and they finalized satisfactorily
for the parties.
Measure of labor climate
Human Resources Integral Strategic Plan
»»Labor Stability with Competitiveness, Integral
A reprogramming of the Human Resources Inte-
Management of Staff and Organizational De-
An organizational climate assessment was applied
gral Strategic Plan was carried out in 2008, for
velopment.
during the year, based on 12 focus groups, with the
the term 2008-2010. This task was carried out
»»People’s Development, Carrier Development,
jointly with the employees’ representatives, with
Permanent Training, Performance Manage-
the purpose of controlling the adequate planning
ment, Compensations.
participation of over 200 employees.
From these results, the business units have started
and execution of the activities to be carried out in
»»Labor Relationships and Quality of Life.
the preparation of plans to improve the labor cli-
each area identified by the Plan. These are:
»»A Balanced Scorecard tool was implemented
mate, which will start operating as from 2009.
•
ANNUAL REPORT 2008
STAFF
ENAP GROUP OF COMPANIES 2008 CONSOLIDATED STAFF, COMPOSITION
PER TYPE OF EMPLOYEE¹
EXPLORATION &
REFINING &
ENAP
PRODUCTION²
LOGISTICS³
HEAD OFFICE
Nº CEOS
Nº CEOS
Nº CEOS
Nº CEOS
Nº DEPT. HEADS
DIRECTORS
Nº DEPT. HEADS
DIRECTORS
Nº DEPT. HEADS
DIRECTORS
25
Nº DEPT. HEADS
DIRECTORS
128
PROFESSIONALS4
PROFESSIONALS4
PROFESSIONALS4
PROFESSIONALS4
EMPLOYEES
EMPLOYEES
EMPLOYEES
EMPLOYEES
TOTAL
TOTAL
TOTAL
TOTAL
11
11
56
5
47
13
13
1.351
14
1.724
1.431
112
1.795
156
TOTAL
27
40
3.187
3.382
Notes:
1) Includes employees with indefinite and fixed-term contract. In 2007, there were 312 employees with fixed-term contracts, and in 2008 they decreased to 122.
2) Includes Enap Sipetrol S.A., with its subsidiaries in Argentina, Ecuador and Egypt.
3) Includes Enap Refinerías S.A. subsidiary
(4) Includes only professional specialized with executive responsibilities
ENAP STAFF EVOLUTION 2007-2008¹
2007
2008
1.383
1.766
149
3.298
1.431
1.795
156
3.382
Exploration &
Production²
Enap Head
Office
Refining &
Logistics³
Notes:
(1) Staff with indefinite contract
(2) Include Enap Sipetrol S.A. subsidiary, E&P Magallanes and Head Office staff
(3) Includes Enap Refinerías S.A. subsidiary (Aconcagua and Bío Bío Refining Plants, Storage and Oil Pipelines Department), R&L Magallanes and Head Office staff
INDEX
Total
31
Business Environment
>>International Market Situation
>>Oil Derived Fuels Domestic Market
Pág. 34
Pág. 39
ENAP
34
•
ANNUAL REPORT 2008
International
Market Situation
110
WTI CRUDE PRICE 1970-2008
IN CURRENT DOLLARS AND IN DOLLARS 2008 PER BARREL
100
New maximum:
100.1 US$/bbl in 2008
Prior Maximum:
97.9 US$/bbl in 1980
90
In US$ per barrel
In US$ of 2008 per barrel (*)
80
70
60
50
40
30
20
10
0
1970
1974
1978
1982
1986
1990
1994
1998
2002
2006
2008
(*) Historic price expressed in 2008 dollars according to the United States CPI.
150
DAILY WTI CRUDE PRICE IN 2008
(US$/BBL)
140
130
120
110
100
90
80
70
60
50
40
30
20
14
ene
28
ene
8
feb
22
feb
6
19
2
mar mar abr
15
abr
28
abr
9
may
22
may
5
jun
18
jun
1
jul
15
jul
28
jul
8
ago
21
ago
4
sep
17
sep
30
sep
13
oct
24
oct
6
nov
19
nov
4
dic
17
dic
•
ANNUAL REPORT 2008
In 2008, the seven-year increase cycle ended, when the crude oil
price reached the highest average price in history, both in terms of
current currency and in terms of currency with an equal purchase
power.
I
n 2008 the worldwide demand for oil showed
year increase cycle ended crude, with oil reaching
In the middle of the year, oil consumption in the
a stagnation as compared to 2007 level, that
the highest average annual price in history, both
United States started to fall, due to the impact of
is, 85.9 million barrels per day (b/d), while the
in terms of current currency, as well as in terms of
the mortgage sub-prime crisis on the budgets and
offer grew in 1 million b/d, but even so, it reached
currency with an equal purchasing power.
investments portfolios of North Americans. This
In spite of the historic record achieved in 2008,
affected by extremely high prices of fuels for the
85.4 million b/d, being the difference supplied
with inventory releases of 500,000 b/d.
crisis led to the destruction of demand, which was
the WTI price trajectory during the year reflec-
final consumer, which at a given moment reached
The nil growth of worldwide demand was a result
ted the end of the raising cycle initiated in 2002:
US$ 4 per gallon in the case of gasoline.
of a drop in consumption by the countries of the
the price increased from US$99.6 /barrel, at the
Organization for Economic Cooperation and De-
beginning of fiscal year, to a maximum US$145.3/
velopment (OECD) by 1.4 million b/d, which was
barrel on July 3rd, to then start falling, first mo-
sumption in Europe continued growing, to start its
offset by an equivalent amount of increase in the
derately until the end of August, then dropping
remarkable de-acceleration only during the third
rest of the world.
The offer expansion by 1 million b/d was origina-
In the meantime, at the beginning of the year, con-
dramatically due to the sudden worsening of the
quarter. During the second half of 2008, Europe had
worldwide economy, to end the year with only
still not received the whole impact of the subprime
US$44.6/barrel.
crisis, and it benefitted from the appreciation of the
ted by an increase at the OPEC by 1.3 million b/d,
euro as compared to the dollar, which offset the
which was offset by a 300,000 b/d production re-
The upward trend during the first half of the year is
impact of the fuels international price increase for
duction in the rest of the world.
partly explained by high growth in the worldwide
European consumers.
Oil Worldwide Market 2007-2008
dynamism of Asia and the Middle East emerging
In August, a turning point in the raising trend
(Figures in daily millions of barrels)
economies, which benefitted from the massive
occurred, with the contraction of the American
consumption of crude oil up to July, boosted by the
2007 2008 Variation
transference of income, as a result of the historic
consumption, and the de-acceleration of the
Demand
85,9
85,9
0,0
oil quotas.
European consumption. The strong decrease of
OECD
49,1
47,7
-1,4
No-OECD
36,8
38,2
1,4
Also, until mid-year, the United States and the
lating inventories for the Beijing Olympic Games
Offer
84,4
85,4
1,0
main developed countries that are a part of the
of August 2008, added to the above. The imports
Ex-Soviet Union
12,6
12,5
-0,1
OECD, continued with the growth cycle initiated
from China continued at very low levels until the
Rest of Non-OPEC
37,4
37,2
-0,2
in 2002, which also contributed to the increase in
end of the year, thus influencing the fuels price
4,3
4,4
0,1
oil consumption and to the escalation in oil prices.
at a worldwide level.
OPEC crude
30,1
31,3
1,2
Inventories Variation
-1,5
-0,5
LGN & OPEC condensated
Source: Department of Energy, U.S.A., “Short Term Energy Outloook
January 2009”
Crude Oil Price
fuels imports from China, that had been accumu-
Another cause for the raise in prices was the
The fact that the United States financial crisis had
dollar depreciation as compared to the euro,
a global effect became apparent also in August,
the Sterling pound and the yen. As a result, the
with the rescue of several American and European
investment funds modified their portfolio inves-
Banks from insolvency, by means of massive contri-
ting in oil and other commodities futures, as an
butions from public funds, while the Central Banks
In 2008, the average price of the International
alternative to cover for a higher inflation in the
injected big resources to the monetary systems.
crude marker, West Texas Intermediate (WTI) was
United States. This speculative phenomenon
US$100.1/barrel, with an increase of 38.6% as com-
caused a feedback on the oil price, accelerating
But in September, the bankruptcy of the Leh-
pared to the average price of 2007, which amoun-
the increase at each stage of the cycle.
man Brothers investments bank, caused a virtual
ted to US$72.2/barrel. This way, in 2008, the seven-
paralyzation of the credits at a worldwide level,
INDEX
35
36
•
ANNUAL REPORT 2008
international market situation
2008 DAILY PRICES IN THE GULF OF MEXICO
ULS Diesel
US$/BARREL
220
Regular Fuel 87
200
180
Fuel Oil Nº 6
160
140
120
100
80
60
40
20
15
ene
31
ene
15
feb
4
mar
19
mar
4
abr
21
abr
6
may
21
may
6
jun
23
jun
9
jul
24
jul
8
ago
25
ago
10
sep
25
sep
10
oct
27
oct
11
nov
26
nov
15
dic
transforming the financial crisis into a global
Because of the natural delays due to travel time
In the case of fuel oil Nº 6, the 2008 average price
economic crisis, aggravating the already existing
and inventory permanence at the refineries, the
in the United States Coast of the Gulf of Mexico
recession in the United States, and dragging the
increase of the OPEC production arrived too
was US$72.9/barrel, and its discount with respect
European countries one by one, and then Japan,
late to stop the escalation of prices during the
to WTI price was US$27.1/barrel. Thus, its relative
to their own recessions.
first semester, and it was neither able to stop on
price worsened as compared to the previous year,
time, so as to reduce the price drop during the
when such discount amounted to US$19,1/barrel.
Consequently, the economic crisis depressed
last quarter of the year.
worldwide consumption during the last quarter
of the year, leading to a dramatic drop in the pri-
In general, the products’ prices followed the
Oil-derived fuels
ce of oil as from the end of September.
crude trend during the year. Nevertheless, there
were important differences in the relative pri-
In 2008 the average prices of gasoline (regu-
ces of the different products, among them, and
Although the main oil exporters grouped at the
lar unleaded 87) and diesel (ULS Diesel) in the
with respect to crude, that are usually unnoticed
OPEC did not officially act to stop the price raising
market of the United States Coast of the Gulf
due to the enormous market price fluctuations
escalation during the first semester 2008 (main-
of Mexico were 105.6 and 123.4 dollars per ba-
in 2008. In order to become aware of the latter,
taining the production frozen at the levels agreed
rrel (US$/barrel) respectively. Consequently, the
it is useful to review the trends observed during
during their inter-ministerial meeting of Novem-
average differences in the product prices with
each semester of the year (see graph: Daily Pri-
ber, 2007), in practice, since June the countries
respect to crude oil were US$5.5 /barrel for ga-
ces 2008 at the Gulf of Mexico).
with a non-occupied capacity started pumping
soline and US$23.3 /barrel for diesel. In the case
more oil, thus making the collective offer grow.
of gasoline, the margin as compared to the crude
During the first semester, the growth in world-
Thus, in July, Saudi Arabia was already exceeding
price was lower than the US$14.1/barrel in 2007,
wide consumption was extremely focused in low
its target production by 750,000 b/d, and during
while the opposite occurred with diesel, which
sulfur diesel, as a consequence of the dramatic
the whole year the OPEC ended producing 1.3 mi-
outdid 2008 margin, in this case US$18.0/barrel
growth of the emerging economies in Asia, and
llion b/d in excess as compared to 2007.
in 2007.
due to problems in the supply of other energetic
•
ANNUAL REPORT 2008
During the first semester, the growth of Worldwide consumption
was extremely focused in low sulfur diesel, as a consequence of
the strong growth of the Asian emerging economies and due to
the supply difficulties with other energetic sources in different
countries.
FUEL PRICES LESS 2008 CRUDE PRICE IN THE GULF OF MEXICO
ULS Diesel
US$/BARREL
42
36
Regular Gasoline 87
30
Gasoline over-production due to
worldwide diesel shortage
24
18
Financial crisis makes
an impact on the US demand
12
6
0
Fuel Oil Nº 6
Gustav and
Ike storms
ene
feb
mar
abr
may
jun
jul
ago
sep
oct
nov
dic
-6
-12
-18
-24
Fuel oil over-production due to
worldwide diesel shortage
-30
-36
-42
sources in different countries (China, Chile, Ar-
Given that the main hydrogen source at the re-
gentina, Uruguay and South Africa), which ended
fining plants comes from the reformation plants
tav and Ike storms, during the last quarter the
demanding more diesel for last resource thermal
(plants that transform nafta into gasoline), the
price dropped with the final declaration of the
power generation.
Mexico due to the successive irruption by Gus-
great demand for diesel with a low sulfur con-
economic crisis in the United States, which is
tent made such reformation plants operate at
the largest consumer of gasoline in the world, to
The above forced the use of the global refi-
their maximum level, thus producing a gasoline
levels below those of crude. As an average, the
ning park at maximum capacity, incorporating
in-excess offer. Consequently, the relative price
margin during the second semester amounted to
less modern refining plants which require to
of gasoline as compared to WTI crude, continued
US$5.0/barrel as compared to WTI price.
process a larger amount of crude oil per each
extremely depressed during the first semester of
barrel of diesel produced. Also, high crude de-
the year (US$5.9/barrel).
mand gave way to a higher ratio of heavy and
Finally, the relative price of fuel oil improved considerably during the second semester, although
sulfurous crude from the Persian Gulf into the
On the other hand, there was a higher premium for
its price dropped in absolute terms, as a result of
refining plants, for the production of the ne-
diesel price as compared to WTI crude (US$25,0/
the lower production of the less modern refining
cessary extra diesel. The above caused that
barre), and as compared to fuel oil and gasoline.
high refining, apart from producing diesel, also
plants, and to the processing of less heavy crude.
Thus, the discount in the fuel oil price as compa-
produced an offer in excess of fuel oil N° 6, as
During the second semester 2008, diesel demand
compared to WTI crude, which was extremely
stopped in many countries, making the relative
low during the first semester of the year (US$-
price of such fuel drop, as compared to WTI crude,
34.0 /barrel).
recording a premium of US$21.7/barrel.
But also, the combination of extra heavy and sul-
In the case of gasoline, although the price grew
furous crude with a demand for diesel with a low
in September, as a result of the production para-
sulfur content required diesel hydrogenization.
lization in the United States Coast of the Gulf of
INDEX
red to WTI price decreased to US$20.4/barrel.
37
38
•
ANNUAL REPORT 2008
•
ANNUAL REPORT 2008
Oil-Derived Fuels
Domestic Market
I
n 2008 ENAP faced complex situations in the
per barrel. Also, during the second semester the
collapse of the Chilean power networks was
surpassed.
domestic market, originated by the shocks
international financial crisis added up, which was
of international prices, which abruptly grew and
the greatest cause for the drop in the prices. (See
dropped from one semester to the other.
previous sub-chapter).
Another fuel that showed an important increase
was the gasoline for vehicles, with a 3.8% over the
While during the first half of the year domestic
In 2008 the domestic consumption of oil-derived
consumption during the previous year. Such in-
demand was affected by the need of supplying
fuels amounted to 19.9 million cubic meters, a fi-
crease is partly explained by the higher consump-
extraordinary volumes of diesel oil for power ge-
gure that reflects a 4.3% increase as compared to
tion experienced during an economic growth year,
neration at the combined-cycle stations, during
the 2007 consumption. Such increase is largely
with the consequential higher productive activity,
a year that had been predicted as dry and with
explained by the greater demand for diesel oil,
in spite of the considerable increase in the price of
problems for hydroelectric generation, during the
especially during the first semester of the year,
this fuel during the greatest part of the year.
second semester this phenomenon disappeared
due to the fact that power companies had to use
and, also, the worldwide demand fell abruptly, as
diesel for thermal-power generation, as a result
The prices of all oil-derived fuels continued with
a consequence of the international financial crisis,
of low availability of hydric resources and to the
an increase trend in the domestic market until
thus making the prices drop fast, accelerating the
nil supply of natural gas from Argentina. This way,
September, 2008, as a result of the prices shock
drop during the last quarter of the year.
diesel consumption in 2008 increased by 6.8%, to-
in the international market. During the following
talling 10.1 million cubic meters.
months, the prices started to drop fast, together
was quoted at US$2.72 in the United States Coast
Nevertheless, the highest domestic diesel con-
that began in the main developed economies, that
with the drop in the crude, due to the recession
So, while on January 2nd, 2008, the diesel gallon
of the Gulf of Mexico, seven months later it was
sumption, ENAP sales in the domestic market
is, the United States, Europe, Japan and the rest
quoted at US$4.12. Nevertheless, on December
were almost at the same level of 2007, with
of the OECD.
31st, 2008 the same diesel gallon was quoted at
6.7 million cubic meters. As a consequence,
US$1.42 in the same market, thus reflecting a 65%
its market share of this fuel decreased from
decrease, as compared to the maximum reached
70.6% in 2007, to 66.1% in 2008. Consequently,
domestic consumption was fuel oil, which in this
in July; and 47%, as compared to the price of the
a part of the increase in the domestic supply of
case reached 2.8%. The volume of this product
first working day of the year.
diesel, and its 6.8% expansion during the year
consumption in 2008 was 2.7 million cubic me-
corresponded to imports, where also private
ters, mainly in boilers of the industrial sector, as
Another product that recorded an increase in
The same phenomenon occurred with all fuels
distributing companies participated, after the
fuel for great size vessels and, to a lesser extent,
and, of course, with crude oil, which in July rea-
logistic capacity of ENAP to import the neces-
for thermal power generation. Kerosen, in turn,
ched the highest price in history, with over US$140
sary additional amounts of diesel to avoid the
showed a slight increase of 0.8%, with a 1 million
INDEX
39
40
•
ANNUAL REPORT 2008
OIL-DERIVED FUELS DOMESTIC MARKET
cubic meters volume. In the case of liquefied pe-
veries that showed the largest decreases were
troleum gas (LPG), consumption was maintained
industrial products (-65%) and LPG (-51.5%). Ne-
at 2.1 million cubic meters.
vertheless, diesel shipments showed an increase
(74%), as well as gasoline (2%). Also, the Company
The consumption of industrial products and other
opened a new market for kerosene, exporting for
oil-derived (solvents and olephins) decreased by
the first time 15,000 cubic meters.
3.1% in 2008, with ENAP having a 100% share in
this sector of the domestic market, with 599,800
Imports
cubic meters.
In spite of the emergency experienced by the
In general, in 2008 ENAP’ share in the supply of
energy sector during the first semester of the year,
oil-derived fuels in the domestic market reached
which forced the extraordinary supply of diesel to
76.7%, thus decreasing 2.2 percentage points as
thermal-power stations, in 2008 ENAP’s absolute
compared to the previous year. Diesel and fuel oil
import figures showed a decrease of 2.6% as com-
showed important decreases, with 4 percentage
pared to 2007, thus reflecting an important turn in
points less, and LPG, three percentage points less.
the domestic demand during the third and fourth
Nevertheless, ENAP’s participation in gasoline
quarter of the year, precisely as a consequence of
supply increased by 7 percentage points, partially
the lower consumption by the thermal-power sta-
offsetting the decrease in the market share of the
tions, and the consumption normalization by the
rest of the products.
rest of the clients.
Exports
Also, LPG import volumes grew in 2008 by 13 %;
kerosene volumes, by 56%; fuel oil volumes, by
On the other hand, in 2008 ENAP’s exports
216%; on the contrary, gasoline volumes decrea-
(mainly to Latin American markets) decreased by
sed by 11%.
7.4%, totalling 1.6 million cubic meters. The deli-
•
ANNUAL REPORT 2008
In 2008 LPG import volumes increased by 13%; kerosene volumes
by 56%; fuel oil volumes by 216%; on the contrary, gasoline volumes decreased by 11%.
DOMESTIC CONSUMPTION
IN MILLION M³
2007
19.106
2008
19.941
DOMESTIC SALES BY ENAP
IN MILLION M³
2007
15.068
2008
15.296
EXPORTS
IMPORTS
IN MILLION M³
IN MILLION M³
2007
2008
1.776
1.661
2007
4.744
2008
5.221
ENAP’S MARKET SHARE IN 2008
120
100
80
60
40
20
0
Liquefied
Petroleum Gas
Vehicles Gasoline
Kerosene
INDEX
Diesel
Fuel Oil
Industrial Products
and other
Liquefied Petroleum Gas
Diesel
Vehicles Gasoline
Fuel Oil
Kerosene
Industrial Products and other
41
Corporate Management
>>Investments
>>Social Entrepreneurial Responsibility
>>Market Risk Factors
>>Summary of Results
>>Agreements With Suppliers and Clients
>>Insurance
>>Distributable Income
>>Dividends Policy
>>Management Summary in Magallanes
Pág. 44
Pág. 48
Pág. 50
Pág. 51
Pág. 54
Pág. 54
Pág. 60
Pág. 61
Pág. 62
ENAP
44
•
ANNUAL REPORT 2008
Investments
T
he investments made by the Company in
The Exploración Gas Cuenca Marina de Valdivia
duction facilities, with the purpose of continuing
2008 were within the framework of the Stra-
project was started in 2008, and the 3-D seismic
with the deposit reserves exploitation.
tegic Plan stipulated for the five-year term 2007–
record of 900 square kilometers was carried out,
2011, and they amounted to US$371 million.
which information is expected to be interpreted
At Área Magallanes, during the first quarter of
during 2009. The access to this information will
2008 the works related to the replacement of the
Of the invested amount, US$176.6 million were
allow ENAP to define the most convenient busi-
marine oil pipelines and the connections to the
invested by the Exploration and Production Line
ness model for its future exploration and deve-
in-land facilities and rigs were finalized. This ore
of Business (E&P), and US$194.5 million by the
lopment. The Carbon Methane Gas project was
production was started-up on March 1st.
Refining and Logistics (R&L) Line of Business. The
also started during 2008, in Magallanes, which
latter includes the capital contributions made to
purpose is to assess the methane gas extraction
the different companies in which the Company
capacity from carbon mantles.
In Egypt, the exploitation of the East Ras Qattara
asset, through the Shahd, Ghard and Rana fields
started during 2008. Also, the exploratory cam-
participates.
In the area of geothermal energy, in 2008 ENG
paign continued, with four new prospects drilled:
started the procedures for the drilling of the first
Shahd SE-1, Rana SE-1, Yara NW-1 and Salma-1. In
deep well at El Zoquete gorge, located at the El Ta-
the former two, new hydrocarbon accumulations
In Chile, the investment made by this Line of Busi-
tio-La Torta concession. In 2008, ENG also started
were found, which gave rise to new commercial
E&P Investments in Chile
ness amounted to US$70.9 million, which includes
the bidding process for a second perforation team
areas for development, which started their exploi-
the capital contribution to the geothermal com-
at Apacheta geothermal concession, engaging two
tation and development during 2008.
panies in which the Company has a participation,
deep exploration wells for perforation in 2009.
In Ecuador, ENAP through its subsidiary Enap Sipe-
that is, Empresa Nacional de Geotermia (ENG)
trol S.A. entered into an agreement with Petroecua-
and Energía Andina. Through Enap Sipetrol S.A.
During this fiscal year ENAP and its Italian part-
subsidiary, in turn, US$105.7 million were invested
ner, ENEL, participated in new bidding processes
dor for the incorporation of a mixed company, ca-
in foreign countries.
through ENG, being awarded the Polloquere new
lled PetroEnap, for the exploration and exploitation
concession, in Arica, XV Region.
of hydrocarbons in Ecuador, under a specific servi-
On October 20, 2008, ENAP and Antofagasta
a 40% participation in this company’s shares, and
cused on Magallanes, at the Dorado-Riquelme,
Minerals (AMSA) incorporated Energía Andina
Petroecuador the remaining 60%.
Arenal and Intracampos- Cullen Lynch Blocks and
company, through a capital contribution of US$15
the Pecket-Esperanza Gas Pipeline, which is 120 ki-
million. ENAP has a 40% participation, and Anto-
The works carried out by Enap Sipec have allowed
lometers long. It was inaugurated in August 2008,
fagasta Minerals has a 60%. The purpose of this
an increase in the recoverable reserves at the
and it allows to ensure the natural gas supply for
company is to carry out exploration and exploita-
Mauro Dávalos Cordero (MDC) deposit. The uni-
Puerto Natales city.
tion of geothermal energy activities, mainly in the
fied fields committee, represented by Petroecua-
Chilean territory.
dor, proposed Sipec to study the extension of the
ces agreement, on September 16, 2008. ENAP has
Inside the national territory, the investments
effected by this Line of Business were mainly fo-
specific services agreement at the MDC field, in
During the year the 3-D seismic record was finished at the Arenal Block, located on Tierra del Fue-
E&P Investments in Foreign Countries
order to produce the new reserves. In November
2008, Enap Sipec delivered a reservoir simulation
go island, on a 1,005 square kilometers area, and
at the end of the year the drilling process of a well
In Argentina, E&P investments were concentra-
study, proposing Petroecuador to carry out the
began. Also, the 3-D seismic record was finished
ted at Pampa del Castillo and Área Magallanes
drilling of four development wells, and two injec-
at Intracampos-Cullen Lynch Block, located North
deposits. At the former, the activity was focused
tion wells, apart from secondary recovery facilities
East of Tierra del Fuego island, where the perfora-
in the perforation of the expected development
to process such crude.
tion of two exploration wells was started.
wells, as well as in the improvement of the proR&L Line of Business
•
ANNUAL REPORT 2008
In 2008 a seven-year price increase cycle ended, when crude reached
the highest average annual price in history, both in terms of current
currency and in terms of equivalent purchasing power currency.
INVESTMENTS
400
164
194
MMUS$
MMUS$
300
236
MMUS$
200
177
MMUS$
100
EXPLORATION AND PRODUCTION
0
REFINING AND LOGISTICS
2007
2008
INDEX
45
46
•
ANNUAL REPORT 2008
investments
E&P-R&L DOMESTIC AND FOREIGN INVESTMENTS
EGYPT
EAST RAS QATTARA
ECUADOR
MAURO DÁVALOS CORDERO
70,9
MMUS$
CHILE
ARICA REGION
ANTOFAGASTA REGION
MAULE REGION
LOS LAGOS REGION
MAGALLANES REGION
143,7
MMUS$
CHILE
ACONCAGUA REFINERY
BÍO BÍO REFINERY
ARGENTINA
PAMPA LO CASTILLO
MAGALLANES
EXPLORATION AND PRODUCTION
REFINING AND LOGISTICS
•
ANNUAL REPORT 2008
Regarding projects in association with third parties, Enap Refinerías S.A. ended the construction of Coker Complex, at the
Aconcagua Refinery, which was inaugurated in August 2008,
with a US$430 million total investment.
this project is to increase the 600 PSI (steam presRegarding this Line of Business, the greatest part
sure) steam generation installed capacity.
Together with the above, ENAP continued with
a series of initiatives allowing the diversification
of the resources invested were devoted to the
Aconcagua and Bío Bío refineries, which belong to
At the Bío Bío Refinery, the Adaptation for Heavy
of the domestic energetic supply. During 2008
the subsidiary ENAP Refinerías S.A., amounting to
Crude project continued, being the main purpose
GNL Quintero S.A., a company where ENAP has a
US$62.5 million and US$81.2 million respectively.
to increase by 2,000 cubic meters the current re-
20% share (in association with BG Group, Endesa
The remaining investments were devoted to com-
fining capacity, with an increase in the processing
Chile and Metrogas), continued making progress
pleting capital contributions to companies with
of heavy crude volumes.
in the construction of the reception, storage
and re-gasification plant for liquefied natural gas
third-parties, to activities of the Gregorio Refinery
(LNG), at Quintero bay.
the Cabo Negro plant, in Magallanes; and to the
The New San Vicente Maritime Terminal is under
Storage and Oil Pipelines Department (DAO),
development, within the context of the Ordering
the latter reporting to Enap Refinerías.
Plan for the Coast Rim of San Vicente Bay. The
This project, built at a cost of US$1,110 million, will
purpose is to increase the bay’s safety, and to de-
allow the supply of natural gas to the Central-
During 2008, the construction of the FCC Gasoli-
crease the risks associated to the operation of the
Southern zone of the country, in a permanent and
safe manner, as from July, 2009.
ne Desulphurization Unit, at the Bío Bío Refinery
current facilities. During 2008 the most important
was completed, which purpose is to provide this
agreements were granted, and the construction
plant with a hydro-treatment Unit for fuel and ga-
was started.
Regarding bio-fuels, ENAP continued making progresses in bio-diesel studies through ForEnergy
soline from the Catalytic Cracking Unit (FCC), in
order to reduce the sulfur content in fuels.
Regarding the projects in association with third
S.A., a company in association with Consorcio
parties, Enap Refinerías S.A ended the cons-
Maderero S.A. Also, Universidad de Chile was in-
Among the projects under development, the
truction of Coker Complex, at the Aconcagua
vited to be a part of the technological consortium
physical execution of the new Alkylation Unit
Refinery, which was inaugurated in August
Biocomsa S.A., which was one of the winners at
was started-up at the Aconcagua Refinery, which
2008, with a US$430 million total investment.
the “National Summons for Entrepreneurial Tech-
purpose is the production of high quality compo-
This Complex allows the gasoline Aconcagua
nological Consortia for the Research on Bio-fuels
nents for the production of gasoline.
Refinery to reduce its production costs, increa-
based on Lignocellulosic Material”, carried out by
sing the use of heaviest crude that is cheaper
Corfo’s Innova Chile Committee.
On the other hand, the Company continued with
than light crude, some of them available in Latin
the design of the Topping 3 Unit Project, which pur-
America. It also allows for the adaptation to fu-
Through this event, the State will contribute with
pose is the construction of a new Topping and Va-
ture demand requirements, that implies a hig-
$1,048 million, for a 5-year term, to carry on with
cuum unit with its supplementary facilities, in or-
her consumption of diesel and fuel, and a lower
the second generation bio-diesel research, which
der to satisfy the future requirements of domestic
consumption of heavier fuel oil.
could be produced on the basis of forestry bio-
was granted a favorable environmental qualifica-
In Magallanes, the R&L Line of Business developed
cultural production devoted to food.
tion resolution by the environmental authority.
investments amounting to US$2.2 million, and the
At the same time, during 2008 progresses were
investments amounting to US$1.8 million.
mass derivates that do not compete with the agri-
demand for oil-derived fuels. In 2008, this project
Storage and Oil Pipelines Department carried out
made at the New Boiler project for the Supplies
Area, at the Aconcagua Refinery. The purpose of
Projects with third parties
INDEX
47
48
•
ANNUAL REPORT 2008
Corporative Social
Responsibility
D
uring 2008, ENAP continued encouraging
employees, as well as their families, to partici-
for Contractor Companies Schedule to their
several initiatives regarding the Manage-
pate in the planting of such tree specimens.
agreements with third parties, which requires
collaborating companies to comply with envi-
ment of Corporative Social Responsibility, a task
that covers the environmental, labor and econo-
Rational Use of Wetland Promotion Plan
ronmetal criteria, in line with its Environmental Management System, according to model
mic areas. The emphasis of such management
was the establishment of dialogue channels with
ENAP continued carrying out the preparation of
the main stakeholders, in order to give an effi-
the Bahía Lomas Wetland Handling Plan, located
ISO 14001.
Environmental Agreement
cient response to the sustainability policies of
at the eastern inlet of the Magallanes Strait, in
the Company's productive activities in the long-
collaboration with the environmental authority
term, in harmony with the social and environ-
of the XII Region and the scientific community.
During this fiscal year, Enap Refinerías S.A.,
mental stances.
During the year, procedures were conducted to
through its Bío Bío Refinery, entered into an
incorporate this Ramsar site to the Hemisphere
environmental protection agreement with the
During this fiscal year the following actions and
Shorebird Network, thus allowing the training
following entities: VIII Region Intendancy, Na-
projects stand out, many of them corresponding
and experience exchange with other important
tional Commission for the Environment, VIII Re-
to initiatives that are under development since
sites of the Region in the future.
gion Health Regional Ministerial Secretariat, and
Hualpén Municipality, for the 2008-2012 period.
previous terms.
This activity obtained international acknowledgeContribution to Santiago re-foresting
ment and, accordingly, in 2008 ENAP was awar-
This agreement contemplates safety measures to
and decontamination
ded the “Petroleum Economist Award”, as the best
minimize the risk for the population, monitoring
RSE initiative by the oil companies in the world.
improvement, follow-up and control of the environmental parameters that make an impact on
In 2008, ENAP maintained its strategic alliance
with Fundación RPA Cultiva, through which it
Environmental management at
the quality of water, air and soil; the assessment
contributes to the re-foresting of the hills in the
contractor companies
of the refinery internal re-ordering alternatives
to reduce the impact of the productive activity
Metropolitan Region. Together with the delivery of 1,300 native species trees, the Company
Aconcagua and Bío Bío refineries continued
on the population, especially regarding odors
committed ENAP Santiago and Enap Sipetrol
applying the Environmental Management
and noise; and putting in place a Program for in-
•
ANNUAL REPORT 2008
formation and environmental collaboration with
Promotion of Energy Efficiency at the
Progress” in its web site (www.enap.cl), which
the adjacent communities.
Magallanes Community
accounts for our management’s different initiatives, in compliance with the 10 principles of the
ENAP Recycles
The Regional Energy Efficiency Table in Maga-
Global Compact regarding labor, human rights,
llanes is a public-private instance, formed by
environmental and anti-corruption matters.
The ENAP Recycles program, developed by the
several organizations, among them ENAP, whose
Aconcagua refinery, is based on the collection of
intention is to join efforts allowing to promote
household waste and batteries. Its development
the efficient use of energy in the Region, in the
has allowed Aconcagua refinery employees to
industrial, commercial and residential areas.
contribute to environmental protection, both at
the workplace and at their households. Waste
For the second consecutive year, ENAP was granted the Best Annual Report award, in the Gover-
Bio-fuels
nmental Companies category, at the contest
With the purpose of encouraging a Pilot Plan for the
house Coopers and the Gestión magazine.
has a commercial value, just as white paper and
soft-drink bottles.
Award for ENAP’s Annual Report
jointly organized by the auditors’ firm Pricewateruse of bio-diesel in the country, ENAP will participa-
Savings and Energy Efficiency Plans
te in the creation of Biocomsa company. At the same
Awards
time, the Company continued working at ForEnergy
In accordance with the Government’s guidelines
company, aimed at developing and producing se-
For the third consecutive year, Enap Sipec Ecua-
regarding the energy crisis, ENAP and subsidiaries
cond generation bio-fuels (bio-diesel) in Chile, based
dor subsidiary was distinguished as one of the
carried out a savings and energy efficiency plan,
on organic waste from the forestry industry.
best companies to work in that country, accor-
which at the Parent resulted into a decrease by
ding to a study carried out by the Great Place to
United Nations Global Compact
Work Institute.
In 2008, ENAP continued with its participation
On the other hand, ENAP’s Cerro Sombrero camp
in order to propose savings and energy efficiency
at the Chilean focus point of the United Nations
(Tierra del Fuego island) was granted the Bicenten-
plans that shall be applied during 2009.
Global Compact. In this sense, the Company
nial Award, as one of the best urban and architectu-
included the information “Communication of
ral works in Chile, during the term 1910 and 1960.
23% in the electricity consumption. At the same
time, ENAP’s Innovation System implemented a
process to capture ideas among the employees,
INDEX
49
50
•
ANNUAL REPORT 2008
Market
Risk Factors
E
NAP participates in the hydrocarbon explo-
markets, so zero cost collar hedges are engaged,
long-term liabilities with a variable rate, mainly
ration and production, and in the produc-
in order to mitigate the variation risk of imported
Libor plus a margin, into fixed rate. As of Dec-
tive chain that follows: refining, transportation,
crude oil, between the shipment date and the es-
ember 31st, 2008, 55% of the financial debt was
storage and marketing of oil-derived products.
timated date for setting the sales price of refined
at fixed rate, due to an increase in the variable
Of these activities, a significant part of the
products. Given the high volatility of crude price,
rate short-term bank debt as compared to 2007,
Company’s operations corresponds to refining
Management has continued with the hedging
with the purpose of financing working capital re-
and marketing of its products in Chile, leading
policy, which allows to minimize the impact of
quirements.
the domestic market supply, with a market share
sudden and significant eventual decreases in
of 77% in 2008. Also, during the last few years
crude price, taking into account the cycle of the
Also, ENAP maintains a position in cross-curren-
the Company has expanded its activities to the
refining business, caused by the phase difference
cy swap type derivate securities, corresponding
export of such products, mainly to Latin Ameri-
between the products sales prices and the refi-
to the October 2002 bonds issuance in the do-
can countries.
ned crude cost.
mestic market, so as to convert its denomination
from UF to United States dollars, and with the
ENAP participates in the international market
The exchange rate is another risk factor of the
purpose of mitigating the exchange rate expo-
for the supply of crude oil and products, a situa-
business, because a great part of the income is
sure. Also, in July 2005, a cross-currency swap
tion that allows the Company to ensure supply
expressed in Chilean pesos, but liabilities are
was entered into to convert UF into US dollars,
and fulfill its commercial commitments. Crude
expressed in US dollars. This factor is minimized
corresponding to the total flow originated by a
oil supply is mainly obtained from countries in
by the hedge on exchange rate of accounts re-
13-year term mortgage leasing on the corporate
South America and Africa, with Brazil, Ecuador,
ceivable and product prices, based on the import
office, maturiting in 2018.
Colombia, Argentina, Peru, Angola and Turkey as
parity expressed in US dollars, a situation that is
the main suppliers. Other relatively regular sour-
periodically analyzed to maintain a competitive
ces are Nigeria and Azerbaijan.
position, taking into account the price and import freedom existing in Chile.
ENAP’s refining plants have the necessary facilities for the reception and storage of this raw
In terms of interest rate risk, the Company main-
material. Regarding the origin of the refined pro-
tains a combination of fixed-rate (mainly long-
ducts imports, they come mainly from the Uni-
term bonds), and variable rate (mainly bi-lateral
ted States, Canada, Japan, Korea and Singapore.
loans, syndicated loans, short-term bank loans
The relevant risks for the business are mainly in
and forfaitings) financial debt. In order to mi-
the refining margin, and the market price fluc-
tigate such risk, ENAP has entered into several
tuations in the crude and products international
interest rate derivative agreements, converting
•
ANNUAL REPORT 2008
Summary
of Results
WTI PRICE EVOLUTION IN 2007-2008
160
140
120
2007
100
80
A
60
combination of factors that negatively affec-
40
ted the business had an influence on ENAP’s
20
results in 2008. The great inventories devalua-
tion, the lack of natural gas from Argentina, the
exchange rate volatility, and the high energy
costs caused an impact mainly on ENAP’s refining business.
The exploration and production business in
Magallanes continued to be affected by a lower
10 24 21 06 20 17 01 15 29 12 26 10 24
ene ene feb mar mar abr may may may jun jun jul jul
07 21 04 18 02 16 30 13 27 11 25
ago ago sep sep oct oct oct nov nov dic dic
2008
SUMMARY OF RESULTS
Figures as of December, 31 of each year, in million dollars
2007
9.019
199
2,2%
-62
50
Sales Income
Operational Result
Operational Margin
Non operational Result
Net Income
2008
12.185
-937
-7,7%
-244
-958
availability of natural gas from Argentina for its
client, Methanex, to whom ENAP provides transportation and processing services.
quence of the international crisis. Consequently,
was negative, by US$937 million, which is mainly ex-
In the refining business, the factors that contri-
ENAP showed a net loss of US$958 million in
plained by the effect on the sales margin of the sharp
buted to the negative results were a higher level
2008, a figure that negatively compares to the
drop in crude and products prices during the second
of diesel imports, and the need to operate with
income of US$50 million the previous year.
half, which caused a loss in the inventory value, due
to the sales of products at market prices, when they
the refining plants at the highest processing level possible during the first semester of 2008,
In the International area, 2008 was a year with
had been produced with a crude bought between
in both cases to supply the thermal-electric and
great oscillations in the commodities prices, rea-
45 and 75 days earlier, at higher prices, thus directly
industrial sectors, as well as an increase in the re-
ching a record high by mid-year, to reach very
affecting the sales margin.
fining costs, caused by the replacement of natu-
low prices by the end of the year. The WTI (West
ral gas in the processes by other more expensive
Texas Intermediate) marker crude price reached
In addition, given the high costs of fuels and the
fuels, within a scenario of depressed internatio-
a monthly average historical price of US$145.3
lack of natural gas from Argentina, ENAP’s refi-
nal refining margins.
per barrel in June, 2008, and then a minimum
neries were forced to use alternative fuels, which
monthly average price of US$41.5 per barrel in
are more expensive (diesel, propane and buta-
Nevertheless, the main negative effect was cau-
ne), which resulted into higher operational costs.
December.
The high costs of power and other products
sed by inventories depreciation that had to be
maintained, and during the second semester
Operational Result
added up to the above.
As of December 31st, 2008, the operational result
In spite of a higher income, by US$3,166 million
were affected by the sharp drop in the international prices of crude and products, as a conse-
INDEX
51
52
•
ANNUAL REPORT 2008
SUMMARY OF RESULTS
BALANCE SHEET VARIATIONS
Figures in million US dollars
(35.1%), higher sales costs were generated, by
31/12/2008 31/12/2007
US$4,289 million (49.1%). As a consequence, the
Current Assets
2.270,7
3.321,2
sales margin was negative, mainly due to:
Net Fixed Assets
2.270,5
1.794,1
Other assets
330,9
325,3
TOTAL ASSETS
4.872,1
5.440,5
Current liabilities
2.776,7
2.852,9
Long term liabilities
1.834,3
1.597,7
Total payable liabilities
4.610,9
4.450,6
1. The sharp drop in prices during the second half,
which meant: i) lower refining margins for the
sale of products at prices lower than those paid
for raw material (crude); and ii) accrued inventories devaluation, both of crude and products.
2. Higher sales costs, associated to the substi-
Minority Interest
tution of natural gas from Argentina with more
Equity
expensive fuels for the refineries operation.
TOTAL EQUITY AND LIABILITIES
-0,2
0,3
261,3
989,6
4.872,1
5.440,5
3. Higher costs associated to diesel imports for
power generation.
Results
Non Operational Result
After the first category income tax (17%), of the
Such decrease was partially offset by an increase
taxes originated abroad and the 40% tax on Go-
in fixed assets, by US$476 million (26.6%).
The non operational result experienced a hig-
vernmental companies (DL 2,398), the net loss
her loss, by US$182 million, mainly due to the
amounted to US$957.8 million as of December,
The lower current assets are a result mainly
greater exchange rate difference by US$131
2008. It is explained mainly by the negative ope-
from the drop in inventories by US$749 million
by the decrease in the current assets, which decreased by US$1,050.5 million, that is, by 31.6%.
million recorded, given the Chilean peso
rational result, whose main component was the
(46.7%), which shifted from US$1,602 million in
depreciation as compared to the US dollar,
sharp drop in the hydrocarbon international pri-
2007 to US$854 million in 2008. Such a decrease
which shifted from Ch$496.89 per dollar at
ces during the second semester. This operational
is a result of the hydrocarbon prices drop bet-
the end of 2007, to $636.45 per dollar at the
loss was strengthened by the non operational
ween one year and the other, and of the decrea-
end of 2008. In addition, higher financial ex-
loss resulting from the effect of exchange rate
se in the procurement and stock volumes at the
penses were recorded, by US$66 million, be-
depreciation.
end of 2008.
Assets
The decrease in the accounts receivable, by
cause of the larger operation volume that had
to be financed. Nevertheless, a greater finan-
US$264 million (27.0%) was also the origin, to
cial income was recorded in a similar amount
(US$62 million), due to the liquidation of a
As of December 2008, total assets decreased, as
a lesser extent, of the current assets decrease,
derivate facility, associated to the UF bond
compared to the same term of previous year, by
which decreased to US$713 million in December
placed in October, 2002.
US$568.4 million, which represents a 10.4% de-
2008, also because of the international drop of
crease. Such lower assets are mainly explained
hydrocarbon prices, and to the lower volumes of
•
ANNUAL REPORT 2008
fuels required in the country during the second
increased by US$237 million (14.8%). This was
Banks, and in short-term notes payable. Such an
half of the year, with the consequent decrease
partly offset by a decrease in current liabilities,
increase is related to the financing of crude pur-
in collectible accounts. In addition, recoverable
by US$76 million (2.7%). which is greatly explained by the reimbursement
Also, current liabilities showed a change in their
of the Fuels Price Stabilization Fund credit, in
composition. Accounts payable (suppliers cre-
December, 2008.
chases at higher prices, which were then sold as
lower priced products.
taxes were reduced by US$74 million (24.2%),
ENAP’s equity as of December 31st, 2008, amoun-
dit) experienced a decrease by US$956 million,
ted to US$261 million, basically as a result of the
mainly due to a decrease, both in the crude and
final loss recorded during the year, amounting to
US$958 million.
The increase in the net fixed assets by US$476
imported products price, as well as in the impor-
million is due mainly to the increase of other
ted volumes during the second semester of 2008. fixed assets, which increased by US$432 million,
On the other hand, liabilities with banks and fi-
mainly explained by the incorporation of the
nancial institutions increased by US$604 million,
by US$250 million (26.8%), because of the already
Coker Plant (Energía Concón S.A.) during the se-
and payable notes increased by US$160 million.
mentioned capitalization that was approved by
cond semester of the year. Such plant belongs to
In addition, an added increase in provisions and
the Congress, in June, 2008, and materialized in
a consortium formed by ENAP and Enap Refine-
withholdings by US$109 million occurred.
November that year.
rías S.A., which built a delayed coking complex at
a site adjacent to the Aconcagua Refinery. Long term liabilities increased by US$237 million,
recording a total US$1,834 million as of Decem-
Also, the construction and infrastructure works
ber, 2008. Such increase is mainly explained by
increased by US$179 million, which represents a
a growth in notes payable and accounts payable 4.2% increase, reaching US$4,494 million in De-
to related companies, which showed a US$418
cember, 2008. These figures resulted from the
million increase, mainly explained by the incor-
implementation of the investment plan for the
poration of the related company Energía Concón
year, and they were partly offset by the US$145
S.A. liabilities, which were financed with a similar
million higher depreciation (4.8%).
to a leasing. Such increase was partially offset by
a decrease in the long term provisions, by US$163
Other assets increased by US$ 6 million (1.7%),
million, mainly caused by a reversal in the pre-
reaching US$331 million as of December, 2008.
vious year provision balance, according to Ordinary Office Letter N° 602, dated June, 27, 2008
Equity and liabilities
by the Ministry of Finance, authorizing the ca-
During the fiscal year, total payable liabilities
S.A. and Enap Sipetrol S.A. subsidiaries.
pitalization of accrued profit at Enap Refinerías
increased by US$160 million (3.6%), to US$4,611
million as of December, 2008, which is mainly
In 2008, ENAP’s financial debt increased by 55%,
explained by higher long term liabilities, that
caused by an increase in the short-term debt with
INDEX
In 2008, the Capital Paid-up account increased
53
54
•
ANNUAL REPORT 2008
Agreements
With Suppliers and Clients
Agreements with suppliers
In 2008, ENAP's refineries satisfied their oil re-
Vitol, Total Oil Trading S.A., Sumitomo, Arcadia,
lesaler distributors: Copec, Shell, Esso, Terpel,
Occidental, Pan American, and Enap Sipetrol
YPF, among other.
S.A, ENAP’s international subsidiary.
Together with the above, in 2008 Enap Refine-
quirements mostly through imports from seven
countries, depending on the price and crude
Agreements with Clients
rías S.A. subsidiary continued selling a part of
its production in the regional markets, particu-
quality conditions. Only 1.3% of such requirements were satisfied by the domestic deposits
Fuels produced by ENAP, and the volumes the
larly Peru, Ecuador and Central America, with
located in Magallanes. Crude purchases were
Company imports to satisfy domestic demand are
exports equivalent to 1.6 million cubic meters, a
made mainly through agreements with interna-
sold to the distributors that operate in the coun-
figure that represents a 5.8% decrease, as com-
tional companies, and through purchases in the
try, through commercial and direct agreements.
pared to 2007 exports.
In 2008, ENAP supplied 76.7% of the fuels do-
The associate Primax, which distributes fuels in
spot market.
The main suppliers were Petrobras, Sonangol,
mestic market, which is equivalent to 15.3 million
Peru and Ecuador, as well as Exxon, Shell, Che-
Ecopetrol, Petrochina, Mercuria, Glencore, Che-
cubic meters. The sales in the domestic market
vron, Trafigura and Ecopetrol are among the
vron, Shell, Trafigura, British Petroleum, Castor,
were made by ENAP through its clients, the who-
main external clients.
Insurance
ENAP and its subsidiaries, Enap Refinerías S.A.
Generales Penta Security S.A.; minor services
and Enap Sipetrol S.A., maintain insurance agre-
(fire at housing plans and personal accidents),
ements covering their physical assets, inventory,
with RSA Seguros Chile S.A. and BCI Seguros
stoppage damage, maritime transportation of
Generales S.A.; life and health catastrophic insu-
crude and products, and civil responsibility.
rance for executive offices and employees with
BICE Vida Compañía de Seguros S.A.; and vessels
The main valid insurance agreements by ENAP
and subsidiaries in 2008 cover: facilities, civil
responsibility and crude and products transportation, with Interamericana Compañía de Seguros Generales S.A. and Compañía de Seguros
chartering, with West of England re-insurer.
•
ANNUAL REPORT 2008
In 2008 Enap Refinerías S.A. subsidiary continued selling a
part of its production at the regional markets, particularly
in Peru, Ecuador, and Central America, with exports for 1.6
million cubic meters.
INDEX
55
56
•
ANNUAL REPORT 2008
Property, plants and equipment
I
n order to comply with its productive purpo-
Magallanes
both in Chile and abroad. These are:
and terminal; a port complex and a shipyard at
Cabo Negro and Laredo Industrial Park; and two
ses, ENAP has its own or leased fixed assets,
In Magallanes, ENAP owns production camps
administrative buildings in Punta Arenas city.
and services facilities at Cerro Sombrero and
Santiago
Cullen, at the Tierra del Fuego island; and at Po-
Enap Sipetrol S.A. subsidiary
sesión, Gregorio, Cabo Negro-Laredo and Punta
7th to 14th floors of Torre Vitacura building, loca-
Arenas district, in the continent.
ENAP’s international subsidiary, Enap Sipetrol
S.A., owns the following assets:
ted at Av. Vitacura 2736, Las Condes. These floors,
where the Main Office and the CEO office, as well
Also, it has concessions for the exploration and
as the corporate and lines of business managers
exploitation of oil and natural gas deposits in this
Argentina:
offices, and Enap Sipetrol S.A. subsidiary’s Main
Region, which are geographically distributed in
Interest in the Area Magallanes (50%), CAM 2 A
Office operate, are under a leasing agreement,
three areas: Tierra del Fuego island, the continent
Sur (50%); Pampa del Castillo (100%); and Cam-
and in waters of the Estrecho de Magallanes.
pamento Central (50%), blocks.
Also, several areas of the company occupy the
4th and 5th floors of Malasia building, located
The company has a large network of oil pipelines,
Also, regarding exploration works in the territory
at Tajamar 183, Las Condes, which is also under
gas pipelines and poly-ducts at the Magallanes
of Argentina, this company has a participation in
a leasing agreement. The associate company Em-
Region (approximately 3,000 kilometers), mostly
the La Invernada (50%) and E2 (33,3%) (ex CAM 1
presa Nacional de Geotermia S.A. (ENG) is also
with their corresponding easements. Such ducts
y CAM 3) blocks.
based at this building.
transport crude and natural gas from the production areas to the gas processing plants, the refine-
Land at Concón
ENAP is the owner of several portions of land
Ecuador:
ries, terminals and storage and distribution centers,
Enap Sipetrol S.A. has agreements with Petro-
both on the Tierra del Fuego island and in the con-
producción and specific services agreements for
tinent.
the development and production of crude oil at
the Mauro Dávalos Cordero (MDC) and Paraíso,
nearby Refinería Aconcagua, which purpose is to
ensure the plant’s operations. Also, it has facilities
Its industrial facilities also include gas proces-
Biguno and Huachito (PBH) fields, of the Ecua-
for its industrial activity in Magallanes, Aconca-
sing plants at Cullen and Posesión, a fractioning
dorian Amazonia Region, being the subsidiary Si-
gua, Bío Bío and Enap Sipetrol branches abroad.
plant at Cabo Negro, and Gregorio refining plant
pec, which controls 100% of this assets in charge
of this operation.
•
ANNUAL REPORT 2008
Egypt:
as well as products delivery and other industrial
terminal; internal pipelines facilities, from tank
Enap Sipetrol S.A.’s subsidiary in Egypt carries
facilities. Also, it has tanks and facilities for the
zones to processing plants, and from these plants
out exploration and production activities at the
storage and delivery of products located in Mai-
to intermediate and final products tanks; pumps
North Bahariya block, with a 50% interest. It also
pú, San Fernando and Linares. The fixed assets of
zone to send products from the refinery to the
participates in exploration activities at the East
this subsidiary are:
Quintero maritime terminal, with crude and products tanks, pumps zones and four anchorages,
Ras Qattara (50.5%), Rommana (40%) and Sidi
Aconcagua Refinery:
including one of mono-buoy type for Suezmax
At this plant, the main crude processing and
vessels; Chemical Laboratory; trucks loading yard;
Irán:
supplementary loading plants are: Topping and
facilities for the Fire Department staff; House
In this country Enap Sipetrol S.A. carries out ex-
Vacuum I, Topping and Vacuum II, Vis-breaking,
for the Fire Department for 24-hour shifts; Fire
ploration activities at the Mehr block, with a 33%
Catalytic Cracking, Continuous Reformation,
Fighting vehicles and elements; specialized main-
interest.
Mild Hydro-cracking (2 plants), diesel and ga-
tenance and repair workshops at all plants; diesel
Abd El Rahman (30%) blocks.
soline, Hydro-desulfurization, Alkylation, Sol-
fuel and gas emergency electric equipment; and
vents Plant, Sulphuric Acid Plant, Isomerization
natural gas interconnection system, to be used as
Sipetrol participates decided unanimously not to
Plant, DIPE Plant (co-owned by Éteres y Alco-
fuel in boilers and to generate steam.
continue with the negotiations related to the de-
holes S.A.), Sulfur Plant (co-owned by Petrosul
In January, 2009, the consortium in which Enap
velopment of Band-e-Karkheh deposit, notifying
S.A.), Hydrogen Plant (owned by AGA), and the
The company has the following real estate pro-
the Governmental company NIOC the activation
Industrial Coker Complex (owned by Consorcio
perties at Concón: Avenida Borgoño 25.777, site
of a clause in the agreement, which granted this
Enercón), which has a main unit, the Delayed
devoted to industry, Lote C-9 Campo Deportivo;
company the possibility to recover the explora-
Coker Plant, and four supplementary plants: Sul-
Lotes S-Sonacol, industry; Lot E7/B6, empty lot;
tion and services expenses
Enap RefinerIEs S.A. subsidiary
fur Plant, Acid Water Treatment Plant, Amines
Dos Norte Lot R-1, industry; Vía 2 to 5, Lot E7/B1,
Regeneration Plant, and Industrial Liquid Waste
empty lot; Calle 2 Norte, Lot R-3, industry; Tierra
Treatment Plant.
del Fuego corner with Magallanes, health; Lot 16
PC14 A1, Mantagua, empty lot; Vía 2 to 5, Lot R-5,
empty lot; Camino Particular ERSA Aconcagua,
In its two refineries, Aconcagua and Bío Bío, this
Also, there are Merox treatment plants for
subsidiary has industrial facilities for crude oil
fuels, kerosene and solvents, gas and oily water
Lot R-4, empty lot; Dos Norte 1015, Lot H-4, emp-
refining, intermediate products processing, pro-
treatment facilities, supplies plant, refrigeration
ty lot; Barros Borgoño 25.175, Rotonda Concón,
ducts quality improvement, treatment plants,
water closed system; torches system, oil pipeli-
Lot 1, offices; Plot 1, Lot 1, inner road, Colmito
maritime terminals for the reception of crude oil,
nes from the refining plant to Quintero maritime
Farm; Plot 1 Well 23, empty lot; Plot 1 Lot 2 inner
INDEX
57
58
•
ANNUAL REPORT 2008
•
ANNUAL REPORT 2008
The nominal storage installed capacity of the DAO storage plants at Maipú, San Fernando and Linares amounts to
270,050 cubic meters; and the used capacity amounts to
256,300 cubic meters.
road, Colmito Farm; Plot 1, Well 25, empty lot. It
Other industrial facilities are oil pipelines for the
Paz (empty lot) and piece of land at the General
also owns parking space 152, at 625 Blanco street,
transportation of refined products from the refi-
Cemetery in Talcahuano, used in facilities for the
Valparaíso; and other two at Avenida Manantia-
nery to San Fernando city, which is connected to
cathodic protection of the oil pipeline.
les LT 3B and ST 420.
Sonacol’s oil pipeline (San Fernando-Maipú) and
pumping stations at the Bío Bío refinery, Chillán
Storage and Oil Pipelines Department:
At Quintero district Enap Refinerías S.A. proper-
and Molina; oil pipelines from the refinery to San
Enap Refinerías S.A. subsidiary has logistic faci-
ties are: Camino Quintero 5245, Avda. Tres Ma-
Vicente maritime terminal, for the transportation
lities and fuels storage plants in Maipú, San Fer-
rías Lote 117 (empty lot); Camino Quintero 5245,
of crude oil and finished products; internal pipe-
nando and Linares districts, which are managed
Avda. Tres Marías Lote 172 (empty lot); y Vía 56
lines from the tanks zones to processing plants,
by the Storage and Oil Pipelines Department
Costanera Turística Quintero (empty lot).
and from these plants to intermediate and final
(DAO). These facilities are provided with tanks
Bío Bío Refinery:
products tanks; gas pipelines for the reception
for the storage of liquid fuels (diesel oil, gasoli-
and delivery of liquefied petroleum gas; motor
ne and kerosene), and liquefied petroleum gas
At Bío Bío refinery the main crude processing
pumps to deliver products from the refinery to
(LPG); interconnection lines with third parties
and supplementary loading plants are: Top-
San Fernando and San Vicente; motor pumps at
tanks and/or with oil pipelines, liquefied gas
ping and Vacuum I, Topping and Vacuum II,
San Vicente for maritime shipment of products
bottling, trucks loading islands and, in general,
Vis-breacking, Catalytic Cracking, Continuous
and for the reception of imported crude through
with all the equipment and systems allowing to
Catalytic Reformation, Ethylene, Diesel 1 Hydro-
the same maritime source; Chemical Laboratory;
carry out the company’s purposes under optimal
treatment, Diesel 2 Hydro-treatment, Cracking
facilities and headquarters for the Emergency
conditions.
(HDG) Fuel Desulfurization, Hydro-cracking,
Response Brigade, which operates with volun-
Benzene Saturation, Isomerization, Propylene
teer permanent employees; specialized works-
Separator and Purifier, CHT Hydrogen Plant (ow-
hops to take care of maintenance and repair of
DAO storage plants at Maipú, San Fernando and
ned by BOC Chile S.A.), Delayed Coking (Coker),
all plants; emergency electric equipment that
Linares amounts to 270,050 cubic meters.
Diesel Hydro-treatment (HDT), owned by Petro-
operates with diesel and natural gas, and a natu-
power Energía Limitada, Bío Bío Hydrogen Plant,
ral gas interconnection system, to be used as fuel
co-ownership with Sigdo Kopper S.A, Mild gas oil
in boilers and furnaces (steam generation).
Also, this subsidiary owns the following industrial real estate in Maipú: Av. 3 Poniente Nº 800
(Camino a Melipilla altura 15.500); San Fernando:
(MHC) Hydro-cracking, co-owned by Técnicas
Reunidas and Ferrostaal.
The nominal storage installed capacity of the
In the Eighth Region, Enap Refinerías S.A is the
Camino a Puente Negro S/N; and at Linares, ex
owner of: refining land, a lot of land located at
Fundo San Gabriel de Longaví.
There are also treatment plants such as Merox
2001 Camino a Lenga, Hualpén district, devoted
for Kerosene, Fuel and Liquefied Petroleum Gas,
to the industry; San Vicente terminal: building
Sodium Sulfhydrate Plant, Sulfur Recovery, Gas
and Lote A-1 Talcahuano; Bío Bío sluice land, lo-
Treatment, Acid Water Treatment, Oily Water
cated at Hualpén district; Cerro Las Pulgas, de-
Treatment, Diesel Desulfurization, refrigeration
voted to tanks area, also located at Hualpén dis-
water supplies, steam and electric energy, cru-
trict; Rest of Lot C and Lot A1, both located near
de oil storage tanks, intermediate and final pro-
the refinery; Pumping terminal at Chillán, Lot 7
ducts.
Ruta 5, Km. 412 Chillán; Pumping Terminal at Molina; Hijuela Rucalhue, comuna San Pedro de la
INDEX
59
60
•
ANNUAL REPORT 2008
Distributable Income
T
he Public Treasury of Chile, through the
Ministry of Finance, is entitled to order the
transfer to the Nation’s general revenues of advances and/or profits generated by ENAP, accor-
ding to the stipulations of Article 29 of Decree
Law 1,263, of 1975.
During 2008, Decree 148 was enacted, dated
January 31, 2008, by the President of the Republic, the Ministry of Finance and the Ministry of
Mining, which established the manner in which
ENAP shall make effective the treasury credits
obtained by virtue of laws 20,063 and 20,115, that
created the oil-derived fuels price stabilization
funds. By virtue of such Decree, the net balance
in favor of ENAP was offset, which amounted to
US$ 38,252,800, and that according to Article 11
of the same Decree such offsetting covers the
profit withdrawn by ENAP corresponding to year
2005, for an equivalent amount.
Due to the above mentioned reasons, in 2008 a
profit transfer was made from ENAP to the Public Treasury, in the amount of US$38.2 million,
through the offsetting of treasury credits in favor of ENAP.
In addition, on January 23rd, 2009, Office Letter 64 by the Ministry of Finance, approved the
transitory interruption, for 2009, of the profit
transfer policy from ENAP to the Public Treasury
(corresponding to the results generated during
2008), stipulated by Office Letter 25 by the Ministry of Finance (dated August 11, 2005), which
stipulated that ENAP must transfer a minimum
of resources to the Public Treasury, either as
income tax (40%) and/or as profit advance, corresponding to 14% profitability over equity, with
previous terms retained earunings.
•
ANNUAL REPORT 2008
Dividends Policy
T
tional financial system, and to rating agencies.
hrough Office Letter 25, dated August 11,
Nevertheless, on January 23rd, 2009, the Minis-
2005, the Ministry of Finance established a
try of Finace, through Office Letter 64, transito-
net profit capitalization policy for the next five
rily interrupted, for fiscal year 2008, the policy
years, as from fiscal year 2006, which is governed
for the transfer of ENAP’s profits to the Public
authorized the temporary interruption, for fiscal
by the rule that is summarized as follows:
Treasury, established in aforementioned Offi-
year 2008, of the 100% transfer policy of annual
ce Letter 25, invalidating the mandatory profit
dividends by the subsidiaries to ENAP.
ENAP must transfer to the Public Treasury a mi-
transfer, to complete 14% profitability over equi-
nimum amount of resources, either as Income
ty with previous terms withheld profit. Such in-
Tax –by means of applying DL 2,398-, and/or as
terruption of the dividends policy in force was
profit advance, according to the following me-
established with the purpose of decreasing the
chanism:
financing requirements for 2009, and to deliver a
In addition, the aforementioned Office Letter 25
support indication to the domestic and Interna-
When profit1 is lower than 14% profitability over equity2
100%
When profit1 is higher than 14% profitability over equity2:
For the amount not exceeding 14%:
100%
For the amount not exceeding 14%:
50%
(1) It corresponds to the profit calculated after the exploitation right, taxes abroad and 17% Income Tax; and before
the 40% Income Tax, established by DL Nº2,398, according to ENAP’s Audited Consolidated Financial Statements,
in US dollars, as of December 31st, of each year.
(2) It corresponds to the total equity, according to ENAP’s Audited Consolidated Financial Statements, in US
dollars, as of December 31st, of each year.
DIVIDENDS PAID-UP TO THE PUBLIC TREASURY
Previous Fiscal Year Final
Profit
MMUS$
Fiscal Year
Profit Advance
MMUS$
Total
transfers
MMUS$ 2008
38,3 (*)
2007
0,0
0,0
38,3
0,0
2006
56,4
0,00
56,4
2005
0,00
0,00
0,00
2004
1,97
95,33
97,30
2003
14,36
146,14
160,50
2002
2,34
70,02
72,35
2001
0,62
59,79
60,41
2000
18,28
62,32
80,60
(*) Charged on previous years profits, and effected by means of the offsetting mechanism authorized by Decree 148, dated January 31st, 2008.
INDEX
61
62
•
ANNUAL REPORT 2008
Management Summary
in Magallanes
E
NAP’s two business lines: Exploration and
Within the framework of the Cretacic model
panies or consortia awarded: Otway, awarded by
Production (E&P) and Refining and Logistics
of Intracampos Project, two wells were drilled
WGM company; Tranquilo IPR-Manas; Russfin,
(R&L) operate in the Magallanes Region. As a re-
(Telken 1 and Kismarey 1). Both were under as-
transferred to Apache; Brótula, and Isla Magda-
sult of fiscal year 2008, the consolidated income
sessment process at the closing of this Annual
lena and Porvenir, the three of them awarded to
before taxes of both lines amounted to US$ 28.2
Report.
Greymouth-Petromagallanes.
Also, within the framework of the Carbon Gas
At the three remaining blocks, the companies
Project, two wells were drilled at Manzano con-
awarded participate in association with ENAP:
million, with the E&P line achieving a profit higher than US$92 million.
Exploration and Production Business Line
tinental area, whose assessment stage is also in
Coirón, with Pan American Energy; Caupolicán,
progress.
with Greymouth; and Lenga with Apache.
thening its natural gas exploration strategy, and
During 2008, work was also done in the study
In the last mentioned blocks, the speed at which
it concentrated its efforts in the optimization of
phase of the 3D seismic obtained in previous
the companies started the job has been remarka-
the production facilities, with the purpose of ful-
years throughout the Magallanes Region. Infor-
ble. So, at Coirón and exploration works with 3D
filling its gas delivery commitments to the clients
mation has been obtained for over 4,000 square
seismic were carried out, and well-drilling pros-
of the Magallanes Region.
kilometers of 3D seismic during the last three
pects were defined for 2009, exceeding the mini-
years, thus allowing the continuity through time
mum investments committed.
In 2008 the E&P Business Line continued streng-
ENAP’s main business in Magallanes is based on
of the exploration challenges.
Consequently, CEOP awarding has made a posi-
the exploitation of a non-renewable resource, that
is why this Line made progress in the urgent cha-
The drilling of 13 new exploration wells in the
tive impact on employment generation and on
llenge of finding and certifying new hydrocarbon
Tertiary Project: 12 at Dorado–Riquelme and 1
new productive opportunities in the Magallanes
reserves, through the development of a recent
at Posesión zone, plus other 10 additional wells
Region, and particularly on new technologies
and new exploratory model, which includes three
in the Palenque area, was planned and shall be
incorporation. In the event exploration is suc-
geologic areas with a potential for gas: Tertiary,
drilled in 2009.
cessful, CEOPs will mean a new contribution
The same was done at the cretacic objective of
and the country.
towards the autonomous energy for the region
Cretacic and the innovator Carbon Gas model.
That year ENAP’s drilled six wells at the Dorado-
Springhill formation, defining two new locations
Riquelme Tertiary Project, at Magellan, starting
for exploration wells at the Intracampos Project,
with the drilling of a seventh, with a high rate
and 5 well locations at the Arenal Project.
In the area of productive optimization, a priority
of exploration success: three were producers
(Palenque Norte 1, Palenque Oeste 2 and Palen-
Productive Optimization
CEOP Bidding
task by ENAP in Magallanes, which was initiated
in 2008, is the Spring-Summer Plan, with its com-
que Oeste 3); two awaited for fracture and later
mitment to contribute, as soon as possible, with
assessment (Palenque Este 1 and Vellón 1). Also,
One of the most significant facts during the last
by mid-year the early production of Palenque
few years in Magallanes was the successful fina-
an additional 500,000m3 gas volume per day. Its
deposit, which had been discovered the previous
lization of the international bidding for new ex-
purpose is to increase the gas volume, in order to
year, was achieved contributing with a new and
ploration blocks, through the Oil Operation Spe-
adequately satisfy the demand for winter sales
significant gas volume. It should be noted that
cial Contracts (CEOP) mechanism. Such process
during winter months.
as of December, 2008, the three Palenque wells
was carried out by the Ministry of Mining, with
that entered into ENAP’s network made a contri-
technical advisory from ENAP. Nine exploration
Such plan contemplates a series of initiatives
bution of 40 million cubic meters.
blocks were tendered for, six of which shall be
towards the facilities optimization (new ducts,
exclusively operated by the international com-
compressors, wells re-entry) that have the pro-
•
ANNUAL REPORT 2008
duction and operations structures under maxi-
in Magallanes organized several on site meetings,
architecture, its main feature is that it may hold
mum stress.
together with employees and supervisors, where
the heat and natural light, allowing a 68% energy
information was delivered on E&P Statement of
savings as compared to a conventional building.
The actions carried out in Magallanes E&P during
Income in Magallanes, on the progress of explora-
2008 required an annual investment of US$53 mi-
tion projects, as well as on production indicators.
In November 2008, ENAP, together with Metha-
llion, almost 100% of what was estimated in the
Analyses on accidents index were carried out.
nex and Geopark, thrived the initiative of founding the Oil, Gas and Carbon Chamber in Maga-
Management Annual Plan, allowing for diversification of the exploration risk, providing a hig-
Environment and Influence on the
her reliability on the gas delivery to our clients,
community
to encourage the development of the hydrocarbons industry in the XII Region.
assets optimization and a better control on the
natural declining of deposits.
In the social and environmental responsibility
area, as well as regarding its influence on the
Refining and Logistics business Line
During the year the regional market was fully su-
llanes, with the purpose of coordinating efforts
Awards
community, during 2008 ENAP Magallanes made
relevant progresses, and was awarded important
As a result of the social responsibility and influen-
acknowledgements.
ce on the community actions, ENAP Magallanes
was granted the following awards in 2008:
pplied with fuels by the Gregorio refining plant
and Cabo Negro plant, plus the contribution by
In the environmental area, the company worked
the other two of ENAP’s refineries located in the
together with Conama on the sustainability ac-
First place in the category Best Corporate Social
central-south area of the country.
tions at Bahía Lomas wetland, the second most
Responsibility Campaign, for the work carried
southern Ramsar site in the world. Progresse
out at Bahía Lomas wetland. This award was
During this fiscal year, Gregorio refining plant
was also made in the influence on the regio-
granted by the international magazine, Petro-
made the necessary adjustments at its Topping
nal community, as well as in risk prevention for
leum Economist, in London, England.
plant, which now allows the processing of hea-
company’s employees.
Special acknowledgement to the Bioclimatic
vier crude, thus adapting to the fact of not receiving crude from the Southern basin of Argentina.
Also, ENAP continued working in the sanitizing
Building at the Architecture Biennial 2008, clas-
The programmed stoppage of this refining plant
of septic tanks with crude, applying the Environ-
sified as one of the best 10 works of ecological
was also successfully effected, and significant
mental Bio-remedy Plan started-up during prior
characteristics in the country.
advances were made in the Quality Manage-
exercises.
Bicentennial Award to Cerro Sombrero small
ment System, as shown by two external audits
town, built by ENAP for its employees’ housing,
approved with honors within the framework of
In 2008, ENAP actively engaged in the Govern-
ISO 9000.
mental-Private Regional Table for Energetic Effi-
because of being one of the best works built in
ciency, leading together with Methanex a com-
the country between 1910 and 1960.
Strategic Dialogue
munications campaign at an urban level, in the
main cities of the XII Region.
In the area of labor relations, the dialogue bet-
With the same purpose of contributing to the sa-
ween Management and employees continued
vings and efficiency in the use of energy, in De-
during the year, and several meetings and gathe-
cember ENAP inaugurated, in Punta Arenas, the
rings were carried out to such end.
Bioclimatic Building. This modern structure is
the first in the country built by a Governmental
On the other hand, the Operations Management
company. Besides its innovative and transparent
INDEX
63
E&P Business Line
>>Management Summary
>>Domestic Exploration
>>E&P in Latin America
>>Middle East and North of Africa
>>Environment and Social Responsibility
>>Enap Sipetrol S.A. Board of Directors
Pág. 66
Pág. 70
Pág. 72
Pág. 76
Pág. 80
Pág. 84
Pág. 86
ENAP
66
•
ANNUAL REPORT 2008
Management Summary
I
Oil Production
n 2008 ENAP’s Exploration and Production
Always in the exploration area in alliance wiht
(E&P) Business Line produced the equivalent
other companies, in May 2008 ENAP entered
to 19.9 million barrels (MM BOE), before applying
into an agreement with Methanex, and then both
the contracts (discounts) in Egypt and Ecuador.
companies requested the Ministry of Mining to
the agreements in Ecuador and Egypt, the oil
This figure is 4.7% higher as compared to 2007.
establish a committee for the negotiation of a
volume produced by ENAP abroad amounted to
After applying the discounts corresponding to
Such increase is explained by a higher contribu-
CEOP, in order to carry out exploration inves-
6.3 million barrels, a figure that represents a 9.8%
tion, of 31.1%, by Enap Sipetrol S.A., mainly due
tments at Dorado–Riquelme. During the rest of
increase as compared to the previous year. This
to the normalization of the activities in the Área
the year, the procedures for the establishment of
result is largely explained by the good performan-
Magallanes deposit, in Argentina, after repairing
such CEOP continued, and its full validity was ex-
ce of the Área Magallanes wells, in Argentina, and
the oil pipeline that transports crude from the rigs
pected by the first semester, 2009.
by the production start-up of Shahd SE-1 well at
East Ras Qattara, in Egypt, which contributed
to inland, while the domestic deposits located at
with an initial flow of 2,640 barrels a day.
the Magallanes Region reduced their production
Another highlight of the fiscal year was the inau-
by 8.2%, as compared to the previous year.
guration, by the President of the Republic, Ms.
Michelle Bachelet, on August 29, of the 120 kilo-
Oil production in Chile (in this case, in the Ma-
In the country, the operational management in
meters long Pecket-Esperanza gas pipeline, that
gallanes Region), amounted to 965,663 barrels in
Magallanes made progresses in the implemen-
ensures the natural gas supply to Puerto Natales
2008, a 3.7% increase as compared to the volume
tation of severeal initiatives that contributed to
city.
produced in 2007. Such increase was due to the
sporadic wells opening programs, at the island
improve gas production, highlighting the production start-up of the Palenque and Palenque Oes-
Regarding the Lago Mercedes project, an agre-
and at the Continent; to a higher contribution by
te deposits, belonging to the Dorado-Riquelme
ement was entered into with Wintershall com-
Posesión deposit (with a decrease in the conden-
block, and to the low pressure gas compression
pany, to assess the technlogy that should be used
sed gas ratio); to the production start-up of Pa-
technology applied in wells of the continental
to exploit this deposit located at Tierra del Fuego
lenque and Palenque Oeste deposits; and to the
area deposits. In addition, the production tests
island. A multidisciplinary team of E&P Line held
higher contributions by the rigs at the Estrecho
at Palenque Norte 1 well ended, as well as at
meetings with such company, in order to propose
de Magallanes, Daniel, Dungeness, Daniel Este
Dorado–Riquelme block, which drilling started
a dynamic production model at the three wells of
Dungeness and Catalina Norte.
on October 8.
the deposit. The results of this work are expected
by the first semester, 2009.
Natural Gas Production
At the same time, the preparation for exploration activities at other blocks of the Magallanes
The implementation of Operational Reliability
ENAP’s natural gas production abroad amoun-
Region, where ENAP participates in association
Policy at all productive centers of the E&P Busi-
ted to 315 million cubic meters (equivalent to 1.9
with foreign companies through the Oil Ope-
ness Line has also been highlighted, whose main
million barrels) in 2008, with a 286% increase as
ration Special Agreements (CEOP) mechanism,
purpose is the detection and mitigation of the
compared to 2007. This sharp increase is mainly
that is to say, at Coirón block with Pan American
active threats, as well as the improvement of
explained by the opening –in March, 2008- of
Energy; at Caupolicán, with Greymouth; and at
operational practice in general, and particularly
the Área Magallanes Asset, in Argentina, after
Lenga with Apache. ENAP has a 50% participa-
of the engineering, production and maintenance
the long preventive closing of December, 2006,
tion in the three blocks.
applications.
and in spite of the production restrictions in the
•
ANNUAL REPORT 2008
nominations by Transportadora de Gas del Sur
lent to 10.8 million barrels), representing a lower
Palenque and Palenque Oeste deposits, in May,
(TGS), of Argentina during the year.
production by 9.2% as compared to the previous
helped to offset this drop.
year. Such lower production is associated to the
Natural gas production in the country amounted
natural decline of the great deposits at Tierra del
to 1,828 million standard cubic meters (equiva-
Fuego and the Continent. The incorporation of
ENAP 2007-2008 OIL AND GAS PRODUCTION
COUNTRY
2007
Argentina
Oil
MBBLS1
3.745,6
Ecuador
TOTAL MBOE
Variation 2007/2008
4.226,9
Oil
MBBLS1
4.136,7
1.632,7
1.632,7
1.638,4
1.638,4
0,3%
0,3%
380,9
380,9
546,8
546,8
43,5%
43,5%
Egypt
E&P INTERNATIONAL
2008
Gas in
MBOE2
481,2
Gas in
MBOE2
1.857,4
TOTAL MBOE
Oil
Gas
5.994,1
10,4%
286,0%
in
MBOE
41,8%
5.759,3
481,2
6.240,5
6.321,8
1.857,4
8.179,2
9,8%
286,0%
31,1%
Magallanes (Chile)
930,9
11.842,4
12.773,2
965,4
10.758,0
11.723,3
3,7%
-9,2%
-8,2%
E&P DOMESTIC
930,9
11.842,4
12.773,2
965,4
10.758,0
11.723,3
3,7%
-9,2%
-8,2%
6.690,1
12.323,6
19.013,7
7.287,2
12.615,4
19.902,5
8,9%
2,4%
4,7%
TOTAl e&p
SIPETROL OIL PRODUCTION (in MBOE)
600
566,4
526,9
520,6
500
483
453
400
2.021,2
567,3
533,6
520,6
2.504,1
3.604,1
3.037,7
4.171,5
544,1
4.715,5
10.000
556,8
5.272,3
6.321,8
5.799,3
527
522,5
1.500,5
300
200
1.000
973,6
520,6
100
0
ene
08
feb
08
mar
08
abr
08
may
08
jun
08
jul
08
INDEX
ago
08
sep
08
oct
08
nov
08
dic
08
100
Monthly
Accrued
67
68
•
ANNUAL REPORT 2008
MANAGEMENT SUMMARY
MAGALLANES OIL PRODUCTION (IN MBOE)
100
89,9
83,8
82,4
82,2
80
78,8
569,2
491,8
722,8
79,3
643,5
74,3
77,4
74,7
965,4 1.000
84,6
807,4
886,8
78,5
79,4
413,1
60
330,6
248,4
40
158,5
20
0
83,8
jan
08
feb
08
mar
08
apr
08
may
08
jun
08
jul
08
aug
08
sep
08
oct
08
nov
08
dec
08
100
SIPETROL GAS PRODUCTION (IN MBOE)
250
215,8
200
179,1
556,3
144,7
160,2
150
126,8
340,8
735,3
951,2
212,5
205,9
1.369,6
1.157,1
217
1.586,6
10.000
237
1.857,4
1.000
411,5
180,5
100
100
70,8
27,8
50
27,8
0
jan
08
53,7
25,9
feb
08
mar
08
apr
08
may
08
jun
08
jul
08
aug
08
sep
08
oct
08
nov
08
dec
08
GRAPH: MAGALLANES GAS PRODUCTION IN MBOE
1200
1000 979,2
945,9
887,6
886,4
929,3
800
934,1
926,9
5.555,3
600
3.699,2
979,2
400
1.865,6
6.489,4
4.628,5
913,7
7.403,1
10
Monthly
Accrued
100.000
859,3
870
8.262,4
9.132,4
10.758,0
800,4
10.000
826,4
9.958,8
2.811,5
1.000
200
Monthly
0
jan
08
feb
08
mar
08
apr
08
may
08
jun
08
jul
08
aug
08
sep
08
oct
08
nov
08
dec
08
100
Accrued
Monthly
Accrued
INDEX
•
ANNUAL REPORT 2008
69
70
•
ANNUAL REPORT 2008
Domestic Exploration
T
he exploration activity in the country, par-
which shall be assessed during 2009.
Coirón Block: The topography works for 3D seis-
ticularly in the Magallanes and Los Ríos Re-
»»After processing the 3D seismic information of
mic continued, and at the same time, the ope-
gions, continued developing during 2008, with
the Dorado-Riquelme block, the “Production
rator Pan American Energy, negotiated with the
an active drilling and 3D seismic acquisition cam-
Advance of Palenque Deposit” project was filed
landowners the permits to start the 3D seismic
paign. A summary of this activity is as follows:
»»Dorado-Riquelme: At this block, 6 wells were
with the Business and Resources Committee of
registration works as from 2009, corresponding
the E&P Line, which incorporates three wells to
to 700 km2.
production.
Caupolicán Block: The notice of the approval
drilled: 5 extension wells at the Palenque gas
deposit, which initial yields amounted to up to
»»Another project carried out during the year
resolution was pending, which will allow to de-
180,000 m3/day; and one exploration well, Ve-
was the carbon methane gas exploration,
termine the validity date of the exploration stage
llón-1, which resulted in a gas discovery.
which purpose is the evaluation of gas produc-
for this block. In the meantime, ENAP continued
»»Intracampos: This block exploration allowed
tive capacity in a pilot area, of approximately
delivering to the partner Greymouth the techni-
the completion of the 3D seismic campaign, in
800 Km2, in the Magallanes continental sector.
cal information to reprocess 2D seismic.
a 1,000 km2 area, and 60% of it was carried out
During the year a decision was made toward
during 2007. With such information, towards
limiting this pilot plan to the two wells drilled
Lenga Block: The registration of 720 km2 of 3D
the end of the year two exploration wells were
during the term, which will be assessed during
seismic ended during the term. Then the reme-
drilled, that will be assessed in 2009.
2009, for which purpose a hydraulic fracturing
dial operation works started, which consisted in
procedure shall be effected, as well as a water/
roads, fences, gates, etc. repair. Also, the field in-
gas production phase.
formation for 2D seismic reprocessing continued
»»Arenal-Punta Baja: During the year 1,000 km2
of 3D seismic were acquired. Towards the end of
being delivered to the partner Apache.
the year the exploration drilling campaign was
started-up, which shall continue during 2009.
CEOP Agreements
Geothermal Energy
»»Valdivia: The exploration activity forced the
acquisition of 1,000 km2 of 3D seismic for the
Regarding the CEOPs in which ENAP participa-
North sector of the Valdivia Basin. The first
tes as non-operating partner, the situation in
The procedures for the drilling of the first deep
analyses show an interesting gas potential,
2008 was as follows:
well at Quebrada del Zoquete, located in the
•
ANNUAL REPORT 2008
Second Region, started in 2008. This concession
A bidding process started in March, 2008, for
During 2008, ENAP and its partner ENEL partici-
belongs to Geotérmica del Norte S.A., where
a second drilling team at Apacheta geothermal
pated in a new bidding processes through ENG,
ENAP has a 47,5% participation. To this end the
concession, engaging two deep exploration wells
being granted the concession of Polloquere 2 ex-
services of Perforaciones Santa Barbara (PSB),
to be drilled during 2009. The awarding company
ploration, in the Arica Region. It is estimated to
from El Salvador were retained.
was Geotec Estrella.
carry out the first thermal gradient well at the
beginning of 2010, once the preliminary exploration studies have ended.
This project was authorized by the Environment
In the meantime, Empresa Nacional de Geoter-
National Commission of the Second Region, An-
mia S.A. (ENG), where ENAP has a 49% parti-
tofagasta, and it has been granted the correspon-
cipation, decided to interrupt the program of
On October 20, 2008, ENAP and Antofagasta
ding sector permits, allowing for the performance
deep wells exploration at Chillan and Calabozo
Minerals S.A. company incorporated Energía
of deep drilling activities. Zoquete 1 well drilling
concessions, proposing to first drill a thermal
Andina S.A. company, which started its activities
was scheduled for the first quarter, 2009.
gradient well at each of them during 2009, with
with a US$15 million capital. ENAP has a 40% par-
the purpose of obtaining a greater background
ticipation in this company.
During the fiscal year Geotérmica del Norte S.A.
on the type of reservoir and the existing tempe-
submitted an application to the Ministry of Mi-
ratures.
At the end of fiscal year 2008, Energía Andina
S.A. had two concessions: Tinguiririca A and Tin-
ning for a geothermal exploitation concession,
in the Apacheta area, based on the results of
ENG submitted an application to the Ministry
geo-chemical studies, and the drilling of the gra-
of Mining for an exploitation concession for the
dient well carried out in 2007, which had shown
Calabozo area, in the Seventh Region, after fina-
the existence of a reservoir at a 212°C tempera-
lizing the two-year additional term of the explo-
ture. This application had a successful result in
ration phase. Towards the end of fiscal year, ENG
January, 2009, with the granting of the exploita-
had not yet received a reply to this application by
tion concession.
the Ministry of Mining.
INDEX
guiririca B.
71
72
•
ANNUAL REPORT 2008
E&P in Latin America
ARGENTINA
Despite the above, in March 2008, the Ministry
The Área Magallanes deposit re-started pro-
of Economy and Production issued Resolution
duction by March 1st, timely complying with
Enap Sipetrol Argentina subsidiary acts as the
127, that allows gas exports provided that the
the commitment undertaken. During the next
operator –with a 50% participation- of the ex-
domestic market is satisfied, raising export wi-
months, this deposit gradually entered into a
ploitation concessions at the Área Magallanes
thholdings to 100% the maximum price of the
production regime, to recover its whole poten-
and at the CAM 2 A Sur, and with a 33.33% share
valid import agreements.
tial by the middle of the year. Such works, plus a
series of operative adaptations, as well as the op-
in the Exploration Permit E2 (ex CAM 1 and CAM
Together with the above, in 2008 the Company
timization of the production processes, allowed
faced pressures from the unions for salaries
for production levels higher than those shown at
At the San Jorge Gulf basin the company is the
adjustments, far above the official inflation in-
interruption time (December 12, 2006).
holder and operator of 100% of the exploitation
dexes. Particularly significant was the strike by
concession of Pampa del Castillo-La Guitarra.
the oil unions in May, which stopped the produc-
In May the deposit production was affected by
Also, the company participates as non operating
tion of the entire province of Santa Cruz for over
an association strike, which paralyzed the whole
partner, with a 50% participation in the exploi-
20 days.
production of the Santa Cruz province. 3), all of them in the Southern Marine Basin.
tation concession at Campamento Central Cañadón Perdido, where YPF S.A. is the operator.
Notwithstanding the above, in 2008 Enap Sipetrol
Given the difficulties to obtain the crude export
continued with the identification process of ex-
permits, and given the requirement by the autho-
The company participates as non operator part-
ploration and production business opportunities
rities from Argentina to sell the crude in the local
ner in the Neuquén basin, with a 50% partici-
at Neuquén, San Jorge Gulf basins and Southern
market, (according to Resolution 394), during the
pation in the Province Exploration Permit of La
Basin. At the same time, the assessment of growth
months of September and October, the necessary
Invernada area, which is operated by Wintershall
opportunities of the current assets continued,
works were carried out to comply with such stipu-
Energía S.A.
where important progress was made in the CAM-
lation and deliveries to Petrobrás Energía S.A., at
2 A Sur and Pampa del Castillo-La Guitarra areas,
Cerro Redondo, started in November.
During 2008, the inconvenients associated to the
and particularly in Area E 2, where the working
energy crisis and to several decisions made by
program and the exploration locations were defi-
the authority continued in Argentina, being par-
ned. Also, the assessment of CAX II Area (located
the total production of gas was sold in the do-
ticularly significant the impact associated to Re-
at the Southern Basin) continued, which bidding
mestic market. Nevertheless, due to restrictions
solution 394 of November, 2007, that established
remains postponed.
Gas exports o Chile continued interrupted, and
in the gas transportation capacity, the production in the Area was restricted to values under
a withholding regime to the export of crude and
derivates, causing the crude sales price in the do-
Área Magallanes Argentina
its maximum potential. At the same time, a con-
mestic market to remain below US$42 per barrel,
The production at the Área Magallanes deposit
tract was entered into with Transportadora de
for Escalante type crude; and US$47 per barrel for
amounted to a total of 728,785 barrels of crude,
Gas del Sur (TGS) for the recovery and sales of
Medanito crude, while during the first semester
and 255.8 million cubic meters of gas.
per barrel in the international markets.
fuels extracted from the gas flow at Faro Vírgenes plant, which made a significant contribution
2008, the average price of crude exceeded US$100
During the first months of 2008, the repla-
to the Subsidiary’s income.
cement works of the marine oil pipelines and
On the other hand, gas exports from the Southern
the connection to the inland and rigs facilities
Within the quality management area, a Collec-
Basin in Argentina continued interrupted by rea-
were finalized. Such works had forced to a pre-
tion of Disagreements, revealed by the different
son of an instruction by the Undersecretary of
ventive interruption in production as from De-
authorities, was carried on by performing the
Domestic Commerce of June, 2007.
cember, 2006.
working program to overcome them.
•
ANNUAL REPORT 2008
In 2008, Enap Sipetrol continued with the identification of exploration and production business opportunities at Neuquén, Golfo
San Jorge and Southern basins.
CAM-2A Sur
prospect Helix E2 was completed, identifying in
quence of the management, and of a series of
The production at Poseidón deposit amounted to
detail the location of the first exploration wells
optimization tasks, the drilling campaign was
a total 54,654 barrels of crude, and 54.1 million cu-
to be drilled, also completing the soil mechanics
completed with significant advances, allowing
bic meters of gas, adding up to a production in the
studies and environmental permits.
for the drilling of other five wells, in addition to
those originally estimated.
equivalent to 373,000 barrels. This deposit was
maintained under normal operation within the
Also, during the year a drilling rig was contrac-
volumes estimated for the year. A 100% of the gas
ted –after an international public bidding sum-
Campamento Central Cañadón Perdido
production was sold in the domestic market of Ar-
moned at the end of 2007- with the American
During 2008 the sales process of Enap Sipetrol
gentina, by virtue of an agreement with TGS.
company Diamond Offshore. At the end of 2008,
Argentina S.A. participation in this asset began.
the Ocean Scepter rig started with its first works
In the meantime, the activity continued focused
Crude production was exported to ENAP un-
at Aurora Projects, by YPF S.A. and Hélix E2, by
on the secondary recovery projects, on wells re-
til September, and export permits for the next
Enap Sipetrol Argentina S.A.
covery and on the production facilities improvement. Crude production amounted to 1 million
months were not obtained. Due to the above situation, connection alternatives to the domestic
At the same time, with the execution of the Dri-
market were under study, which are estimated
lling Agreement with Diamond, Enap Sipetrol
barrels.
to be assessed and implemented within the first
Argentina, as the representative of the Transi-
The asset sales process is carried out through
months of 2009.
tory Union of Companies (UTE) called “Energía
Scotia Waterous advisor, retained by the parent
Argentina S.A. – Enap Sipetrol Argentina S.A.
ENAP. For this purpose, a working team was
- YPF S.A. Unión Transitoria de Empresas E2”,
constituted by Enap Sipetrol S.A. and Enap Sipetrol Argentina S.A. professionals.
It is worth remembering that in 2007, the static
and dynamic models of the reservoir were com-
the Operator of E2 Area, entered into 30 related
pleted, and the possibility to drill two additional
and supplementary agreements for the offsho-
wells to the gas cap was determined, in 2009.
re drilling task. Among other, for the tugboats,
Of the offers received, the most convenient was
These wells would contribute with a double gas
helicopters, company man, marine coring, dry
the one by a local company, which conditioned
production, and they would allow to extend the
location and communications services. It should
its offer to the granting to YPF S.A. of the Area’s
useful life of the deposit, improving its economy.
be noted that several of these agreements were
operation. In spite of the actions carried out by
Nevertheless, due to a risk in the gas marketing,
entered into jointly with YPF (as the Operator of
all involved parties, YPF S.A. did not accept to
such alternative had to be postponed, and for this
the Aurora Project), thus achieving an important
transfer the operation of the area, consequently
reason, after developing different analyses, Enap
synergy for both projects.
the offer became overdue.
Sipetrol Argentina S.A. decided to acknowledge
the productive impediment of this asset, with a
Pampa del Castillo-La Guitarra
Given the difficult international economic con-
US$7.1 million devaluation.
The activity at this deposit was focused in the
text, and the decrease in the oil prices during the
drilling of the estimated wells under develop-
second semester of 2008, it was not advisable to
E2 (ex CAM-1 - CAM-3) Area
ment, and in the improvement of the production
re-start the asset’ sales process.
Enap Sipetrol Argentina S.A. is the operator of
facilities, with the purpose of continuing with
E2 Area in the Marine Southern Basin, by virtue
the deposit’s reserves exploitation. Crude pro-
La Invernada
of the Association Agreement (entered into in
duction for the year was 2.3 million barrels.
During this fiscal year the Company continued
with the 3D seismic interpretation studies, and
September, 2006) with the State company from
Argentina Enarsa, and YPF S.A, confirming the
The drilling campaign was composed of 13 wells,
with the assessment of the area potential, within
previous agreement entered into in February,
achieving a relevant reserves net incorporation,
the exploration term postponement, wth a 15UT
2006. During 2008, the technical assessment of
particularly at Pampa Norte Area. As a conse-
commitment (equivalent to US$75,000), granted
INDEX
73
74
•
ANNUAL REPORT 2008
E&P IN LATIN AMERICA
at the moment by Neuquén Province. Having
Regarding this matter, six new business oppor-
(MDC) field and of the Quito offices. A staff as-
complied with all the commitments undertaken,
tunities were activated, three of them requiring
sessment was also carried out, including orga-
and not having detected any potential explora-
to enter into confidentiality agreements. Among
nizational competences, techniques, objectives,
tion according to the projections, in 2008 the de-
them are the clauses within the framework of
culture and general performance.
cision was made decided to begin a withdrawal
the strategic alliance with the Governmental
process (farm out) by Enap Sipetrol Argentina in
company from Ecuador, Petroecuador, a com-
To contribute to the organization’s environment,
such area. As a result, no offers protecting the
pany that participates in a combined company
in 2008 the plan “Living Enap-Sipec Culture” was
company’s interests were received.
for the exploration and development of different
launched, which ranked twelfth in the Great Pla-
projects. Among them, the off-shore 40 Block,
ce to Work ranking, in Ecuador.
On September 24, 2008, the operator company
located in the Gulf of Guayaquil zone. The tech-
in the area, WIAR, filed a note with the Underse-
nical and commercial conditions for this Project
cretary of Hydrocarbons and Energy of Neuquén
are on a negotiation stage.
province, requesting for the approval of the total
reverse of La Invernada Exploration Provincial
A 6.2 million barrels production was achieved
Area. An answer by the authority was expected
in 2008, as a result of the implementation of a
for the beginning of 2009.
series of initiatives, such as putting in place two
dual concentric endings, as well as the acidification of wells. At the same time, steps were
ECUADOR
taken towards the consolidation of operational
MDC and PBH deposits
and administrative excellence in this country,
During its sixth year of Management at Ecuador,
highlighting the studies and works to achieve
through its branch Enap Sipec, the Company de-
optimizations in the operation costs (generation,
veloped a growth strategy, without neglecting
maintenance, among others), the certification of
the productivity of the existing assets.
Standard ISO 14001 of Mauro Dávalos Cordero
•
ANNUAL REPORT 2008
To contribute to the organization’s environment, in 2008 the plan
“Living Enap-Sipec Culture” was launched, which ranked twelfth
in the Great Place to Work ranking, in Ecuador.
INDEX
75
76
•
ANNUAL REPORT 2008
Middle East
and North of Africa
•
ANNUAL REPORT 2008
The activities carried out during the year included wells refurbishing and the finalization of the reservoirs simulation model at
the Ferdaus field, which produces over 80% of the block's total
production.
EGYPT
In Egypt Enap Sipetrol S.A. is the operator of the
contributed by the 2007 drilling campaign, and
new prospects for drilling, after the acquisition
North Bahariya block, with a 50% participation;
the studies on the exploration potential allowed
of 3D seismic of 500 km2, and the reprocessing
of East Ras-Qattara, with a 50.5% participation,
for a more accurate re-assessment of the block,
of 1,250 km2. These studies shall continue during
and of Rommana, with a 40% participation. Also,
concluding that a limited growth potential could
2009, so as to define the exploration potential
the Company participates as non operator part-
be expected. With such a background, the sales
and the remaining development of the block.
ner at Sidi Abd El Rahman (SAER) block, with a
process of Enap Sipetrol S.A. participation began,
30% participation.
which ended on the first quarter of 2009
ENAP Sipetrol production corresponding to
the East Ras Qattara block amounted to a total
650,000 barrels of crude.
The North Bahariya and East Ras Qattara con-
The activities carried out during the year inclu-
cessions are located at the Western Desert ba-
ded refurbishing works at the wells, and the fi-
sin, while the Rommana block is located at the
nalizing of the reservoir simulation model of Fer-
Rommana Block
North Extreme of Sinai Peninsula. On the other
daus field, which produces over 80% of the total
This 6,184 km2 block is located at the North part
hand, the SAER block is located off-shore, in the
production of the block.
of Sinai peninsula, and it was awarded to the
consortium formed by PTTEP (30%), Centrica
Mediterranean Sea, west of Alexandria.
Enap Sipetrol production at the North Baha-
(30%) and operated by Enap Sipetrol (40%) at
At the East Ras Qattara block the drilling cam-
yira block amounted to a total 960,000 crude
the biddings round campaign by the Egyptian
paign of 5 exploration wells continued, and in 3
barrels in 2008.
EGAS, the previous year.
of them oil was discovered, in two new deposits
(Shahd SE and Rana SE). Both deposits shall be
East Ras Qattara Block
The contractual commitment establishes the
developed during 2009.
After the discoveries made during 2007, and the
acquisition of 3D seismic for 1,000 km2, as well
creation at the end of the year of the operating
as the drilling of six wells during the first explora-
At the SAER block, Edison Gas operator started
company (joint venture) PetroShahd, during
tion stage, which has a 3-year duration.
the acquisition of the 3D seismic campaign (last
2008 the exploitation of the asset began through
days of December). This campaign contemplates
the Shahd, Ghard and Rana fields. Also, an explo-
The original activities plan was postponed in
ration campaign continued, with the drilling of
2008, because the area authorized by the military
four new prospects: Shahd SE-1, Rana SE-1, Yara
permits does not contemplate the acquisition of
At the Rommana block, located at the Mediterra-
NW-1 and Salma-1. The two first discovered new
seismic. The activities at this block were focused
nean Sea, the permits by the military authority
hydrocarbon accumulations, that gave rise to
on geology and reprocessing studies, apart from
to start the 3D seismic at a 1,000 km2 area were
new commercial development areas, which star-
all the preparation and other necessary permits
expected.
ted being exploited and developed in 2008.
to start the acquisition.
North Bahariya Block
As a result of such activities, the production and
Sidi Abd El Rahman (SAER) Block
gathering information in an area of 1,000 km2.
This block is operated through the Norpetco jo-
proven oil reserves tripled as compared to the
This block, of 4,294 km2 is located offshore, West
int venture, among the consortium formed by
previous year.
of Alexandria. It was awarded to the consortium
formed by PTTEP (30%), Enap Sipetrol (30%) and
IPR, INA, Enap Sipetrol S.A. and the Egyptian
Governmental company EGPC. The background
On the other hand, during 2008 the studies to de-
operated by Edison (40%), at the 2006 biddings
fine new prospects continued, in order to define
round of EGAS.
INDEX
77
78
•
ANNUAL REPORT 2008
MIDDLE EAST AND NORTH OF AFRICA
E&P LINE INVESTMENTS IN 2008, IN MU$$
ENAP SIPETROL
Argentina
Área Magallanes
Pampa del Castillo
105.658
59.278
15.595
6.538
31.451
CAM-2A Sur
0
La Invernada
0
E2 ( ex CAM-1/CAM-3)
Buenos Aires (Assets Replacement)
5.397
296
Egypt
20.555
East Ras Qattara
15.635
North Bahariya
2.863
Block 2 Rommana
617
Block 8 Sidi Abd El Rahman
1.440
Irán
7.825
Mehr
7.825
Magallanes
42.708
Tertiary Exploration
2.316
Cullen BRC Gas Pipeline
395
Intracampos Cullen-Lynch
11.220
Pecket-Esperanza gas pipeline
9.145
Arenal Block Exploration
14.826
CEOP Caupolicán
Ecuador
18.000
Sudy Projects
12.864
MDC - PBH - Ampliación MDC
18.000
Gas Exploration at Valdivia Marine Basin
12.864
0
Carbon Methane Gas
4.806
Geothermal (Capital)
15.355
ENG (Chillan-Calabozo)
GDN (Apacheta-La Torta/El Tatio)
Energía Andina S.A.
TOTAL
0
9.390
5.965
176.585
The contractual commitment establishes the
its operator. This block is at an exploration stage,
In December, 2008, NIOC delivered a document
drilling of two wells during the first exploration
and one discovery was made.
containing remarks on the consortium development plan proposal that were not economically
stage, with a 3-year duration.
In 2005, Enap Sipetrol decided to divest its
viable for the companies participating, thus ori-
In 2008, the bidding process to retain the vessel
participation in this project, but the process
ginated the unanimous decision to abandon the
for the acquisition of the 3D seismic for 1,000
did not succeed because the only company
negotiation process, activating the agreement
km2, which was scheduled to start in January,
that made an offer had problems to finance
clause that entitles to the recovery of the expen-
2009. In addition, reprocessing works on the old
the purchase.
ses incurred during the exploration stage.
seismic in the area were carried out.
Meanwhile, on June 30th, 2007, the Governmen-
Nevertheless, the Company deemed it con-
IRAN
tal Iranian Oil Company (NIOC) declared the dis-
venient to make a provision for the activated
covery of Band E Karkeh as commercial, starting
value as of December 31st, 2008, amounting to
Mehr Block
up with the negotiation of a development plan
US$27.2 million.
Since 2001, Enap Sipetrol S.A. is the owner of a
for the area, with the corresponding develop-
33% participation at the Mehr Block, in associa-
ment agreement.
tion with Repsol YPF and OMV, being the latter
INDEX
•
ANNUAL REPORT 2008
79
80
•
ANNUAL REPORT 2008
Environment
and Social Responsibility
•
ANNUAL REPORT 2008
One of the main tasks of the Environment and Social Responsibility
Area is the management of the necessary environmental permits
to carry out activities according to the environmental standards
in force in the countries where ENAP’s E&P line operates.
T
hrough the Environment and Social Respon-
The business units shall continue making pro-
engineering, construction and operation stages;
sibility Area, ENAP’s E&P Line has focused
gress in the implementation of best practices in
the development of studies to obtain environ-
its efforts in improving the health, safety, en-
their management systems, with the intention of
mental resolutions by the authorities, the risks
vironment and community relationships at its
supplementing environmental aspects with tho-
analysis and special environmental technical
domestic and international operations. The pro-
se associated to health and safety management
specifications for construction agreements, as
grams encouraged during 2008 were oriented
at its operations.
well as monitoring and follow-up of the environmental commitments entered into, especia-
to complying with the sustainable development
strategy established in the 2007–2011 Strategic
Within this context, E&P Line is in the process
lly those associated to Cullen–BRC (Magallanes
Business Plan, that declares the strengthening of
of standardizing the criteria in the Management
Strait Second Crossing) gas pipeline and Pecket-
Environmental and Social Entrepreneurial Res-
of General and Occupational Preventive Health,
Esperanza gas pipeline.
ponsibility as one of the business strategic axes.
by means of a Health Guide that establishes the
At an operational level, the Business Units have
basic concepts that business units must consider
The above implied the submission of nine pro-
when preparing their annual programs.
jects to the Environmental Impact Assessment
System (SEIA), all of which were approved by the
made progresses in the implementation of the
strategy, which is supported by the Environmental
Internal audits carried out during 2008 show
environmental authorities. Also, the authorities
and Social Responsibility Policy of the E&P Line.
that the business units have made progress in
approved the environmental reports for the dri-
the implementation of the established guideli-
lling of 15 exploration wells of the different pro-
The most relevant aspects of this area during
nes, allowing the articulation of health programs
jects and the corresponding production facilities
2008 are as follows:
for the organization.
and the flow lines required.
Management Systems
In the particular case of Enap Sipetrol in Egypt, a
At the other business units, the environmental
In August 2008, Enap Sipetrol Ecuador obtained
Social Responsibility culture has been gradually
permits for the different investment projects
ISO 14.001:2004 certification from the Envi-
implemented, with an approach on the environa-
were successfully processed, thus ensuring the
ronmental Management System, which covers
mental and safety conditions at its El Cairo offi-
timely compliance with the plans established
the operations at Mauro Dávalos Cordero field,
ce, ensuring that the services companies operate
for 2008. Consequently, permits were obtained
Camp and Offices in Quito. The above has been
under the minimum standards of the industry.
for carrying out seismic programs in Egypt (East
Company to maintain an efficient operation, en-
Environmental Permits Processing
as for implementing 5 exploration wells at East
vironmentally responsible of its investments in
One of the main tasks of the Environment and
Ras Qattara.
East Amazonia.
Social Responsibility Area is the processing of
At Enap Sipetrol Argentina S.A., the operations
out the activities under standards in force at the
granted an environmental licence for the dri-
of Pampa del Castillo (Chubut Province) deposit
countries where ENAP’s E&P Line operates.
lling of Helix exploration well, located offshore
Ras Qattara concession and Rommana), as well
a consequence of the continuous effort by the
the environmental permits necessary to carry
On the other hand, Enap Sipetrol Argentina was
at the E2 Block.
received a re-certification of their Environmental
Management System for the second consecutive
In the particular case of ENAP Magallanes, the
year, which shows their capability to install and
company has participated in the encouragement
maintain an environmental responsibility culture
of several exploration, development and opera-
at its operations in the San Jorge basin.
tion projects during 2008, with support for the
INDEX
81
82
•
ANNUAL REPORT 2008
ENAP’s E&P Business Line has assumed the relationship with the
communities near their sites as a strategic pillar for carrying out
its activities. Pursuant to the above, the company encourages
programs aimed at strengthening its image of a socially responsible company.
Liabilities reorganization
ENAP’s E&P Business Line has assumed the re-
The latter was approved in July, 2008, and cu-
Since the end of 2005, ENAP is implementing the
lationship with the communities near their sites
rrently Geotérmica del Norte is being supported
environmental recovery project at septic tanks
as a strategic pillar for carrying out its activities.
for the processing aimed to the assembly and
containing residual hydrocarbons originated by
Pursuant to the above, the company encourages
start-up of the first geothermal well drilling.
the activities carried out during the first oil ex-
programs aimed at strengthening its image of a
ploitation decades in Magallanes.
socially responsible company.
On the basis of studies carried out by Universi-
In the particular case of the activities in Ecuador,
definition and implementation of environmental
dad de Magallanes and Fundación Chile, 1,010
Enap Sipec has reinforced its Relationships with
handling measures for exploration drilling.
septic tanks to be corrected we are identified.
the Community Program, with the purpose of
At the Pampa Apacheta Project (Second Region)
the support activities have been focused in the
As there is a lack of standards on this matter
contributing to the strengthening and sustaina-
At the Calabozo (Seventh Region) and Chillán
an agreement was reached to apply the hydro-
ble development of communities in the operati-
(Eighth Region) concessions, environmental pro-
carbon soil standards prepared by the Environ-
ve areas.
cedures are under process for carrying out a minor diameter preliminary sounding phase, aimed
ment Ministers Council of Canada, specifically
the Guide on Soil and Water Quality in force at
Renewable Energy: Geothermal Energy
at obtaining information allowing to more accu-
Alberta State, because of its environmental and
Through the Environment and Social Responsibili-
rately determine the deep drilling activities.
productive characteristics similar to those of
ty Area, the E&P Business Line provides technical
Magallanes.
support for the processing of permits, as well as for
Until the end of fiscal year 2008, 285 septic tanks
ENAP in Chile, in association with the Italian com-
had been intervened, which have the authorities’
pany, ENEL.
the studies on geothermal projects encouraged by
environmental approval, as well as the authorization by landowners.
For the deep exploration project of Quebrada del
Zoquete, at the Second Region, the processing
Relationships with the Communities
of an Environmental Impact Study was required.
INDEX
•
ANNUAL REPORT 2008
83
84
•
ANNUAL REPORT 2008
Enap Sipetrol S.A.
Board of Directors
1. Alejandro Pérez Rojas
4. Guillermo del Valle de la Cruz
Director
Director
Geologist
IRS Nº 7.379.488-9
IRS Nº 3.942.621-8
5. Sergio Galán Bidegaín
2. José Tomás Morel Lara
Director
Director
Commercial Engineer
Commercial Engineer
IRS Nº 6.825.236-9
IRS Nº 8.273.459-7
6. Marcelo Tokman Ramos
3. Rodrigo Azócar Hidalgo (1)
Director
Chairman
Commercial Engineer
IRS Nº 16.654.431-9
IRS Nº 6.444.699-1
7. Gastón Ramos González (2)
Director
Civil Chemical Engineer
IRS Nº 5.174.949-9
Notes:
1) Appointed at Board of Directors Session Nº236, dated January 29, 2009.
2) Appointed at Board of Directors Session Nº236, dated January 29, 2009, to replace Ms. Paula Hidalgo Mandujano. He accepted the appointment on
February 4, 2009.
INDEX
•
ANNUAL REPORT 2008
85
86
•
ANNUAL REPORT 2008
Management Summary
T
he operational management of the projects
At the same time, Enap Sipec delivered to Pe-
the rig was correctly positioned, and drilling be-
showed a positive result regarding the com-
troecuador a report on the implementation of
gan. As of December, a 1,497 meters depth was
pliance with the production program, with a
a secondary recovery project at Mauro Dávalos
achieved, drilling with a crown to recover eviden-
310,000 barrels increase in Argentina, due to the
Cordero (MDC) field. Petroecuador appointed
ces. The only delay experienced at this operation
restart of the activities in Área Magallanes, in
the unit of Campos Unificados for the technical
(3 days) is associated to strong wind storms that
March, 2008.
analysis and economic feasibility of the study,
create difficulties for some actions on the rig.
with the purpose of negotiating the extension
In August 2007, the company started with the
of the specific services agreement at MDC with
In December, the Board of Directors approved
sales process of its participation (50%) of North
Enap Sipec.
the renewal for 180 days of the banking loan with
During 2008, in Argentina, the Company was
maturity in January, 2009.
BBVA bank, in an amount of US$45 million, with
Bahariya asset, in Egypt. The final transfer of the
property was expected for 2009.
waiting for an improvement in the conditions for
In Ecuador, the members of the negotiating com-
the oil industry development in Argentina, befo-
Results
mission for the specific services agreement were
re renewing the sales process of the Campamen-
Enap Sipetrol S.A. results translated into an Ebit-
defined with Petroecuador. At the end of fiscal
to Central Cañadón Perdido Station.
da of US$162 million in 2008, which is equivalent
to a 74.2% increase, as compared to fiscal year
year, four working meetings had been held to
analyze the by-laws of the combined economy
For the E2 project in the Southern Basin of Ar-
2007. The company’s final result amounted to an
company, Petroenap. New meetings were pro-
gentina, all supplementary service agreements
income, after tax, of US$12.6 million, an increase
grammed to agree on the incorporation terms of
were entered into for the operation start-up of
of 40.4% as compared to 2007.
Petroenap at 40 Block, and on operation services
the jack-up type rig, Ocean Scepter. On Decem-
rendering by Enap Sipetrol in Ecuador.
ber 12, YPF delivered this rig, initiating the trans-
The operational result as of December, 2008,
fer from Caleta Paula to Hélix (800 km). Then,
shows a 44.2% increase as compared to Dec-
•
ANNUAL REPORT 2008
owned by Enap Sipetrol Argentina subsidiary.
assets, due to assets reclassifications for the sale
costs of sales increased by 52.9% (US$108.3 mi-
Financing
project, in Argentina. The short-term liabilities
ember, 2007, from US$30.6 million in 2007, to
of the Campamento Central Cañadón Perdido
US$44.1 million in 2008. On the other hand, the
llion), from US$204.9 million in 2007 to US$313.2
Current liabilities show a US$18.6 million in-
were affected by a sundry creditors increase, by
million in 2008. This was offset by a higher in-
crease, equivalent to 12.2% as compared to the
US$14.1 million, corresponding to liabilities with
come from sales, positively affecting the sales
previous year, while the long term liabilities de-
the consortia in Egypt, as well as to the income
margin, which increased by 26.3% as compared
creased by US$16.7 million, due to a decrease
tax, which increased by US$5.7 million, due to a
to 2007.
in payable documents and accounts to related
higher tax expense of Enap Sipec Ecuador.
companies.
Indebtedness
The non operational result experienced a negative variation from US$6.1 million. Such decrease
Equity
The decrease in the indebtedness index to 1.27 du-
is mainly explained by the divestiture of El Diyur
Equity showed a US$12.2 million increase, amoun-
ring fiscal year 2008, as compared to 1.33 during
Block in Egypt during the 2007 term.
ting to US$281 million, mainly originated by a ca-
fiscal year 2007, was mainly due to a company’s
pital increase, and the results of fiscal year 2008.
capital increase, with the capitalization of 100%
Assets
In 2007 equity amounted to US$268.8 million.
the accrued profits as of March 2008, and to shares issuance.
The Company’s current assets amounted to
US$219.9 million in 2008, as compared to US$170.4
Cash Flow
million during the previous fiscal year. In general
As a result of a US$49.0 million working capital,
On the other hand, during fiscal year 2008 agree-
terms, fixed assets decreased by US$34.7 million,
the cash flow index, which at the end of the pre-
ments were entered into with BBVA Banco Fran-
which is equivalent to 7.9% as compared to 2007,
vious fiscal year was 1.12 times, increased in 2008
cés and ABN Amro Bank NV, for US$45 million
mainly due to the assets reclassification for the
to 1.29 times, mainly due to the increase in deb-
and US$20 million, respectively.
sale of Campamento Central Cañadón Perdido,
tors for sales, and to an increase in other current
INDEX
87
R&L Business Line
>>Results Summary
>>Refining and Logistics in Magallanes
>>Human Resources Management
>>Environamental Management
>>RSE Management
>>Quality management
>>R&L Abroad
>>Enap in the World
>>Enap Products
Pág. 90
Pág. 96
Pág. 100
Pág. 102
Pág. 104
Pág. 106
Pág. 106
Pág. 107
Pág. 108
Pág. 109
ENAP
90
•
ANNUAL REPORT 2008
Results Summary
2
008 was one of the most complex fiscal
of high international oil prices, thus accruing high
Total refining, including supplementary loads,
years that ENAP’s Refining and Logistics
inventory levels at a high cost to supply the requi-
amounted to 13.7 million m3, where the heaviest
Business Line had to face, due to the highly vo-
rements of the domestic power generaton demand.
crude (with the highest density, and generally lower
latility international prices scenario, and to the
Furthermore, this fact implied extraordinary increa-
price in the market) amounted to 4.7 million m3, an
high requirements of products for thermal power
ses, both in the logistic as well as in the financial
amount 400,000 m3 higher than in 2007. According
generation required by the domestic market.
costs, which negatively affected the year’s results.
to the light crude substitution strategy, between
2007 and 2008 intermediate and heavy crudes in-
Due to the nature of the refining business, results
In 2008, the R&L business line maintained the refi-
creased raised their participation in the refining
are subject to the variations in the refining margins,
ning volumes of 2007, but with higher levels of use
basket, from 54% to 58% respectively, while light
and to the trend in the international prices of crude
and operational availability of units, thus allowing
crude decreased its importance from 33% to only
oil and products, a situation that became apparent
for a more valuable basket of products from refi-
28% of the total refined.
during fiscal year 2008, when the extreme values
ning, with a higher participation of heavier crude.
were noticed.
The year started with a WTI crude marker price of
It is worth mentioning the start-up of the Coker
Crude
Plant at the Aconcagua refinery, a unit that signifi-
Light
Intermediate
Heavy
Supplementary loads
Total
US$99.6 per barrel, reaching its maximum historic of
cantly contributes to improve the refining margin,
US$145.3 per barrel in July, to then show a sharp de-
since it decreases fuel oil production, encouraging
cline to US$44.6 per barrel, at the end of December,
that of diesel and gasolines, which are products
causing negative effects on the sales margin of this
with a higher value in the market. Also, it allows the
Business Line.
refining of heavier crude with a lower relative pri-
On the other hand, the consumption of refined pro-
Total R&L
Mm3
3.842
3.372
4.653
1.877
13.744
%
28
25
33
14
100
ce in the market, and a greater availability in South
Gasoline and other products production amoun-
America, thus implying a lower transportation cost.
ted to 13.1 million m3, mostly corresponding to
ducts in the domestic market reached 19.9 million
(m3),
2008 ENAP REFINING PER TYPE OF CRUDE
diesel oil and gasoline, with 33% and 26% of the
4.3% higher than the total con-
Notwithstanding the efforts and achievements of
sumption of 2007. Such increase is mainly explained
the year, Enap Refinerías S.A.’s operational result
by the strong increase in diesel consumption during
showed a US$944 million loss, which added to the
The Coker Plant operation start-up, in July 2008,
the first semester, due to the lack of rain which in-
US$282.5 negative non operational result meant a
contributed to the production capacity, allowing to
cubic meters
basket respectively.
creased demand of thermal power generation, in a
US$1,096.2 million loss (after an Income Tax credit),
decrease Fuel Oil production, for the benefit of a
scenario of nil supply of natural gas from Argentina
as compared to US$20.8 million income recorded
diesel production increase, which raised its annual
for the combined cycle stations.
the previous fiscal year.
production by 600,000 m3 as compared to 2007,
with fuel oil representing only 16% of the products
Consequently, as a result of the energy crisis ex-
In 2008, ENAP's refineries (Aconcagua, Bío Bío and
basket. Considering the Aconcagua and Bío Bío re-
perienced during the first half of the year, ENAP
Gregorio) processed a total 11.9 million m3 crude,
fineries, the usage rate of both was 87.1% and ope-
was forced to make an additional effort to produce
coming mainly from South America and Africa. This
rational availability was 95.8%, indicators that are
and import larger diesel amounts, during a period
figure is similar to that of fiscal year 2007.
higher than those of 2007.
•
ANNUAL REPORT 2008
2008 was one of the most complex fiscal years that ENAP’s Refining and Logistics
Business Line had to face, due to the high volatility of international prices scenario, and to the high requirements of products for thermal power generation required
by the domestic market.
2008 PRODUCTION AT ENAP'S REFINERIES
Total R&L
Thm3
1.220
3.448
727
4.380
Fuels
Kerosene
Diesel
2008 PRODUCTION AT ENAP'S REFINERIES
%
9
26
6
33
Fuel Oil
Industrial prods. and other
Total
Volumetric Yield
Total R&L
Thm3
2.028
1.325
13.127
95,5%
%
16
10
100
ORIGIN OF REFINED CRUDE R&L BUSINESS LINE
AFRICA
22%
ASIA
9%
DOMESTIC
1%
SOUTH AMERICA
68%
INDEX
91
92
•
ANNUAL REPORT 2008
Síntesis de resultados
2008 ENAP MARKET SHARE
Figures in Thm3
Domestic Sales
Domestic Consumption
Market Share
Imports
Exports
1.167
2.114
55,2%
429
91
Vehicles gasoline
3.143
3.240
97,0%
640
840
Kerosene
1091
1.072
100%
479
15
Diesel
6.696
10.136
66,1%
3.057
595
Fuel Oil
2.599
2.779
93,5%
606
0
Industrial Products and other (*)
Total
600
600
100%
0
119
15.296
19.941
76,7%
5.212
1.661
•Includes propylene, ethylene, nafta, solvents and asphalt, among other.
Investments
Sales
ket share by ENAP; it was followed by vehicles
Total sales, both in the domestic and internatio-
gasoline, with 3,1 million m3 (54,000 barrels/day)
During 2008, the R&L Business Line made inves-
nal markets, amounted to 17 million m3 (291,400
sales, and a 97.0% market share.
tments for US$194.5 million, corresponding to
the following breakdown:
barrels/day), a little higher than in 2007. Such
sales are composed mainly by liquid fuels and li-
The following volumes correspond to fuel oil,
quefied petroleum gas, as well as lower amounts
with sales of 2.6 million m3 (44,700 barrels/day)
of olephins and other industrial products. The
and a 93.5% market share, and to liquefied pe-
products mostly sold, gasoline and diesel, corres-
troleum gas, with 1.2 million m3 (20,100 barrels/
ponded to those of a higher value, which had a
day) and a 55.2% market share. The remaining
share of 23% and 43% respectively in the total
sales correspond to products where ENAP tradi-
sales basket.
tionally has a market share very close to 100%,
among them kerosene, industrial products and
olephins.
Domestic Market
Sales in the domestic market amounted to 15.3
2008 ENAP R&L BUSINESS LINE INVESTMENTS
Subsidiary
ENAP Refinerías S.A.
MMUS$
145,5
> Aconcagua Refinery
62,5
> Bío Bío Refinery
81,2
> Storage and Oil Pipelines Department
R&L Magallanes
Capital contributions and Other
Total
1,8
2,2
46,8
194,5
It is worth mentioning that of the total sales, 11.7
These investments were mostly oriented to impro-
(262,900 barrels/day), a market share
million m3 (201,900 barrels/day) corresponded to
ving products quality, to increasing production ca-
in the country of 76.7%, 2.2 points lower than in
own production, which represents 69% of the to-
pacity, to adapting the facilities to environmental
the previous year. The drop in market share is a
tal sold. The remaining 31% was supplied with im-
and safety standards, and to increasing our facili-
result of a strong increase in diesel demand, as a
ports, which amounted to 5.2 million m3 (89,600
ties, reliability.
result of the lower hydroelectric generation, cau-
barrels/day), where the main product was diesel,
sed by a lack of rain during the first semester.
with 3.1 million m3 (52,500 barrels/day), equiva-
million
m3
lent to a 59% this volume.
The product mostly sold was diesel oil, with 6.7
million m3 (115,100 barrels/day), and a 66.1% mar-
•
ANNUAL REPORT 2008
Projects Carried out with Own Resources
Projects finalized in 2008
»»Fuel On-Line Preparation, allowing a more effi-
The Aconcagua Refinery completed the following
cient preparation of this product, reducing the
projects in 2008:
preparation times and the tanks needs.
The following projects continued under development at the Bío Bío Refinery:
»»In addition, diesel mixing automatic control
»»Adaptation of the refinery for heavy crude.
installation projects were completed; use of
During the year the development of the EP
which will allow to improve heat recovery at
oil pipeline Nº 2 for white products; environ-
contract continued, and the purchase of equi-
the Catalytic Cracking Unit (FCC).
mental improvements and assets replacement,
»»New Heat Exchanger Recovery at the FCC unit,
»»Also, relevant projects were completed, such
pment and material was started-up.
»»Diesel and gasoline storage tanks. The pro-
among other.
ject was in its final stage and its began is sche-
as Increase at the Quintero Power System Reliability, Improvement of Oil Pipelines Safety,
Projects in Progress
Assets Replacement and other.
The most relevant projects that were in pro-
»»San Vicente Maritime Terminal. This project
gress in 2008 at the Aconcagua refinery are as
is under development within the framework of
follows:
the Coastal Rim Ordering Plan at San Vicente
In the meantime, at the Bío Bío refinery the startup of the following projects is highlighted:
»»Naphtha Desulfurizing Unit at FCC, which purpose is to provide the refinery with a gasoline
duled for the beginning of 2009.
Bay. During 2008 the most relevant agreements
»»Alkylation New Unit. During the year, this
were awarded and the construction was began.
project was physically started-up by Empresa
The start-up is scheduled for the end of 2009.
Técnicas Reunidas, which shall be developed
»»Refining capacity enhancement analysis. The
according to an “Open Book” mode.
study to determine the technical and economic
and naphtha hydrotreatment system from Ca-
»»Adaptation to Standards and Improvement
talytic Cracking Unit, to reduce the sulfur con-
of the Fire Fighting System. In 2008, a partial
UOP company. The study will be completed
tent in fuels.
replacement continued, as well as a relevant
during 2009.
»»Facilities standardization, according to engineering standards. This project was aimed at
improvement of deteriorated, or out of stan-
pre-feasibility of the project was awarded to
»»Diesel severe hydrotreatment. The recommendation for the development of its basic
dard facilities.
modifying facilities the which due to their age,
»»New Boiler at the Supplies Area. This project
engineering was obtained from the National
did not comply with the current engineering
is in its final phase, and its start-up is scheduled
Energy Commission, and the studies for tech-
for the first quarter of 2009.
nologies selection were developed. It was con-
standards.
»»Interconnection of Bío Bío refining plant with
»»Increase of low sulfur diesel production ca-
Abastible's new maritime terminal at the San
pacity. During the year the construction phase
Vicente bay, which allows the refinery to use
continued, as scheduled.
the facilities of such Terminal to receive and
»»Severe Hydrocracking Unit Construction.
dispatch white products (gasoline, diesel and
The basic engineering was completed, a work
kerosene), and liquefied gas by sea.
done by Chevron Lummus Global.
INDEX
cluded that the most adequate is a combination
of a series desulfurizing and dearomatization.
93
94
•
ANNUAL REPORT 2008
RESULTS SUMMARY
Projects INICIATES in 2008
Projects in association
As in 2007, Peru continues being the second des-
with third parties
tination of ENAP exports, with 425,000 m3, equi-
»»Within the set of new projects initiated in
valent to 26% of them. The main exported pro-
2008, at the Aconcagua refinery, the following
»»As explained before, in 2008 the Coker Com-
are worth mentioning: enhancement of diesel
plex was completed and started-up at the Acon-
storage capacity at Quintero; improvement of
cagua refinery. This project required a US$430
the high tension power distribution network at
million investment, through Energía Concón
174,000 m3 were exported to Argentina, between
Quintero Terminal; transfer of the control room
S.A. (Enercón) company, in which ENAP and
gasolines and diesel, of which 71,000 m3 were
ducts to this destination were gasolines (24%)
and diesel (76%).
from the Storage Area to a new one; land pre-
Enap Refinerías S.A., Ferrostaal, Foster Wheeler
sent to the South of Argentina by The Magalla-
paration for new facilities, and analysis of im-
and Técnicas Reunidas have a participation. This
nes R&L Division.
provements to the oil pipelines safety systems.
Complex allows the Aconcagua refinery to re-
»»A series of new projects were initiated at the
duce its production costs, increasing the use of
In Ecuador, ENAP sold in 2008 a total 91,000 m3
Bío Bío refinery during 2008, among which
regional crude available in Latin America. Also,
liquefied gas.
are: improvement of the electric substation;
it will allow for the adapting to future demand
construction of a spill contention system with
requirements, which will result into a greater
Gasoline continued being ENAP’s main export
butane sphere; enhancement of sulfur reco-
fuel and diesel consumption, and a lower con-
product, with 61% of the total volume exported.
very capacity; put in service of a new methanol
sumption of heavy fuel oil.
Diesel and liquefied petroleum gas were in the
removal system in propylene for Petroquim
plant; put in service of the use of fuel oil at
second and third places, with 32% and 6%, resExports
pectively. The remaining 1% of he exported volu-
furnaces and boilers; improvement of the fire
fighting system of equipment that operates
me corresponded to kerosene.
ENAP exports in 2008 amounted to 1.6 million
with self-inflammable liquids; and installation
cubic meters of oil refined products, which is
It is worth mentioning that Enap Refinerías S.A.
of a kerosene marker injection system.
equivalent to 12.7% the total production of its
has its subsidiary Manu to carry out the fuels im-
refineries. Central America was the main desti-
port operations in Peru. It also carries out retail
nation of ENAP's exports in 2008, with 51%, and
activities in that country, through the associate
final fuels were the main exported product.
Primax S.A.; and also in Ecuador, by means of its
participation at Primax Holding associate.
2008 ENAP FUELS EXPORTS
Figures in Mm3
Argentina
Perú
Central America
EE.UU.
Other (*)
Total
50
91
6%
104
785
41
14
994
61%
15
1%
321
47
43
521
32%
0
0%
1.621
100%
Gasolines
Kerosenes
Diesel
TOTALES
*Includes Brazil, Colombia and European Union
Ecuador
91
15
110
175
425
91
832
41
57
%
•
ANNUAL REPORT 2008
ENAP's exports in 2008 amounted to 1.6 million cubic meters
of oil refined products, which is equivalent to 12.7% the total
production of its refineries.
INDEX
95
96
•
ANNUAL REPORT 2008
Refining and Logistics
in Magallanes
R&L MAGALLANES SALES, 2003-2008 (Mm3)
300
200
100
Fuels
Diesel
Kerosene
0
2003
I
2004
2005
2006
2007
2008
n 2008 the R&L Business Line in Magallanes delivered gasoline, kerosene and diesel for their
marketing in the XII Region, in the central zone of
Chile and in the South of Argentina markets, for a
volume of 285,000 m3, being the regional demand
supplied 100% with ENAP production.
GLP - CABO NEGRO FRACTIONING (Mm3)
1200
Cabo Negro Plant
Fractioned raw material at Cabo Negro Plant,
800
originated by domestic supply and the four
import agreements in force with producers of
the Southern Basin, in Argentina, recorded a
1% decrease as compared to the prior term. At
this Plant, the total production (propane, buta-
400
ne and natural gasoline) amounted to 844,000
m3. LPG shipments from Cabo Negro during the
year amounted to 793,000 m3, which were devoted both to the country’s central zone supply
C4 Southern Sea Basin
Imported Raw Material
Domestic Raw Material
0
(688,000 m3), as well as to butane deliveries by
Cuenca Marina Austral Consortium (re-export of
105,000 m3).
2003
2004
2005
2006
2007
2008
•
ANNUAL REPORT 2008
TOTAL CRUDE PROCESSED AT THE
GREGORIO REFINING PLANT 2008
616.000
Mm³
Gregorio RefinERY
At the Gregorio Refinery, the composition of the
Training
processed crude basket was formed by crude
The main focus of the activities and design of the
from Argentina and from Angola, basically recei-
2008 Staff training plan was based on the cove-
ved by maritime transportation. Refining amoun-
rage of the functional competences gaps iden-
ted to 616,000 m3, which is 10% higher than the
tified, together with the subjects related to the
previous year’s refining.
business complexity, specifically the technical
learning needs at each department of the Maga-
In September, a programmed maintenance inte-
llanes Refining and Logistics Business Line.
rruption took place at Gregorio Refinery, in order
to make amendments allowing the processing of
Consequently, priority was given to the training
a heavier crude basket. In the first place, the as-
activities related to productive operation and
sessments of this procedure show improvements
quality management, oriented to employees’
in the fuel gas savings, as a consequence of the
development and to a contribution to the pro-
improvement in the heat exchange and furnace
ductive chain.
ORIGIN OF CRUDE PROCESSED
AT THE GREGORIO REFINING
PLANT IN 2008
ARGENTINA
ANGOLA
35%
38%
operation, as well as of an increase in the recovery of intermediate products (diesel and kero-
The training rate in 2008, measured by training
sene), depending on the products specifications
hours over contracted hours, amounted to 5.1%.
and the quality of the crude fed.
DOMESTIC
23%
Projects at R&L Magallanes
Quality Management
R&L Magallanes is ISO 9001: 2000 certified since
In 2008, R&L Magallanes developed 11 Investment
November, 2006, and in this context, the com-
projects amounting to US$2.2 million. Among
pany requested Bureau Veritas Certification to
them, the conclusion of the adaptation project
carry out the fourth surveillance audit to the Qua-
of the Gregorio refinery to a new heavy crude
lity Management System, an activity that ended
basket; and the construction start-up of the Ri-
successfully, giving rise only to comments and
les Unloading Standardization Project, aimed at
improvement opportunities allowing to continue
ensuring in any event the environmentally safe
working towards continuous improvement.
unloading of the refining plant's effluents.
INDEX
AZERBAIYAN
4%
97
98
•
ANNUAL REPORT 2008
BOARD OF DIRECTORS
1. Christian Kúsulas Cervelló
5. Berta Belmar Ruiz
Director
Directora
Economist
Attorney
IRS Nº 6.584.476-1
IRS Nº 5.328.023-4
2. Pedro Neira Asenjo
6. Guillermo del Valle de la Cruz
Director
Director
Attorney
IRS Nº 7.379.488-9
IRS Nº 14.272.701-3
7. Sergio Galán Bidegaín
3. Gabriel Aldoney Vargas
Director
Director
Commercial Engineer
Mechanic Engineer
IRS Nº 6.825.236-9
IRS Nº 5.596.718-0
8. Marcos Varas Alvarado
4. Rodrigo Azócar Hidalgo
(1)
Director
Chairmain
Technical Operator
IRS Nº 10.409.044-3
IRS Nº. 6.444.699-1
Notes:
1) During Ordinary Meeting N°477, dated December 30th, 2008, the Board of Directors agreed to accept, as from such date, the resignation handed by
Mr. Enrique Dávila Alveal to his position as Director and Chairman of the Company’s Board, appointing Mr. Rodrigo Azócar Hidalgo to replace him in both
positions during Ordinary Meeting Nº478, dated January 28, 2009.
2) During Ordinary Meeting Nº478, dated January 28, 2009 the Board of Directors agreed to appoint Mr. Carlos Cabeza Faúndez as CEO of Enap Refinerías
S.A., to replace Mr. Sergio Arévalo Espinoza. At the same Meeting, the Board agreed to accept the resignation handed by Ms. Paula Hidalgo Mandujano to
her position as Company’s Director, and the appointment of her replacement to be made at the next Ordinary Shareholders Meeting.
INDEX
•
ANNUAL REPORT 2008
99
10 0
•
ANNUAL REPORT 2008
Management Summary
•
ANNUAL REPORT 2008
Regarding investments, the highlights are the start-up of the Coker
Plant in Aconcagua, and the progress in the projects pertinent to
the company’s future, such as the new Alkylation Plant and the Topping 3 Unit in Aconcagua.
T
he results obtained in 2008 by Enap Refine-
Results
withholding, in case of cash flow balance and indebtedness with the parent, ENAP.
rías S.A. reflect the complex market scenario
faced by the Company, characterized by a cycle
Enap Refinerías S.A.'s results in 2008 showed
of high crude and products prices, as well as by
a US$1,096.2 million loss, much lower than the
It is the parent’s policy to finance the subsidiaries
an unusual diesel demand during the first semes-
US$20.8 million income recorded the previous
cash-flow deficits originated by operations and/or
ter. Such situation changed dramatically during
year. The above is explained by a negative opera-
investment plans implementation. Enap Refinerías
the second semester, with a sharp drop in prices
tional result of US$944 million, and by a negative
indebtedness with the parent ENAP is indexed at a
that took refining margins to negative levels.
non operational result of US$282.5 million. Due
floating interest rate, including all financing costs,
to the low prices of year-end, the adjustment of
obtained by ENAP in the domestic or internatio-
The product-crude unit margin, understood as
the crude and products stocks to their correspon-
nal financial markets based on Libo rate.
the sales price less the crude oil cost incorpora-
ding realization values meant the acknowledge-
ted to the products sold, amounted to close to
ment of a US$180.7 million loss.
Enap Refinerías S.A. does not have any indebted-
total sales, including exports, amounted to 16.9
In the operational area, the refining volume, in-
banks.
million m3, 200,000 m3 higher than 2007 sales.
cluding crude and supplementary loads amoun-
Nevertheless, the own production volume inclu-
ted to 12.3 million m3, slightly higher than 2007.
ness in the capital markets or with commercial
50% the expected margin during the year. The
m3,
The Storage and Oil Pipelines Department
ded in such sales showed a decrease as compared
Production amounted to 11.7 million
being
(DAO), in charge of Enap Refinerías logistics,
to the previous term, being replaced by imports,
the main products diesel and gasolines, with 36%
made investments for US$1.8 million in projects
that represented 31% the volume sold.
and 29% of the basket respectively.
aimed to the optimization and improvement of
its facilities safety and to the adaptation to envi-
The non crude operation costs increased by 25%
The usage rate of the refineries was 87.1%, and
as compared to 2007, being the main increases
plants availability was 95.8% (average of Aconca-
transportation and energy, in the first case, de-
gua and Bío Bío refineries).
rived from larger logistics activities for products
ronmental regulations.
With a US$0.3 million disbursement, the DAO
completed the Fire Fighting System Standardiza-
import (mainly diesel), and in the second, as a
In 2008, the total sales volume to the domestic
result of the higher cost of electric energy and
market was 15.1 million m3, with represents a mar-
tion Project at San Fernando Plant.
of own production fuels used in the refineries
ket share of 75.8%. On the other hand, exports
Old projects, as well as new ones initiated in 2008
operation.
amounted to 1.6 million m3, which represent 9.5%
are under development, among them: replace-
of the total products sold by Enap Refinerías.
In 2008, operational indicators such as operational availability and units usage rate showed an
ment of pipelines of the Fire Fighting System at
the Linares Plant; replacement of fire fighting
Investments Financing
increase as compared to 2007, and no significant
pumps at the Maipú and San Fernando Plants;
replacement of liquefied petroleum gas storage
operational incidents affecting productive activi-
Investments disbursement in 2008 by Enap Re-
capacity at the Linares Plant; and construction of
ties were recorded.
finerías amounted to US$145.5 million. Including
a domestic kerosene tank at the Maipú Plant.
the capital contributions for projects develoRegarding investments, it is worth mentio-
ped with third parties, this figure increases to
ning the Coker Plant start-up in Aconcagua, as
US$192.3 million.
well as the progress in projects relevant for the
company’s future, such as the new Alkylation
The financing sources for the projects were
Plant in Aconcagua, and the adaptation of the
mainly originated by the depreciation and write-
Bío Bío refinery, for the refining of heavy crude.
offs item, as well as by income capitalization or
INDEX
101
1 02
•
ANNUAL REPORT 2008
Human Resources
Management
I
n 2008, Human Resources Management at
of the Management System per Competences,
unions associated to FENATRAPECH and FESE-
Enap Refinerías S.A. was oriented to the com-
stressing the Performance Management System,
NAP and the Company.
pliance with the established purposes, making
Career Development and Successors Plans.
Staff Management
progresses in different strategic initiatives.
Training
Important progress was noticed in the articula-
With the purpose of focusing this task in the
main processes of the business, the necessary
tion of tools for continuous improvement, and
In 2008 training was oriented to the refining bu-
the employees quality of life. Among them, the
siness, process optimization and development
ness unit was determined in 2008, and solutions
definition of labor competences per process and
of Empoyees’ technical competences in their co-
were defined to adjust payroll to the necessary
the preparation of learning plans to close gaps
rresponding working areas.
positions, either through relocation, reconver-
in critical competences detected, as well as the
staff for the supporting processes at each busi-
sion, in-advance hiring or retirement.
management of its own staff, and policies streng-
At Enap Refinerías, critical technical competence
thening the labor management of contractors.
gaps were detected for operational areas emplo-
Management at Contractors
yees, which were the basis to build the Annual
Competences
Learning Plans, with training actions aimed at
Enap Refinerías S.A., has based its relationship
closing the gaps detected.
with collaborators on the protocol entered into
licies, in 2008 the Company worked in the im-
The Training Rate in 2008, measured as the Trai-
contractors labor management”.
plementation of the Human Resources Manage-
ning Hours over the Hours Hired was 5.7%.
with ENAP Federations called “ENAP faced to
Within the framework of human resources po-
ment System per Competence. Particularly, the
sub-system Learning Management was put in
In 2008, the Development Program for Suppliers
Collective Bargain
place, carrying out programs to reduce the com-
was put in place at the Bío Bío and Aconcagua
refineries, for the benefit of 35 companies that
petence gaps detected at the 360° assessments
Three collective bargaining processes were ca-
render external services. It is carried out toge-
carried out at the operational areas.
rried out during fiscal year 2008 at the Acon-
ther with the Bío Bío Manufacture and Services
cagua refinery, with the Employees Union,
Exporters Association (Asexma Bío Bío), and the
Also, progress was made in the definition of
Professionals Union and Emalco Employees
Valparaíso Industrials Association (Asiva), with
Corfo’s financing.
competences in the support areas, such as Plants
Union; and one at the Bío Bío refinery, with
Engineering, Quality Control, Planning and
ENAP–Petrox S.A. Employees Union. All such
Management, Environment and Quality, Staff,
processes were carried out in a harmony en-
The purpose of such program is for suppliers to in-
Comptroller and Finance, Risks Prevention, Con-
vironment, which permitted reaching satis-
crease their contribution to Enap Refinerías, value
tracts Management, Procurement and Enginee-
factory agreements for the parties, within the
chain, by supplying excellence services and pro-
ring and Construction Departments.
time frame established by law.
ducts, and by being committed to all RSE aspects.
Work is under progress, based on the informa-
Also, progress was made in the compliance with
tion collected, to implement other Subsystems
the different protocols established among the
•
ANNUAL REPORT 2008
In 2008 training was oriented to the refining business, resources
optimization and development of Employees’ technical competences in their corresponding working areas.
TRAINING RATES AT ENAP REFINERÍAS IN 2008
ACONCAGUA
REFINING PLANT
BÍO BÍO
REFINING PLANT
TOTAL
5,8%
5,7%
5,7%
ACONCAGUA
REFINING PLANT
BÍO BÍO
REFINING PLANT
TOTAL
Nº EXECUTIVE OFFICERS
Nº PROFESSIONALS
Nº PROFESSIONALS
Nº PROFESSIONALS
Nº TECHNICIANS DIFFERENT
SPECIALIZATIONS
SPECIALIZATIONS
SPECIALIZATIONS
TOTAL
TOTAL
TOTAL
(Includes DAO)
ENAP REFINERÍAS STAFF IN 2008
(Includes DAO)
34
178
687
899
29
214
518
761
INDEX
63
392
1.205
1.660
1 03
104
•
ANNUAL REPORT 2008
Environmental Management
•
ANNUAL REPORT 2008
The Aconcagua and Bío Bío refineries continued working in
the adaptation of their Environmental Management Systems
to the ISO 14001 : 2004 the Standard.
I
n 2008 the Aconcagua and Bío Bío refine-
ment was carried out at the Aconcagua refi-
the company continued with its training and ad-
ries continued working in the adaptation of
nery, in order to improve the noise map. At this
vising program, for staff and collaborators.
their Environmental Management Systems to
stage, it is intended to identify the most signi-
ISO 14001 : 2004 the Standard. As part of the
ficant noise emission sources, aiming to reduce
The Bío Bío refinery, in turn, continued com-
environmental performance assessment of both
the environmental noise in Concón.
plying with the environmental commitments
»»The measurement program of iso cinetic and
undertaken with regional and local authorities.
development regarding atmospheric emissions,
gas from the issuing sources (chimneys) of the
Also, it maintained a permanent dialogue with
solid and liquid waste, odors and noise.
refinery was continued, according to the sti-
the community, and a coordination with the
pulations of the Coker Complex standard. This
region’s industrial companies to approach envi-
way, 50% of the issuing sources at the Aconca-
ronmental issues.
refineries, operational controls continued under
At the Aconcagua refinery plant, this process
continued under development in a gradual manner, integrated to Standard ISO 9001: 2000.
gua refinery were covered.
»»The air quality monitoring program at the
Also, the company continued with its permanent
In this area, the following activities were ca-
Concón district, including noise, and of the
concern regarding the environmental impact de-
rried out:
refinerie's liquid effluents emissions was con-
rived from the refinery’s operation, investing in
tinued.
projects that mitigate the environmental impact
»»Implementation of measures defined in the
»»Regarding the handling of liquids and solids, a
of some processes, such as noise mitigation, de-
handling of hazardous and non hazardous was-
controlled disposal of them in sanitary and envi-
crease emissions in particle material, decrease of
te plan undertaken with the authorities. This
ronmentally authorized sites was maintained.
atmospheric emissions to the Bío Bío river, and
plan has been authorized by the Health Ministry Regional Secretary of Valparaíso.
it has developed an environmental monitoring
Together with the above, the Aconcagua refi-
project that carries out on line measurements of
»»Incorporation of the solvents and raw material
nery continued maintaining the “Annex on En-
environmental parameters in several locations,
used by Refinería Aconcagua in its processes or
vironmental Management for Contractors” as a
both inside and outside the refinery, to guaran-
in its products, to the record of substances con-
theprocedure requirement and later assessment
tee that emissions permanently comply with the
trolled by Corporación Nacional de Control de
of its agreements, which requires that collabora-
regulations.
Estupefacientes (Conace).
tors comply with environmental criteria, in line
»»During the second semester of 2008, the se-
with its Environmental Management System
cond stage of sound pressure levels measure-
under ISO 14001 : 2004 model. In this context,
INDEX
105
10 6
•
ANNUAL REPORT 2008
RSE Management
R
egarding Social Entrepreneurial Respon-
since 1995.
sibility (RSE) in Enap Refinerías, in 2008
Influence on the community
activities with the community were carried out
Enap Refinerías applies a good neighbours policy
through the Environmental Three-Party Table es-
in coordination with different community parti-
tablished both by the refineries Aconcagua and
cipants, with the purpose of maintaining a har-
Bío Bío.
monious relationship with the environment and
citizens that live close to its industrial facilities.
Neighbours’ leaders of Concón and Hualpén,
To this aim, the Company maintains the Three-
representatives of both districts municipalities,
Party Tables institution, where it works together
and the Company’s executive officers participate
with neighbours leaders and representatives of
at The Three-Party Tables. They meet on a mon-
the community governments for the solution of
thly basis to approach environmental initiatives,
environmental and social issues.
with the intention of improving quality of life and
good neighbours spirit among its members.
Enap Refinerías yearly summons high school
students to perform internships, at a technical,
The Bío Bío refinery plant was awarded the
professional and dual level.
“Regional Environmental Award 2008”, for its
participation in the Bío Bío River System Water
Quality Monitoring Program, a task it performs
Quality management
All productive units at Enap Refinerías, that is,
With the purpose of getting to know the satis-
the Aconcagua and Bío Bío refineries and Stora-
faction level of its clients, the R&L Business Line,
ge and the Oil Pipelines Department, maintained
together with ENAP’s Commercial Management,
during the year their ISO 9001: 2000 certifica-
carry out surveys on client satisfaction on a
tions, with the approval of follow-up and recer-
yearly basis. In 2008 32 clients answered the sur-
tification audits, carried out by Bureau Veritas
vey and the result was 4.3 on a scale from 1 to 5,
Certification. Such Units certified their quality
where 4 is good and 5 very good.
management systems on years 1998, 2001 and
2003, respectively.
•
ANNUAL REPORT 2008
R&L Abroad
E
nap Refinerías S.A. has a subsidiary called
sales prices during the second semester, and hig-
ket share, showed in 2008 a net result of US$1.5
MANU to carry out the fuels import opera-
her costs of sales during the term.
million, largely overcoming the US$0.4 million
loss recorded in 2007. Worth mentioning is the
tions in Peru. Also, it performs retail activities in
this country through its associate Primax S.A.,
On the other hand, Primax S.A. net result in Peru,
acquisition, this year, from the Spanish company
and also in Ecuador, through its participation in
where MANU participation amounts to 49%, was
Repsol, of the fuels and lubricants business in
the associate Holding Primax.
US$16.5 million, with a sales volume of 1.6 million
Ecuador, an agreement that includes 123 service
m3 and a 24% market share. Such figures are higher
stations, which added to the 64 already existing
MANU Peru consolidated result, including its par-
than those of 2007, when the net result amounted
in this market.
ticipation in Primax, amounted to US$5.0 million,
to US$ 11.8 million, with sales of 1.5 million m3.
lower than the US$15.8 million achieved in 2007, a
difference mainly explained by the lower exploi-
Finally, Primax distributor in Ecuador, with sales of
tation margin, originated by the sharp drop in the
417,000 cubic meters and an estimated 8% mar-
INDEX
107
108
•
ANNUAL REPORT 2008
ENAP in the World
IRAN
› Mehr Block
EGYPT
› Western Desert Basin
› North Bahariya Block
› East Ras Qattara Block
ECUADOR
› MDC and PHB Block
› Primax
PERU
› MANU
› Primax
CHILE
› Santiago Main Office
› Aconcagua Refinery
› Bío Bío Refinery
› Maipú, San Fernando and Linares plants
› ENAP in Magallanes
› Vinapu Terminal for fuel storage,
Easter Island
ARGENTINA
› Sipetrol Subsidiary Buenos Aires
› Sipetrol Subsidiary Río Gallegos Office
› Neuquén Basin La Invernada Block
› Cuenca Southern Marine Basin
› Área Magellanes Block
› CAM 2-A Sur Block
› CAM 3 Block
› CAM 1 Block
› San Jorge Gulf Basin
› Campamento Central Cañadón Perdido Block
› Pampa del Castillo Block
•
Enap Products
FUELS
KEROSENE
• Gasoline 97 octane
• Aviation Fuel (100/130)
• Household Kerosene
• Aviation Kerosene JET A1
SULFUR
LIQUEFIED GAS
• Butane
• Propane
• Propylene
• Fuel for lighters
and aerosols
LUBRICANTS
GAS OIL
SOLVENTS
• Trementine essence
• Benzene
• Xylene
• White gasoline
• Diluents
• Mining solvents
FUEL OILS
• Fuel Oil N6
• Marine Fuel IFO 380
• Marine Fuel IFO 180
DIESEL
• Diesel Ciudad
• Diesel B
ASPHALTS
• Coke
• Impermeabilizers
• Asphaltic Cement
NATURAL GAS
PETROCHEMICALS
• Industrial and household
natural gas
• Methanol
• Ethylene
• Polyethylene
• Propylene
• Low density plastics
• High density plastics
• Polypropylene
NATURAL GAS
CRUDE OIL
Third parties products
HYDROCARBONS
Associate companies products
INDEX
ANNUAL REPORT 2008
109
ASSOCIATES
DATE OF INCORPORATION
SUBSCRIBED
AND PAID-UP COMPANY’S PURPOSE
CAPITAL
COMPANY’S BOARD OF DIRECTORS
Chairman
Vice-Chairman Directors
Alternate Directors
PRIMAX S.A.
August 16, 2004 ThUS$
58.880
To develop, either directly or indirectly, import, industrialization, storage, customs deposit, either
Fernando Feliciano Romero
authorized or simple, distribution, transportation, wholesaler or retail marketing operations and/or the Belismelis
rest of the operations, activities and services related to hydrocarbons sector, including natural gas, pursuant to the stipulations of the Hydrocarbons General Law, its regulations and the rest of the amending
and substituting stipulations enacted or to be issued in the future.
Sergio Arévalo Espinoza**
Belismelis; Luis Enrique Romero
Belismelis; Guillermo del Valle
de la Cruz, Rodrigo Azócar
Hidalgo*.
PRIMAX
HOLDING S.A.
July 25, 2006
US$ 800
To purchase shares, participations and rights in other companies on its own behalf. Also, the company Executive President: Marco
will be entitled to participate in the holding company, or in the shares, participations and rights of other Antonio Echaiz (Legal
companies, both in Ecuador and in foreign countries.
Representative)
Belismelis; Luis Enrique Romero
Belismelis; Guillermo del Valle
de la Cruz, Rodrigo Azócar
Hidalgo*.
PETROPOWER
ENERGÍA LTDA.
December 22,
1992
ThUS$
70.461
The purpose of the company is to carry out, either directly or through third parties, in the domestic
territory or in foreign countries, a feasibility, technical-economic, financial and juridical study for the
construction and exploitation of a delayed coker plant, including a co-generation hydro-treatment
plant.
Martín Karpenski, John Crider,
Ramón Zubizarreta, Jesús Cárdenas, Thierry Desmaris, Carlos
Cabeza Faúndez, Sergio Arévalo
Espinoza**.
Thomas A. Kowalczyk, Jaime
Carey, Rohit Chib, Anthony
Scerbo, Javier Palencia, Juan
Carlos Gacitúa Bustos, Alfonso
Yáñez Macías.
GNL CHILE S.A..
November 16,
2005
ThUS$ 3.026 To retain the services of GNL Quintero S.A.., and use all storage, processing and re-gasification capacity Rodrigo Azócar Hidalgo*
for natural liquefied gas from the re-gasification terminal owned by it, including their enhancements, if
any, and any other matter that the company subscribes to use this terminal. Rodrigo Azócar Hidalgo *,
Rafael Mateo Alcalá y Eduardo
Morandé Montt
Rosa Herrera Martínez, José
Agustín Venegas y Gonzalo
Palacios Vásquez.
GNL
Quintero S.A..
March 9, 2007
ThUS$
195.882
To develop, finance, design, engineer, supply, construction, start-up, tests, conclusion, operation and
maintenance of a liquefied natural gas (GNL) and its enhancements, if any.
Elizabeth Grace Spomer , William Jude Way, Rodrigo Azócar
Hidalgo*, Eduardo Morandé
Montt, Rafael Mateo Alcalá
Graham Cockroft, Diego
Hollweck, Sergio Arévalo Espinoza**, Claudio Iglesis Guillard,
Francisco Gazmuri Schleyer.
A & C PIPELINE
HOLDING
December 22,
1992
ThUS$ 900
To control Oleoducto Trasandino (Argentina) S.A. and Oleoducto Trasandino (Chile) S.A.
Gabriel César Grzona
Salvador
Harambour
Palma
Gabriel César Grzona, Gustavo Daniel Rellán, Raúl Ángel RodríChaab, Salvador Harambour
guez, Víctor Briano Peralta, Juan
Palma, Gastón Ramos González, Carlos Gacitúa Bustos
Guillermo Rocchetti.
OLEODUCTO
December 22,
TRASANDINO
1992
(ARGENTINA) S.A.
ThUS$
45.400.
To build and exploit an oil pipeline across the Andes, between Argentina and Chile, as well as its operation inside the territory of the Republic of Argentina.
Gabriel César Grzona
Salvador
Harambour
Palma
Gabriel César Grzona, Gustavo Daniel Rellán, Raúl Angel RodríChaab, Salvador Harambour Pal- guez, Hugo Fuentes Bizama, Juan
ma, Gastón Ramos, Guillermo
Carlos Gacitúa Bustos
Rocchetti.
OLEODUCTO TRASANDINO
(CHILE) S.A.
December 11,
1992
Th$
14.786.820
To independently, or in association with third parties, carry out the construction and exploitation of an
oil pipeline between the Republic of Chile and the Republic of Argentina, and the operation of same in
the territory of the Republic of Chile.
Gastón Ramos González
Gabriel César
Grzona
Gastón Ramos González,
Gabriel César Grzona, Guillermo Rocchetti, Hugo Fuentes
Bizama, Gustavo Chaab
Salvador Harambour Palma,
Daniel Rellán, Germán Laria,
Raúl Rodríguez, Juan Carlos
Gacitúa Bustos
ÉTERES Y
ALCOHOLES S.A.
March 10, 2000
ThUS$ 6.859 To build and operate a DIPE (di iso propil ether) plant, at a site of Enap Refinerías S.A. located at
Concón, to exclusively render services to its propane-propylene flows.
Sergio Arévalo Espinoza**
Daniel Martínez Bonansco,
Daniel Ramírez Livingstone,
José Aravena Navarrete,
Roberto Hahn Weigun, Fabio de
Assis Lobo
Vicente García Olave, Italo
Olivares Díaz, Hernán Águila
Fuentes, Kai Jacobsen, Helmuth
Muehlemeier
PETROSUL S.A..
October 17, 2001 ThUS$ 7.292 To build and operate two plants of Enap Refinerías S.A., one at a site located at Concón, and another at
a site located at Hualpén, with the purpose of rendering exclusive services to such refining plants, for
the processing of their acid gas flows.
Edzard zu Knyphausen
Daniel Martínez Bonansco,
Daniel Ramírez Livingstone,
Hernán Águila Fuentes, Roberto
Hahn Weigun, Fabio de Assis
Lobo
Vicente García Olave, Italo
Olivares Díaz, José Pérez Quilodrán, Kai Jacobsen, Helmut
Muehlemeier
PRODUCTORA
DE DIESEL S.A.
January 15, 2004 ThUS$ 8.001 To build and operate a complex aimed to the refining of oil-derived products.
Carlos Cabeza Faúndez
Jan Huss, José Luis Gutiérrez
Patrick Haas, José Luis Tapia
Rexach, Carlos Cabeza Faúndez, Benito, Walton Cherres Cornejo.
Juan Carlos Gacitúa Bustos
ENERGÍA
CONCÓN S.A.
November 25,
2002
ThUS$
19.500
To build and operate a delayed coker complex, at a site of Aconcagua refining plant, owned by Enap
Daniel Ibarra Moraga
Refinerías S.A.; to render services to Enap Refinerías S.A. for the processing of crude oil barrel bottoms,
for their transformation into light products, or to lease its facilities to such company.
Daniel Ibarra Moraga, Carlos
Cabeza Faúndez, Jesús Cadenas
R., Fabio A. Lobo, José Luis
Gutiérrez Rexach
Daniel Ramírez Livingstone, Sergio Arévalo Espinoza**., Ramón
Zubizarreta S., Kai Jacobsen, José
Luis Tapia B.
Jorge Bunster Betteley, Arturo
Natho Gamboa, Salvador Harambour Giner, Nelson Muñoz
Guerrero, Julio Bertrand Planella
Ramiro Méndez Urrutia, Gonzalo Aspillaga Herrera, Ricardo
Budinich Diez, Sergio Azzari
Maldonado, Julio Mayanz Csato.
Paula Hidalgo Mandujano **,
Ángel Mafucci Solimano, Luis
Felipe Silva Labbé, Carlos Sánchez Nieto y Eduardo Groves
Muñoz.
Mario del Río González, Juan
Manuel Santa Cruz Munizaga,
Mario Fernández Astudillo, Luis
Guzmán Suárez y Gabriel Bauzá
Fredes.
COMPAÑÍA LATI- December 31,
NOAMERICANA 1992
PETROLERA S.A.
Th$ 8.520.353 To carry out in foreign countries, either on its own or third parties behalf, oil, gas and their derivates
exploration and exploitation projects, as well as the purchase and sale, import, export and marketing
of such products.
NORGAS S.A.
August 12, 1996
Th$
2.229.636
GEOTÉRMICA
DEL NORTE S.A.
December 29,
2000
Th$ 16.657.133 To do research, exploration, to develop and exploit geo-thermal energy, as well as all its supplementary Nelson Muñoz Guerrero
activities.
Julio Bertrand “Valerio Cecchi, Luca Rossini,
Planella
Julio Bertrand Planella, Nelson
Muñoz Guerrero.
Fernando Ramírez, Nicola Melchiotti, Julio Mayanz y Lisandro
Rojas Galliani.
EMPRESA
NACIONAL DE
GEOTERMIA S.A.
January 5, 2001
Th$
6.286.683
To do research, exploration, to develop and exploit geo-thermal energy, as well as all its supplementary Nelson Muñoz Guerrero
activities.
Julio Bertrand “Valerio Cecchi, Luca Rossini,
Planella
Julio Bertrand Planella, Nelson
Muñoz Guerrero
Fernando Ramírez, Nicola
Melchiotti, Julio Mayanz,
Lisandro Rojas
GAS DE CHILE
S.A.
March 15, 1994
Th$ 961.694
To import, export and, in general, operate any kind of fuels and derivate by-products, especially natural
gas in any of its states. To acquire, divest, offer or receive for lease, use, enjoyment or granting of its
assets. To carry out engineering and research works related to its activity. To participate in any kind of
associations, inside the country or in foreign countries. To invest in any kind of movable assets and real
estate, and in financial instruments, with the purpose of maximizing the yield of its surpluses.
Rosa Herrera
Martínez
Rosa Herrera Martínez, Víctor
Briano Peralta, Edgel Sereno,
Isaac Mizrahi
Adolfo Sabando, Exequiel González, Ricardo Peña Vial, Verónica
Laura de Santis
INNERGY
HOLDINGS S.A.
January 23, 1998
Th$
97.966.636
To participate in companies which purpose is to buy, sell, marketing and supply natural gas, or to build, Carmen Figueroa Deisler
exploit and operate all kind of natural gas transportation networks. To render management or administrative services to its subsidiaries, or to third parties.
Carmen Figueroa Deisler, Matías
Pérez Cruz, Gerardo Cood Schopke, Benoit Gauvin, Felipe Bahamondes Prieto, Gabriel León
Burgos, Rosa Herrera Martínez, Sergio Arévalo Espinoza**,
Eduardo Cabello Correa.
Pablo Sobarzo Mierzo, Lorena
León Cubillos,Sergio Concha
Márquez de la Plata, Paul Miller,
Andrés Ocare Flores, Víctor
Briano Peralta, Roberto Píriz
Simonetti.
COMPAÑÍA DE
HIDROGENO
DEL BÍO BÍO S.A.
February 17,
2003
ThUS$ 6.597 To build and operate a plant devoted to hydrogen production, from natural gas and other loads.
Ramón Aboitiz Musatadi
Ramón Aboitiz Musatadi;
Horacio Pavez García, Norman
Juan Eduardo Errázuriz Ossa;
Hansen Roses, Mario Santander
Naoshi Matsumoto Takahashi; García y Hugo Fuentes Bizama.
Alejandro Marty Calvo y Walton
Cherres Cornejo.
ENERGÍA
ANDINA S.A.
October 20,
2008
ThUS$ 22.120 To carry out geo-thermal energy research or exploration activities, by performing studies, measurements and the rest of research projects aimed to determine the existence of geo-thermal resources,
their physical and chemical characteristics, their geographic extension, as well as their use fitness and
conditions.
Juan Claro González
Juan Claro González, Ricardo
Muhr Munchmeyer, Patricio
Cartagena Díaz, Rodrigo Azócar
Hidalgo* y Nelson Muñoz
Guerrero
Marcelo Awad, Renán Argandoña Ramos, Nicolás Causade
Coudeu, Julio Bertrand Planella,
Lisandro Rojas Galliani
GOLFO DE GUAYAQUIL PETROENAP COMPAÑÍA
DE ECONOMÍA
MIXTA
September 15,
2008
ThUS$ 100
Luis Aurelio Jaramillo Arias Guillermo
Campaña
Germán Rebolo, Julio Bertrand
Planella, Guillermo Campaña,
Luis Jaramillo, Luis Cabrera
Juan Carlos Andrade y Lupercio
Arteaga.
FORENERGY S.A.
August 10, 2007 ThUS$ 572
Juan José Cueto Plaza, Pablo
Vargas Castro, Guillermo del
Valle de la Cruz y Daniel Ibarra
Moraga.
Pedro Antonio García Hernández, Pedro Antonio García Eyheramendy, Pedro Barría Schulz y
Gerardo Passeron Peters.
Jorge Bunster Betteley
To import, export and purchase oil liquefied gas, as well as its sales to wholesale distributors at Tarapacá Luis Felipe Silva Labbé
and Antofagasta regions, and also all technical and commercial procedures directly related to them.
To develop activities in all and any phases of the oil industry, oriented to the optimal use of hydrocarbons that belong to the inalienable and imprescriptible heritage of the State of Ecuador, including
scientific research, the creation and transfer of technology, being entitled to carry out all the actions
and contracts allowed by the Law.
Víctor Briano Peralta
To carry out studies for the general, technical, economic, juridical and financial feasibility of a second generation Pablo Vargas Castro
bio-diesel production project, from forestry biomass or other raw material of domestic origin. To produce and
commercialize second generation bio-diesel from forestry biomass, including to determine the feasibility and to
perform the installation, construction and development of a pilot plant process.
Eduardo Groves Muñoz
*Mr. Rodrigo Azócar Hidalgo replaced Mr. Enrique Dávila Alveal after his resignation, on December 29th, 2008; **Mr. Sergio Arévalo Espinoza and Ms. Paula Hidalgo Mandujano handed their resignations to the boards in which they appear; (1) Includes ENAP’s and sub
Enap Refinerías S.A., and (3) An associate of the subsidiary Enap Sipetrol S.A.
MAIN EXECUTIVE OFFICERS
ENAP´S VPP ENAP’S OFFICERS AT ASSOCIATE
CEO: Marco Antonio Álvarez
Echaiz
49%2
Rodrigo Azócar Hidalgo *, Guillermo del Valle de la Cruz, directors. Sergio Arévalo Espinoza**, alternate director.
COMMERCIAL RELATIONS
ACTIONS OR CONTRACTS ENTERED INTO
Investment Participation
in ENAP’s total assets
Purchase and receive products from Enap
Refinerías S.A., for their distribution through
Distribuidora Primax S.A. network.
Liquid fuels and other hydrocarbon derivate products supply agreement.
0,6709%
Executive President: Marco An- 49%2
tonio Álvarez Echaiz (Legal Representative). Chairman: Mario Arze Contreras
Directors: Rodrigo Azócar Hidalgo * and Guillermo del Valle
de la Cruz
CEO: Ramón Zubizarreta S.
15%
Directors: Carlos Cabeza Faúndez, Sergio Arévalo Espinoza**.
Alternate Directors: Juan Carlos Gacitúa Bustos and Alfonso
Yáñez Macías.
Sale of electric energy, water, commission for
coker processing, property right, warranties.
1) Partners Agreement, 2) Processing Service and Supply Agreement, both dated 0,2000%
January 15, 1996, 3) Usufruct And Easement Agreement, 4) Arbitration Agreement,
both dated February 7th, 1996, and 5) Electric Energy Agreement, dated May 2,
2000.
CEO: Antonio Bacigalupo
33,33%
Director: Rodrigo Azócar Hidalgo*. Alternate Director: Rosa Herrera Martínez
No commercial relations
1) Gas Sales Agreement between Enap Refinerías S.A. and GNL Chile S.A., 2) SDA
between Enap Refinerías S.A., GNL Chile and BG LNG Trading. CEO: Antonio Bacigalupo
20%
Chairman of the Board: Rodrigo Azócar Hidalgo*. Alternate
Director: Sergio Arévalo Espinoza**
1) Sale and purchase agreement between Enap Refinerías S.A. and GNL Quintero; 0,7910%
2) Options Agreement, between ENAP and GNL Quintero; 3) Transfer of environmental permits agreement between ENAP and GNL Quintero; 4) Authorization
agreement by Enap Refinerías S.A. to GNL Quintero; 5) Tua Direct Agreement,
between Enap Refinerías S.A., among others, and GNL Quintero; 6) Framework
Arbitration Agreement, 7) Company Guaranty by ENAP to CB&I .
36,25%
Directors: Salvador Harambour Palma and Gastón Ramos
González. Alternate Directors: Víctor Briano Peralta and Juan
0,0017%
35,79%
Alternate Directors: Salvador Harambour and Gastón Ramos
González. Alternate Directors: Hugo Fuentes Bizama and Juan
0,0980%
CEO: Eduardo Fernández
0,0006%
0,0000%
CEO: Jaime Pulido Espinosa.
35,83%
Administration and Finance
Manager: Ana Charles Coddou.
Regional Manager: Elías Bartulovich Musac.
Directors: Gastón Ramos, Hugo Fuentes Bizama. Alternate Direc- Crude transportation service, loading services; Tanks and pipes rental service.
tors: Salvador Harambour Palma and Juan Carlos Gacitúa Bustos oil pipeline lease; crude storage tanks lease.
CEO: Fabio de Assis Lobo.
41,74%1
Chairman of the Board: Sergio Arévalo Espinoza**; Directors:
Raw material processing service for the proDaniel Martínez Bonansco and Daniel Ramirez Livingstone; Alter- duction of DIPE for Enap Refinerías S.A.
nate Directors: Vicente García Olave and Italo Olivares Díaz.
CEO: Fabio de Assis Lobo
47,39%1
Directors: Daniel Martínez Bonansco and Daniel Ramírez
Livingston; Alternate Directors: Vicente García Olave, Italo
Olivares Díaz.
CEO: Fabio de Assis Lobo
45%1
Directores titulares: Carlos Cabeza Faúndez y Juan Carlos Gacitúa Gasoil processing services for diesel producBustos; Directores suplentes: Walton Cherres Cornejo y David
tion at Bío Bío refining plant.
Socha Oyarce
Agreement with Enap Refinerías S.A. for: 1) processing; 2) operation and maintenance; and 3) land bailment.
0,1203%
CEO: Mario Cúneo Bosco
49%1
Directors: Daniel Ibarra Moraga and Carlos Cabeza Faúndez.
Alternate Directors: Daniel Ramírez Livingstone and Sergio
Arévalo Espinoza**
Crude oil bottom of barrel processing service;
operation and maintenance of the Complex
facilities.
1) Processing Services agreement.
2) Operation and Maintenance agreement.
3) Usufruct agreement.
0,3035%
CEO: Ramón Concha Barrientos 40%1
Directors: Nelson Muñoz Guerrero and Julio Bertrand Planella.
Alternate Directors: Sergio Azzari Maldonado and Julio Mayanz
Csato.
Commercial partners in hydrocarbon
exploration and production projects abroad.
Participation at projects in Colombia.
Huila Norte agreement
Altamizal agreement
0,0752%
CEO: Claudia Gariazzo Pinnau
42%
Directors: Paula Hidalgo Mandujano** and Eduardo Groves
Muñoz. Alternate Directors: Gabriel Bauzá Fredes and Mario del
Río González.
Purchase of bulk gas and miscellaneous
transportation services.
CEO: Oscar Valenzuela
47,53%
Directors: Julio Bertrand Planella and Nelson Muñoz Guerrero.
Alternate Directors: Julio Mayanz Csato and Lisandro Rojas
Galliani.
Technical Advisory and service agreements.
Technical advising agreement and open services agreement.
0,1692%
Directors: Julio Bertrand Planella and Nelson Muñoz Guerrero.
Alternate Directors: Julio Mayanz Csato and Lisandro Rojas
Galliani.
Technical Advisory and service agreements.
Technical advising agreement and open services agreement.
0,0125%
50%
Directores Titulares: Víctor Briano Peralta y Rosa Herrera Martínez. Directores suplentes: Adolfo Sabando y Exequiel González.
CEO: Rodolfo Freyre
25%
Directors: Rosa Herrera Martínez and Sergio Arévalo Espinoza**. Purchase of natural gas, including transporAlternate Directors: Andrés Ocare Flores and Víctor Briano
tation service.
Peralta.
CEO: Rodrigo González G.
10%1
Walton Cherres Cornejo, director; Hugo Fuentes Bizama,
alternate director.
José Manuel Soffia, Jorge
Clavero Ribess
40%
Directors: Rodrigo Azócar Hidalgo and Nelson Muñoz Guerrero.
Alternate Directors: Julio Bertrand Planella and Lisandro Rojas
Galliani.
40%3
Directors: Julio Bertrand Planella and Germán Rebolo. Alternate
Directors: Lupercio Arteaga and Juan Carlos Andrade.
40%2
Directors: Guillermo del Valle de la Cruz and Daniel Ibarra
Moraga. Alternate Directors: Gerardo Passeron Peters and Pedro
Barría Schulz.
CEO: Oscar Valenzuela. Techni- 49%
cal Manager: Martino Pasti.
CEO: Pedro Barría Schulz
bsidiaries participation; (2) An associate of the subsidiary
0,1211%
Processing services agreement, Bailment agreement and Operation, maintenance 0,1211%
and management of DIPE plant agreement with Enap Refinerías S.A.
Gas flow processing service for acid at Aconca- Processing service agreement, Land bailment agreement and Operation, maintegua and Bío Bío refining plants, owned by Enap nance and management of plant agreement with Enap Refinerías S.A.
Refinerías S.A.
0,1289%
0,0420%
0,0057%
Natural gas purchase agreement Hydrogen production from natural gas and
Agreements with Enap Refinerías S.A.: processing, operation and maintenance
other loads at Bío Bío refining plant processing and land bailment. services.
0,0000%
0,0222%
0,1226%
Shareholders Memorandum of Understanding by Empresa Golfo de Guayaquil
0,0008%
Petroenap Compañía de Economía Mixta, for Block 40, entered into on September
16, 2008.
0,0042%
1 12
GRUPO DE EMPRESAS ENAP
•
MEMORIA ANUAL 2008
•
ANNUAL REPORT 2008
CONSOLIDATED BALANCE SHEETS
At december 31, 2008 and 2007
>>Independent Auditors' Report
>>Consolidated Balance Sheets >>Consolidated Statements of Income
>>Consolidated Statements of Cash Flows
>>Notes to the Consolidated Financial Statements
INDEX
Pag. 114
Pag. 115
Pag. 117
Pag. 118
Pag. 120
113
11 4
•
ANNUAL REPORT 2008
Independent Auditors' Report
•
ANNUAL REPORT 2008
EMPRESA NACIONAL DEL PETROLEO AND SUBSIDIARIES
Consolidated Balance Sheets
ASSETS
2008
ThUS$
2007
ThUS$
81,836
96,979
7,913
18,858
CURRENT ASSETS:
Cash and banks
Time deposits
Marketable securities, net
Trade receivables, net
Miscellaneous receivables, net
Notes and accounts receivable from related companies
-
17,119
712,866
977,073
82,374
99,888
47,297
101,806
Inventories, net
853,866
1,602,390
Recoverable taxes
232,323
306,519
Prepaid expense
17,749
22,369
Deferred taxes
82,293
-
Other current assets
Total current assets
152,156
78,171
2,270,673
3,321,172
PROPERTY, PLANTS AND EQUIPMENT:
Land
Construction and infrastructure
Machinery and equipment
Other property, plants and equipment
21,042
16,154
4,493,873
4,314,586
75,758
70,666
827,560
395,533
(3,147,740)
(3,002,883)
2,270,493
1,794,056
146,724
103,093
61,448
61,450
2,670
4,582
Long-term receivables
21,012
27,250
11,465
14,655
Deferred taxes
26,816
16,581
Less: Accumulated depreciation
Net property, plants and equipment
OTHER ASSETS:
Investments in related companies
Investments in other companies
Goodwill, net
Other
Total other assets
TOTAL ASSETS
INDEX
60,775
97,642
330,910
325,253
4,872,076
5,440,481
115
1 16
•
ANNUAL REPORT 2008
LIABILITIES AND EQUITY
2007
2008
ThUS$
ThUS$
644,613
2,382
5,866
1,363
1,514,604
304,978
23,273
20,571
124,138
86,028
71
48,794
2,776,681
40,529
25,559
6,083
1,530
2,470,211
145,221
6,541
17,677
58,316
43,259
71
4,973
32,974
2,852,944
Liabilities with banks and financial institutions
370,000
370,000
Bonds payable
549,546
568,346
Notes payable
3,229
3,445
CURRENT LIABILITIES:
Short-term bank liabilities
Long-term liabilities with banks and financial institutions - current portion
Bonds payable
Other long-term liabilities, current portion
Accounts payable
Notes payable
Miscellaneous payable
Notes and accounts payable to related companies
Accruals
Withholdings
Unearned revenue
Deferred taxes
Other current liabilities
Total current liabilities
LONG-TERM LIABILITIES:
14,095
17,855
Notes and accounts payable to related companies, long-term
615,657
197,702
Accruals
197,126
360,376
Other long-term liabilities
Total long-term liabilities
Minority interest
84,598
79,976
1,834,251
1,597,700
(166)
264
EQUITY:
Paid-in capital
1,182,700
932,700
Other reserves
(50,329)
(68,109)
86,730
75,350
Retained earnings:
Accumulated gains
Net (loss) income for the year
Total equity
TOTAL PASIVOS Y PATRIMONIO
(957,791)
49,632
261,310
989,573
4,872,076
5,440,481
•
ANNUAL REPORT 2008
Consolidated Statements of Income
CONSOLIDATED STATEMENTS OF INCOME
For the years ended december 31, 2008 and 2007
2008
ThUS$
2007
ThUS$
OPERATING REVENUE
Operating Revenue
Operating Costs
GROSS (LOSS) PROFIT
Selling and Administrative Expenses
OPERATING (LOSS) PROFIT
12,185,212
(13,017,480)
(832,268)
(104,874)
(937,142)
9,019,315
(8,728,595)
290,720
(91,246)
199,474
NON-OPERATING INCOME (EXPENSES):
Financial income
Equity in earnings of equity-method investees
Other non-operating income
Equity in loss of equity method investees (less)
Amortization of goodwill (less)
Financial expenses (less)
Other non-operating expenses (less)
Net foreign exchange difference
Non-operating expense, net
(LOSS) INCOME BEFORE INCOME TAXES AND MINORITY INTEREST
Income Tax Benefit (Expenses)
(LOSS) INCOME BEFORE MINORITY INTEREST
Minority Interest
NET (LOSS) INCOME FOR THE YEAR
70,694
17,666
48,035
(12,176)
(1,912)
(211,013)
(26,929)
(128,397)
(244,032)
(1,181,174)
222,945
(958,229)
438
(957,791)
8,881
14,484
74,733
(9,091)
(1,154)
(145,247)
(7,667)
2,991
(62,070)
137,404
(87,764)
49,640
(8)
49,632
INDEX
117
1 18
•
ANNUAL REPORT 2008
Consolidated Statements of Cash Flows
CONSOLIDATED STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES:
Collection from trade accounts receivable
Financial income
Dividends and other distributions received
Other income
Payment to suppliers and personnel
Interest paid
Income tax paid
Other expenses paid
Value added tax and other taxes paid
Total net cash (used) provided by operating activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of shares
Borrowings
Repayment of loans
Total net cash provided by financing activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales of property, plants and equipment
Sales of investment in related company
Collection of loans in related companies
Other investment income
Additions to property, plants and equipment
Payment of capitalized interest
Investments
Investments in financial instruments
Other loans to related companies
Other investing activities
Total net cash used in investing activities (370,136) (506,946)
TOTAL NET CASH FLOW FOR THE YEAR 13,376 47,006
OPENING BALANCE OF CASH AND CASH EQUIVALENTS
ENDING BALANCE OF CASH AND CASH EQUIVALENTS
2008
ThUS$
2007
ThUS$
15,652,410
74,227
28,165
744,923
(12,778,126)
(198,665)
(116,200)
(23,586)
(3,825,343)
(442,195)
10,278,107
6,544
20,668
78,070
(7,916,875)
(123,068)
(247,433)
(42,546)
(1,504,307)
549,160
250,000
1,871,587
(1,295,880)
825,707
131,217
(126,425)
4,792
6,025
435
96,877
10,357
(371,745)
(95)
(21,475)
(517)
(59,615)
(30,383)
(370,136)
13,376
132,956
146,332
39,520
2,513
(454,602)
(15,959)
(76,125)
(2,293)
(506,946)
47,006
85,950
132,956
•
ANNUAL REPORT 2008
Income from sale of assets:
Profit on sale of property, plants and equipment
Profit on sale of other assets
Charges (credits) to income not representing cash flow:
Depreciation
Accruals and write-offs
Equity in loss equity-method investees
Amortization of goodwill
Other credits to income that do not represent cash flow
Other charges to income that do not represent cash flow
Decrease (increase) in assets affecting cash flow:
Trade receivables
Inventories
Other assets
Increase (decrease) in liabilities affecting cash flow:
Acounts payable related to operating income
Interest payable
Income tax payable, net
Other accounts payable related to non-operating income
Value added tax and other taxes payable (net)
Income related to minority interest
The accompanying notes are an integral part of these consolidated financial statements
INDEX
2008
ThUS$
(957,791)
(25)
(25)
2007
ThUS$
49,632
(27,476)
(27,476)
-
390,692
233,200
63,403
(17,666)
12,176
1,912
128,397
(63,790)
33,060
200,271
230,584
6,395
(14,484)
9,091
1,154
(2,991)
(32,426)
2,948
13,689,457
12,772,002
730,993
186,462
(1,343,520)
(666,321)
(712,993)
35,794
(13,564,090)
(11,599,844)
5,134
(250,851)
(2,739)
(1,715,790)
(438)
(442,195)
1,670,245
3,544,896
16,919
(94,306)
(368)
(1,796,896)
8
549,160
119
120
•
ANNUAL REPORT 2008
Notes to the Consolidated Financial Statements
NOTE 1 | REGISTRATION IN THE
SECURITIES REGISTER
Empresa Nacional del Petróleo (ENAP) is the par-
Petro Servicio Corp. S.A. and Enap Sipetrol S.A.
ties and Insurance. In case of a discrepancy, the
ent to the group of companies referred to in these
perform one or more of the activities consisting in
latter prevail.
consolidated financial statements.
the exploration, exploitation or extraction of ores
containing hydrocarbons outside of Chile.
c. Basis of presentation
Enap Sipetrol S.A. has branches in Ecuador, Argen-
sued by the Internal Revenue Service (IRS) dated
de Valores y Seguros (Superintendency of Securi-
tina and Venezuela and subsidiaries in Argentina,
October 1, 2004 and Communication No. 11,108
ties and Insurance), under N°783. Accordingly, the
United Kingdom, Ecuador and Uruguay.
issued by the Superintendency of Securities and
In accordance with Exempt Resolution No. 190 is-
On October 4, 2002, the Company was registered
in the Securities Register of the Superintendencia
Insurance dated November 26, 2004, the Compa-
Company is subject to the regulations of the Superintendency of Securities and Insurance.
The Enap Refinerías S.A. subsidiary, is a closely held
ny was authorized to keep its accounting records
corporation, voluntarily registered in the Securities
in US dollars under the terms and conditions re-
The Company’s subsidiaries whose financial state-
Register of the Superintendence of Securities and
quired by Article 18, subsection 3° of the Tax Code,
ments are included in the consolidation are compa-
Insurance, under Nº 833, as of June 25, 2004.
from January 1, 2005.
nies located in Chile as well as abroad.
The Enap Sipetrol S.A. subsidiary, is a closely held
d. Basis of consolidation
Empresa Nacional del Petróleo (ENAP) was created
corporation, voluntarily registered in the Securities
The consolidated financial statements have been
by Law 9,618 of June 19, 1950 and is owned by the
Register of the Superintendence of Securities and
prepared in accordance with Technical Bulletin
Chilean Government. Pursuant to that law and sub-
Insurance, under Nº 1005, as of June 23, 2008.
No. 72 (which repealed in part Technical Bulletin
N°42) of the Chilean Institute of Accountants,
sequent amendments, it is engaged mainly in the
exploration, exploitation and processing of hydro-
NOTE 2 | SUMMARY OF SIGNIFICANT
and in accordance with Circular Nº1697 (which
carbon deposits. It is authorized to conduct that
ACCOUNTING POLICIES
repealed Circular N°368) of the Superintendency
of Securities and Insurance.
business in Chile and abroad. It is also the parent
company of the following subsidiaries: Enap Re-
a. Accounting period
finerías S.A., Enap Sipetrol S.A. and Petro Servicio
These consolidated financial statements cover
Corp. S.A. and owns a branch office in Argentina.
the years ended December 31, 2008 and 2007.
The financial statements of the foreign companies at December 31, 2008 and 2007 have been
prepared in accordance with Technical Bulletins
Enap Refinerías S.A. (ERSA) refines both local
b. Bases of preparation
Nos. 72, 64 and 42 of the Chilean Institute of Ac-
petroleum acquired by ENAP and petroleum im-
These consolidated financial statements have
countants, depending on the date these were ad-
ported from foreign suppliers. Petroleum and prod-
been prepared in accordance with accounting
opted.
uct imports are financed by ENAP through direct
principles generally accepted in Chile as issued
payments to suppliers. In addition, it provides re-
by the Chilean nstitute of Accountants and the
The following table shows the subsidiaries in-
ception and storing services for hydrocarbons, by
standards issued by Superintendency of Securi-
cluded in the consolidation:
means of its terminals and storage tanks.
Percentage of ownership
Taxpayer N°
87.756.500-9
Foreign
96.579.730-0
Foreign
Foreign
Foreign
Foreign
Foreign
Foreign
Company name
PETRO SERVICIO CORP. S.A (ARGENTINA)
ENAP SIPETROL S.A.
ENAP SIPETROL ARGENTINA S.A (Subsidiary of Enap Sipetrol S.A.)
SIPETROL BRASIL LTDA. (Subsidiary of Enap Sipetrol S.A.)
ENAP SIPETROL (UK) LIMITED (Subsidiary of Enap Sipetrol S.A.)
SIPETROL INTERNATIONAL S.A (URUGUAY) (Subsidiary of Enap Sipetrol S.A.)
SOC. INTERNACIONAL PETROLERA ENAP ECUADOR
MANU PERÚ HOLDING S.A. ((Subsidiary of Enap Refinerías S.A.)
2008
Direct %
Indirec %
99.9800
0.0000
99.9900
0.0100
99.6139
0.3861
0.5000
99.5000
0.0000
0.0000
0.0000
100.0000
0.0000
100.0000
0.0000
100.0000
0.0001
99.9999
All significant inter-company transactions, unrealized results, and balances have been eliminated in consolidation and the interest of minority investors is shown as minority interest.
Total %
99.9800
100.0000
100.0000
100.0000
0.0000
100.0000
100.0000
100.0000
100.0000
2007
Total %
99.9600
100.0000
100.0000
100.0000
99.9000
100.0000
100.0000
100.0000
100.0000
•
ANNUAL REPORT 2008
e. Basis for conversion
production cost. The value of inventories does not
evaluating the recoverability of its assets value in
Transactions performed during the year in Chil-
exceed their net realizable value. Sales prices of
accordance with Technical Bulletin No. 33 issued by
ean pesos, unidades de fomento (inflation index-
finished products and replacement costs of crude
the Chilean Institute of Accountants.
linked units of account) or in foreign currencies
oil have been considered for these purposes.
Fixed assets available for sale have been reclassified
other than the US dollar, are recorded at the observed dollar exchange rate at the date of trans-
Inventories of supplies in warehouse are valued
as other current assets at their book value, which
action.
at acquisition cost after deducting obsolescence
does not exceed their net realizable value.
provisions.
l. Depreciation of property, plant and equipment
Assets and liabilities at year-end which are in
Chilean pesos, unidades de fomento (inflation
The obsolescence provision is based on a techni-
Depreciation is calculated using the straight- line
index-linked units of account) or a foreign cur-
cal evaluation of the supplies estimated not to
method over the estimated useful lives of the as-
rency other than the US dollar, are shown at the
be used in the future for production.
sets, except for oil fields, whose depreciation is
k. Property, plants and equipment
This calculation is made taking into account the
calculated using the unit of production method.
observed dollar exchange rate at year-end, according to the following exchange rates:
2008
Chilean peso per US dollar
2007
636.45
496.89
Argentine peso per US dollar
3.45
3.15
Pound sterling per US dollar
0.69
0.50
Unidad de fomento per US dollar
0.03
Euro per dollar
0.71
Property, plants and equipment are shown at acqui-
production for the year and estimated reserves
sition costs. Investments in oil fields for develop-
(proved/developed) of crude oil and other hy-
ment and drilling are presented in Construction and
drocarbons, based on technical reports prepared
infrastructure.
by the Company’s personnel. Figures from these
0.03
Exploration investments consist of disbursements
specialists.
0.68
and contributions used to cover the acquisition
reports are periodically certified by independent
of assets, and/or the development of exploratory
Depreciation of marine oil and gas pipelines is cal-
f. Time deposits
wells. These costs are maintained as exploration in-
culated using the unit of production method, tak-
Time deposits reflect the principal invested plus
vestments until ENAP reaches a conclusion regard-
ing into account, the production of the year and
accrued interest and indexation at year-end.
ing the presence of hydrocarbons that would allow
reserves (proved/developed).
for recovery. Geological and geophys ical costs are
g. Marketable securities
charged directly to income.
m. Leased assets
Assets under financial leases are recorded simi-
Correspond to investments in units of fixed- in-
larly to acquisition of property, plant and equip-
come mutual funds valued at the unit value at
Costs and investments for successful explorations
year-end.
are transferred to oil fields and unsuccessful explo-
ment, recognizing the entire debt and interest
rations are charged to income.
on an accrual basis. Valuation and depreciation
h. Resale agreements
of these assets are calculated using general stan-
Investments acquired under resale agreements
Investments in oil fields undergo constant evalua-
dards applicable to property, plant and equip-
are recorded consistently with time deposits and
tions for future revenues. Where estimated future
ment. These assets are not legally the property
are presented in Other current assets.
cash flows are lower than the investments made,
of the Company and, therefore, cannot be freely
the latter are adjusted to the estimation of dis-
disposed of until the purchase options held by
counted future cash flows.
the Company are exercised.
for uncollectible accounts. The estimate has
Materials and spare parts included in property,
n. Investments in related companies
been calculated based on the aging of accounts
plant and equipment are shown under other
Investments made after January 1, 2004 are ac-
receivable.
property, plant and equipment at cost net of ob-
counted for using the methodology set forth in
i. Allowance for uncollectible accounts
Trade receivables are presented net of estimates
Technical Bulletin No. 72 of the Chilean Institute
solescence provision.
j. Inventories
of Accountants. Investments made before Janu-
Inventories of crude oil and finished products are
In accordance with accounting principles gener-
ary 1, 2004 were accounted for at their acquisi-
valued at their price- level restated acquisition or
ally accepted in Chile, the Company is periodically
tion date cost, recording the associated goodwill
INDEX
1 21
122
•
ANNUAL REPORT 2008
on the books on the acquiring entity and adjust-
o. Goodwill
ognized in income as the temporary differences
ing the investment each year for the acquiring
This relates to the difference between the ac-
are reversed.
entity's participation in earnings.
quisition cost of shares and their equity value at
purchase date. For shares acquired after in Janu-
s. Notes payable
This item includes, among other things, obligations
Investments in foreign companies and subsidiar-
ary 1, 2004, the goodwill relates to the difference
ies have been valued according to the standards
between acquisition cost of the shares and their
with confirmed payment to suppliers of crude oil
set forth in Technical Bulletin No. 64 of the Chil-
fair value at purchase date. Amortization periods
and other prod ucts, through financial institutions.
ean Institute of Accountants. These standards
are determined considering the expected return
and procedures require investments, in unstable
period of the investment.
t. Bonds payable
The bond principal obligations are shown in ac-
countries which are not an extension of the operations of the investor, to be accounted for in
p. Unearned income
cordance with the amounts payable committed,
US dollars, converting the financial statements
Unearned income corresponds to income re-
including principal and interest accrued as of
of the foreign company to Chilean GAAP and
ceived in advance from a usufruct contract
to the closing date of the financial statements.
charging or crediting currency translation ad-
signed. This income is amortized using the
The discount on bonds is capitalized and linearly
justments in other reserves in equity. This policy
straight- line method on an accrual basis.
amortized within the stipulated period of validity of the debt certificates and is shown in Other
was applied until December 2004.
q. Deferred credits’ costs
current assets and Other long-term assets, while
Investments in companies in which ENAP holds
Fees for loans are deferred and amortized over
charges to income are shown in financial expens-
less than a 20% stake and a significant influence
the term of the loans. They are presented in oth-
es in the statement of income.
are accounted for in accordance with the meth-
er current assets and others within the long-term
odology set forth in Technical Bulletin N°72 of
assets.
Bond issuance costs are capitalized and shown
vestment are recorded under the equity method
r. Income tax and deferred taxes
sets and are amortized using the straight- line
accounting.
The Company makes provisions for income tax
method over the term of the bonds. Amortiza-
on an accrual basis according to Chilean tax law.
tion charged to income is included in financial
ñ. Investments in other companies
The Company pays the First Category tax and an
expenses.
Investments in other companies are valued at
additional tax pursuant to Regulation No. 2 of
acquisition cost.
Decree Law No. 2,398.
According to Technical Bulleting Nº 72 of the
Deferred taxes derived from differences between
hedge operations for both expected transactions
Chilean Institute of Accountants, investments in
the financial and the tax balances are recognized
and existing items.
related companies which do not have the char-
for all temporary differenc es, taking into account
acteristics to be recorded according to their fair
the tax rate that will be effective at the estimat-
Hedge instruments of expected transactions
value, because the Company does not have con-
ed reversal date, following Technical Bulletin No.
are shown at fair value and the changes in such
in Other current assets and Other long-term as-
the Chilean Institute of Accountants. Such in-
u. Derivative contracts
The Company has derivative contracts which are
trol or significant influence, their cost ha s been
60 of the Chilean Institute of Accountants. The
value are recognized in asset or liability accounts
considered to be their last fair value prior to the
effects resulting from deferred taxes existing at
deferred until their maturity, when they are rec-
date of change in the valuation method, adding or
the date of applying the aforementioned techni-
ognized as other non-operating income or ex-
subtracting goodwill, if appropriate.
cal bulletin and not recognized before, are rec-
penses, as appropriate.
Hedge instruments of existing items are valued
tized over a maximum 4 year period. Implemen-
at fair value. The effect of such a valuation is rec-
tation costs are charged to income statements in
ognized in income in case of loss and is deferred
the same period of their acquisition.
•
ANNUAL REPORT 2008
NOTE 3 | ACCOUNTING CHANGES
The accounting principles discussed in Note 2
have been applied consistently as of December
in case of gain.
aa. Sale and leaseback agreement
31, 2008 with respect to the prior year, except for
v. Employee vacations
The Company signed a sale and financial lease-
the following changes:
The cost of employee vacations is recognized on
back agreement for the offices in the corporate
an accrual basis.
building, which is recorded maintaining such as-
a) Change of accounting principles::
sets under property, plants and equipment at the
Beginning on January 1, 2008 ENAP and subsid-
w. Employees’ benefits and compensations
same book value recorded before the transaction
iaries changed the methodology for calculating
The employees’ benefits and compensations pro-
and recording the funds obtained crediting in-
severance indemnities, switching from the cur-
vision covers obligations accrued due to disburse-
come on account of liability under capital leases,
rent value to the accrued value by adopting the
ments that the Company should pay out within a
which is shown as part of long-term liabilities ma-
methodology of the accrued cost of the benefit,
year, in accordance with the employees’ collective
turing within a year in current liabilities and long-
in accordance with Technical Bulletin No. 8 is-
bargaining agreements and current contracts.
term sundry creditors for the long-term portion.
sued by the Chilean Institute of Accountants. A
5.5% annual discount rate, the number of service
x. Severance indemnities
ab. Statement of cash flow
years with the company, and the age of the em-
Beginning on January 1, 2008, the severance in-
The Company has considered as cash and cash
ployees were all considered for this purpose.
demnity provision is recorded based on the pres-
equivalents any cash and short-term invest-
ent value of the accrued cost of the benefit, in
ments made as part of the Company’s normal
At the beginning of the year, the accumulated ef-
accordance with Technical Bulletin No. 8 issued
cash surplus management according to require-
fect of this change resulted in a decrease in the
by the Chilean Institute of Accountants. This
ments of Technical Bulletin N°50 of the Chilean
provision by ThUS$19,211 (Note 21) which was re-
provision is based on variables such as the num-
Institute of Accountants. Such amounts include
corded in "Other non-operating revenue" in the
ber of service years at the company, employee’s
cash, time deposits and marketable securities.
statement of income.
2007 this provision was recorded based on the
The concept “Cash flows from operating activi-
b) Change of accounting estimates:
current value.
ties” includes those cash flows related to busi-
As a consequence of technical reappraisals of
ness activities, including, in addition, interest
productive plants and fixed asset-storage plants
y. Operating income
paid, financial income and, in general, cash flows
associated with operations, ENAP and its subsid-
Operating income from the business is recorded
that are not included in cash flows from investing
iary Enap Refinerías S.A. modified the useful life
on an accrual basis. This income is recognized at
or financing activities. In addition, the operating
estimates for some of their fixed assets, due to
the time of the physical shipping of the products,
cash flow concept used in this statement of cash
revised time periods of expected revenue genera-
in conjunction with the transfer of their owner-
flows is broader than that used in the statement
tion. The change led to extending the useful life
ship and control.
of income.
age, and a 5.5% annual discount rate. During year
for some refining plants from 10 to 15 years, and
for some storage tanks from 15 to 20 years.
z. Computer software
The Company purchases its software in comput-
At December 31, 2008 this change resulted in de-
er packages, which are capitalized and are amor-
creased depreciation for the related fixed assets
by ThUS$36,149.
INDEX
123
12 4
•
ANNUAL REPORT 2008
NOTE 4 | CURRENT AND LONG-TERM RECEIVABLES
Current and long-term receivables are as follows:
Current and long-term receivables
Current
Up to 90 days
Trade accounts receivable
Allowance for doubtful accounts
Miscellaneous receivables
Total long - term receivables
2008
ThUS$
713,148
82,553
-
2007
ThUS$
977,373
99,073
-
More than 90 days up
to 1 year
2008
2007
ThUS$
ThUS$
821
815
-
Subtotal
ThUS$
713,148
282
83,374
1,000
Total current (net)
2008
ThUS$
712,866
82,374
-
Total long - term
2007
ThUS$
977,073
99,888
-
2008
ThUS$
21,012
21,012
2007
ThUS$
27,250
27,250
Miscellaneous receivables are mainly advances to suppliers and accounts receivable from employees on account of housing, medical and dental loans and
salary advances.
The detail of accounts receivables is as follows:
accounts receivables
Local
Distributors
Direct consumers
Foreign
Foreign receivables (1)
Total
2008
ThUS$
2007
%
2008
ThUS$
2007
%
500,857
66,765
70,26%
9,37%
794,225
53,807
81,28%
5,51%
145,244
712,866
20,37%
100.0%
129,041
977,073
13,21%
100.0%
(1) Foreign debtors correspond to accounts receivable from export products.
NOTE 5 | BALANCES AND TRANSACTIONS WITH
RELATED COMPANIES
In 2008 and 2007, the Company performed no
The balances and main transactions with related
in order to inform its transactions with related
significant transactions with A&C Pipeline Hold-
companies are as follows:
companies.
ing, Oleoducto Trasandino Argentina S.A.
The Company has set a materiality of ThUS$500,
•
ANNUAL REPORT 2008
Notes and accounts receivable
I.D.
Company
96694400-5
GAS DE CHILE S.A. (4)
78889940-8
NORGAS S.A. (1)
96856650-4
INNERGY HOLDING S.A. (4)
Short - term
December 31,
ThUS$
Long - term
December 31,
ThUS$
ThUS$
ThUS$
-
-
-
1,530
1,298
-
230
-
-
5
11,073
14,274
20,566
22,919
-
-
830
527
-
151
Foreign
PRIMAX S.A. (6)
99577350-3
EMPRESA NACIONAL DE GEOTERMIA. (1)
76418940-K
GNL CHILE S.A. (4) (11)
1,138
3,757
392
76788080-4
GNL QUINTERO S.A. (4) (11)
6,646
73,289
-
-
99519820-7
ENERGIA CON-CON S.A.(4)
-
11
-
-
78335760-7
PETROPOWER ENERGIA LTDA.
Total
16,587
-
-
-
47,297
101,806
11,465
14,655
DOCUMENTOS Y CUENTAS POR PAGAR
Short - term
Long - term
I.D.
Company
96668110-1
CIA. LATINOAMERICANA PETROLERA S.A. (2)
99519810-K
CIA. DE HIDROGENO DEL BÍO-BÍO S.A. (3)
78335760-7
PETROPOWER ENERGÍA LTDA. (5)
96913550-7
ETERES Y ALCOHOLES S.A. (3)
96969000-4
PETROSUL S.A. (3)
99548320-3
PRODUCTORA DE DIESEL S.A. (3)
96971330-6
GEOTERMICA DEL NORTE S.A. (8)
126
949
-
-
Foreign
PRIMAX S.A. (1)
1
-
-
-
96655490-8
OLEODUCTO TRASANDINO CHILE S.A. (10)
-
99548320-3
ENERGIA CONCON S.A.(3)
Total
ThUS$
ThUS$
ThUS$
-
-
3,686
ThUS$
4,720
2,268
2,123
36,156
38,511
138
809
-
-
2,077
1,766
22,210
24,287
1,848
1,717
25,394
27,241
12,367
10,313
93,511
102,943
6
-
-
1,740
-
434,700
-
20,571
17,677
615,657
197,702
(1) Balances of short-term receivables and payables corre-
ers' Agreement and the balance will be collected, once the
(8) Corresponds to capital contributions to be paid to Geo-
spond mainly to commercial operations that do not bear
project's financing process is concluded.
térmica del Norte S.A. (Note 10(5)).
interest or price- level restatement.
(5) The receivable balance from Petropower Energía Ltda.
(9) This is the invoicing for the reimbursement of expenses
(2) Corresponds to foreign currency (US dollars) repur-
relates to the withdrawals made by this investee at De-
incurred in repairing the MHC plant owned by PRODISA.
chase agreements entered into byinvestees and ENAP.
cember 31, 2008 which must be paid to Enap Refinerías S.A.
during 2009. Enap Refinerías S.A.’s short - term accounts
(10) The transaction with Oleoducto Trasandino Chile S.A.
(3) Corresponds to debt from the purchase of fixed assets
payable balance relates to the purchase of electric energy,
relates to the leasing of tanks and umps, payment of which
through a financial lease contracts entered into by Enap
steam and processing services, whose payment, according
is made 15 days after receipt of invoices.
Refinerías S.A. with Éteres y Alcoho les S.A., Petrosul S.A.,
to contract, is made 20 days after invoice date which oc-
Productora de Diesel S.A. and Cía. de Hidrógeno del Bío
curs twice a year in February and August.
(11) In accordance with a contract for the assignment of
rights entered into on April 30, 2008, GNL CHILE S.A. and
Bío S.A., whose maturity dates and general conditions are
described in notes 8 and 26.
(6) The receivable balance from Primax S.A. (a Peruvian
GNL QUINTERO S.A. agreed that GNL CHILE S.A. will set-
company) relates to operational products sold by Manu Perú
tle accounts with GNL QUINTERO S.A. by offsetting their
(4) Short-term and long-term receivables correspond to
S.A., a subsidiary of Enap Refinerías S.A.. The products are
debts to each other. This includes ENAP’s receivable bal-
future capital contributions to related companies that do
sold interest free on a 30-day credit from the invoice date.
ance from GNL CHILE S.A. in the amount of ThUS$1,631,
which is to be transferred to GNL QUINTERO S.A. for off-
not have a maturity date. In the case of GNL Quintero S.A.,
it corresponds to the transfer from current account, of
(7) Enap Refinerías S.A.’s transactions with Innergy Hold-
which a part will be capitalized according to the Sharehold-
ings S.A. consists of purchases of natural gas which must
be paid within 10 days after receipt of invoice.
INDEX
setting purposes.
1 25
126
•
ANNUAL REPORT 2008
Transactions
Year ended December 31
2008
Company
I.D.
Nature of
Type of transaction
relationship
2007
Amount
Effect on
Amount
Effect on
ThUS$
income
(charge)/credit
ThUS$
income
(charge)/credit
ThUS$
ETERES Y ALCOHOLES S.A. (3)
CÍA DE HIDROGENO DEL BIO BIO S.A. (3)
PETROSUL S.A. (3)
96913550-7
Investee
PAGO DE CUOTA LEASING
5.636
(3.962)
ThUS$
5.635
(4.196)
96913550-7
Investee
COMPRA DE SERVICIOS DE PROCESA
550
(550)
550
(550)
96913550-7
Investee
VENTA DE SERVICIOS DE PROCESAM
550
550
550
550
99519810-K
Investee
PAGO CUOTA DE LEASING
4.718
(2.543)
4.718
(2.676)
99519810-K
Investee
COMPRA DE SERVICIOS DE PROCESA
1.210
(1.210)
1.210
(1.210)
99519810-K
Investee
VENTA DE SERVICIOS DE PROCESAM
1.210
1.210
1.210
1.210
96969000-4
Investee
COMPRA DE SERVICIOS DE PROCESO
700
(700)
700
(700)
96969000-4
Investee
VENTA DE SERVICIOS DE PROCESA
700
700
700
700
96969000-4
Investee
PAGO DE CUOTA LEASING
3.646
(1.979)
3.646
(2.087)
401.720
8.471
304.266
14.029
11.783
-
10.600
-
PRIMAX S.A.
Foreing
Investee
VENTA DE PRODUCTOS
96856650-4
Investee
COMPRA DE GAS NATURAL
OLEODUCTO TRASANDINO CHILE S.A. (10)
96655490-8
Investee
COMPRA DE SERVICIOS
GNL CHILE S.A.
76418940-K
Investee
PRESTAMOS OTORGADOS
3.048
-
2.490
-
-
-
1.175
231
NORGAS S.A.
78889940-8
Investee
VENTA DE PRODUCTOS
46.865
(3.432)
28.463
PETROPOWER ENERGIA LTDA.
78335760-7
Investee
COMPRA DE SERVICIOS
62.036
-
40.390
-
GNL QUINTERO S.A.
76788080-4
Investee
PRESTAMOS OTORGADOS
65.022
-
73.289
-
76788080-4
Investee
VENTA DE TERRENO
PRODUCTORA DE DIESEL S.A. (3)(9)
99548320-3
Investee
PAGO CUOTA LEASING
99548320-3
Investee
ENERGIA CONCON S.A. (3)
-
-
4.550
4.099
11.972
(3.379)
12.012
(5.000)
SERVICIO DE MANTENCION
2.232
2.232
2.614
2.614
2.232
(2.232)
2.614
(2.614)
-
-
2.929
-
99548320-3
Investee
COMPRA DE SERVICIOS DE PROCESO
99548320-3
Investee
REEMBOLSO GASTOS
99519820-7
Investee
INTERESES DEVENGADOS LEASING
4.542
(4.542)
-
-
99519820-7
Investee
REEMBOLSO DE GASTOS FINANCIERO
9.805
(9.805)
-
-
NOTE 6 | INVENTORIES
The detail of inventories is as follows:
INVENTORIES
2008
ThUS$
2007
ThUS$
Crude oil
126,781
404,878
Crude oil in transit
109,214
281,440
Finished products
458,930
623,894
Finished products in transit
70,183
206,280
Materials in warehouse and in transit (net)
88,758
85,898
853,866
1,602,390
Total
At December 31, 2008, ENAP and the subsidiary Enap Refinerías S.A. recorded adjustments of ThUS$32,564 and ThUS$180,727, respectively, to adjust finished products and crude oil down to their respective realizable values, given that their production prices and purchase prices both exceeded their realizable values. These net adjustments are shown in inventory and charged to operating costs.
•
ANNUAL REPORT 2008
NOTE 7 | DEFERRED TAXES AND INCOME TAX
a. Deferred taxes
Accumulated balances for deferred taxes, at December 31, 2008 and 2007, are as fo llows:
Deferred taxes
2008
Items
Allowance for doubtful debts
Assets
Short-term
Long-term
ThUS$
ThUS$
2007
Assets
Liabilities
Short-term
Long-term
Short-term
Long-term
ThUS$
ThUS$
ThUS$
ThUS$
Liabilities
Short-term
Long-term
ThUS$
ThUS$
731
-
-
-
171
-
-
-
Unearned income
2,580
-
-
-
2,580
-
-
-
Employee vacation accrual
6,365
-
-
-
7,140
-
-
57
Leasing assets
-
-
-
122
-
-
-
Manufacturing expenses
-
-
1,473
-
-
-
1,237
-
Fixed assets depreciation
-
-
-
4,204
-
-
-
-
-
-
-
5,945
-
-
-
-
Other events
Severance indemnity
3,689
1,248
-
-
-
1,349
-
-
Unrealized profits on sale of crude oil
8,040
-
-
-
1,391
-
-
-
Obsolescence of material accrual (1)
-
4,736
-
-
-
4,899
-
-
Platform removal and normalization of oil
wells' provision (1)
-
29,534
-
-
-
32,483
-
-
Leasing agreements
-
7,991
-
1,138
-
7,035
-
-
Deferred financial expenses
-
-
-
3,776
-
-
-
4,766
Bonds issuance cost
-
-
-
1,846
-
-
-
2,588
Deferred credits cost
-
-
-
1,366
-
-
-
2,404
Investment valuation provision
-
6,286
-
-
-
8,136
-
-
Prepaid expenses
-
-
481
-
-
-
529
-
Recovered taxes
-
-
-
-
-
-
14,928
-
Derivatives contracts
-
20,985
-
-
-
-
-
-
Colombia liability accrual
Tax loss
-
200
-
-
-
199
-
-
2,509
74,964
-
-
801
-
-
-
Environmental provision
3,060
-
-
-
85
-
-
-
Overstay provision
1,878
-
-
-
25
-
-
-
-
5,272
-
520
-
5,044
472
-
1,366
-
-
-
-
-
-
-
Provision for adjustment of products to
market price
49,286
-
-
-
-
-
-
-
Shortages of crude and products
Total deferred taxes
4,743
84,247
151,216
1,954
18,917
12,193
59,145
17,166
9,815
-
(15,315)
-
-
-
(15,428)
-
-
84,247
(90,168 )
45,733
1,954
18,917
12,193
(17,321)
26,396
17,166
9,815
Provision of costs for CEOP's participation
Supplementary accounts - net of amortization
Valuation allowance
TotaL
(1) The balance of complementary accounts related to the obsolescence provision of supplies and withdrawal of oil rigs is amortized upon the reversal of the corresponding
temporary difference.
INDEX
1 27
128
•
ANNUAL REPORT 2008
b. Income tax
The detail of the (asset) liability arising from income tax is as follows:
Income tax
Income tax provision (recoverable taxes)
Current
2008
ThUS$
Long-term
2007
ThUS$
2008
ThUS$
2007
ThUS$
Provisiones de impuestos a la renta al 31 de diciembre:
- 17% of first category
-
0
20,858
-
-
2,545
4,764
-
-
-
-
5,015
11,914
(92,402)
-
-
-
25,132
23,045
-
-
(13,122)
62,140
5,015
11,914
-
3,351
-
114,445
(13,122)
65,491
5,015
126,359
- Estimated monthly payments of the year
(35,086)
(91,693)
-
-
- Prepayment of foreign taxes
(16,625)
(18,464)
-
-
- Credit for training expenses
(944)
(739)
-
-
(65,777)
(45,405)
5,015
126,359
- Single tax
- 40% Decree Law 2,398 on Enap's earnings
- 40% Decree Law 2,398 on earnings from investees (1)
- 40% Decree Law 2,398 on earnings from subsidiaries (1) (3)
- Income tax refund from tax loss carryback
- Impuestos provenientes del exterior
Tax on subsidiaries abroad
Total charge for taxes for the year
Total
15,034
12,185
1,195
1,288
35,374
Less:
Net balances (recoverable) payable (2)
Taxes arising from foreign operations comprise income taxes in Argentina, Ecuador, Uruguay and Perú, and taxes on gross revenues in accordance with the laws of each
country.
Enap Sipetrol S.A. has not accrued any provision for income tax in Chile, even when there are tax profits at December 31, 2008 amounting to ThUS$60,094 (a MUS$15,410 tax
loss at December 31, 2007), this income was compensated by tax credits generated by overseas agencies.
(1) Decree Law 2,398 establishes a tax rate of 40% for dividends received by the Company from subsidiaries and affiliates. ENAP provides such tax based on estimated profit
distributions.
(2) At December 31, 2008, this balance includes recoverable taxes by ERSA for ThUS$ 120,965 and taxes payable by ENAP and Enap Sipetrol for ThUS$43,065 and ThUS$12,123,
respectively; at December 2007, the balance includes recoverable taxes by ERSA for ThUS$ 85,186 and taxes payable by ENAP and Enap Sipetrol for ThUS$ 35,088 and
ThUS$4,693, respectively.
(3) In accordance with Ordinance N°602 issued on June 30, 2008 by the Finance Ministry, which authorized the capitalization of retained earnings in Enap Refinerias S.A. and
in Enap Sipetrol S.A., the Company reversed the “Prior year tax provision balance” which amounted to ThUS$126,359.
•
ANNUAL REPORT 2008
The long-term payable portion is in the Long-term provisions (Note 17).
Details of recoverable taxes in Current Assets as of December 31, 2008 and 2007 are as follows:
2008
ThUS$
2007
ThUS$
65,777
45,405
Oil Stabilization Fund Credit Laws 20,063; 20,115; 20,197; (3)
2,082
101,624
Refundable Customs Duties - Chile
4,291
16,492
Refundable Customs Duties - Abroad
1,365
-
88,923
85,393
Refundable VAT - Abroad
6,537
7,563
Specific tax on gasoline and diesel fuel
6,581
9,054
-
26,189
1,709
1,704
55,058
13,095
232,323
306,519
Refundable income tax for the period
Refundable VAT - Chile
Refundable tax
Advances of refundable tax - Abroad
Other refundable taxes
Total
INDEX
1 29
13 0
•
ANNUAL REPORT 2008
c. Expense for income tax
The charge for income tax is as follows:
Expense for income tax
Item
Current tax expense (tax provision)
Effect of assets or liabilities due to deferred taxes of the year
Tax benefits due to tax losses
Effect of amortization of complementary accounts of deferred tax assets and liabilities
Effect of assets or liabilities for deferred taxes due to changes in the valuation allowance
Other charges or credits to the account
Total
2008
ThUS$
33,239
92,762
77,473
114
2007
ThUS$
(51,009)
(7,015)
(62)
(72,847)
92,204
222,945
(6,633)
(23,045)
(87,764)
Other charges or credits to the account - In accordance with Ordinance No. 602 issued on June 30, 2008 by the Finance Ministry, which authorized the
capitalization of retained earnings in Enap Refinerías S.A. and in Enap Sipetrol S.A., the Company reversed the “Prior year tax provision balance” which
amounted to ThUS$126,359. In addition, the amount of ThUS$9,022 was charged, for the income tax paid in the reliquidation associated with the recovery
of the Stamp Tax. Also included is the income tax charged abroad, amounting to ThUS$25,132 (ThUS$23,045 in 2007).
The effect on earnings for income tax and deferred tax, taking into account the First Category Tax rate established in the “Ley de Impuesto a la Renta” (the
Income Tax Law) and the tax rate included in Regulation N°2 of Decree Law N°2398 is as follows:
Expense for income tax
2008
ThUS$
(1,181,174)
58,434
2007
ThUS$
137,404
(3,164)
Income tax (17% rate)
74,677
(12,185)
Article 21 single tax
(1,195)
(1,288)
(25,132)
(23,045)
(1,074,390)
97,722
Deferred tax (40% rate)
39,068
(10,546)
77,093
(37,536)
(958,229)
49,640
(Loss) income before deferred income taxes including (deferred taxes)
Tax on subsidiaries abroad
(Loss) income before income tax and deferred taxes according to article N°2 of D.L. N°2398
(Loss) income before minority interest and amortization of negative goodwill
•
ANNUAL REPORT 2008
NOTE 8 | PROPERTY, PLANTS AND EQUIPMENT
Property, plants and equipment and their respective accumulated depreciation are as follows:
2008
Land
Total
2007
Gross
balance
ThUS$
21,042
Accumulated
depreciation
ThUS$
-
Net
balance
ThUS$
21,042
Saldo
bruto
ThUS$
16,154
Accumulated
depreciation
ThUS$
-
Net
balance
ThUS$
16,154
4,493,873
(2,992,753)
1,501,120
4,314,586
(2,872,484)
1,442,102
75,758
(48,015)
27,743
70,666
(43,579)
27,087
827,560
(106,972)
720,588
395,533
(86,820)
308,713
5,418,233
(3,147,740)
2,270,493
4,796,939
(3,002,883)
1,794,056
The detail of construction and infrastructure is as follows:
Oil fields
Oil rigs
Investment - exploration projects
Refineries and fuel plants
Oil and gas pipelines
Maritime facilities and storage plants
2008
ThUS$
1,610,291
705,313
95,822
1,252,499
312,429
2007
ThUS$
1,623,267
690,904
109,750
1,119,650
296,066
50,210
50,061
Production facilities
15,382
12,459
Reinjection systems
116,370
115,435
63,128
60,653
Buildings, settlements and camps3
Construction in progress
Total
Net value
INDEX
272,429
236,341
4,493,873
4,314,586
(2,992,753)
(2,872,484)
1,501,120
1,442,102
131
132
•
ANNUAL REPORT 2008
The oil field investments made by the Enap Sipetrol S.A. subsidiary are shown net of the following provisions:
Impairment CAM 2A Sur - Argentina
2008
ThUS$
12,217
2007
ThUS$
8,258
TotaL
12,217
8,258
The detail of other property, plants and equipment is as follows:
OTROS ACTIVOS FIJOS
Furniture, office equipment and tools
Leased assets (1)
Materials in warehouses (2)
Software
Other assets
Total
Net value
2008
ThUS$
4,654
2007
ThUS$
4,622
700,501
268,601
98,915
97,856
3,094
7,163
20,396
17,291
827,560
395,533
(106,972)
(86,820)
720,588
308,713
(1) This item includes corporate offices acquired through lease contracts with a call option with Banco Santander Chile. At December 31, 2008, the net value is ThUS$15,350
(ThUS$ 15,672 in 2007). This contract has monthly installments and ends in August 2018.
On July 19, 1994, Enap Sipetrol S.A. entered into a leasing agreement with Compañía de Seguros de Vida Santander S.A., currently Metlife Chile Seguros de Vida S.A., for the
offices N°s.401, 402 and 501, 5 warehouses and 27 parking spaces in the building located in Avenida Tajamar No. 183, Las Condes district, in Santiago. The agreement is for a
240 months term expiring on July 11, 2014.
The obligation for this contract is included in Current liabilities in the Long-term liabilities with maturities within a year account for ThUS$191 (ThUS$207 in 2007) and
in Long-term liabilities in Long-term sundry creditors’ accounts for ThUS$1,098 (ThUS$1,511 in 2007).
Enap Refinerías S.A., includes in this item the Mild Hydrocracking (MHC) Gasoil plant, the Hydrogen plant, the DIPE plant and the two sulfur plants, generating obligations,
which are reflected net of unaccrued interest, under the item Notes and accounts payable to related companies in current liabilities and long-term liabilities. The contracts
have the following terms: up to 2017 with Éteres y Alcoho les S.A., up to 2019 with Petrosul S.A., and up to 2020 with Productora de Diesel S.A. and Compañía de Hidrógeno
del Bío Bío S.A.
In 2008, the subsidiary Enap Refinerías S.A. incorporated under financial leases, several plants for a total of ThUS$431,899, which are a part of the Coker complex in Refinería
Aconcagua.
(2) Warehouse materials for fixed assets are shown net of obsolescence provision for ThUS$7,986 in 2008 (ThUS$8,641 in 2007).
•
ANNUAL REPORT 2008
The charge to income for depreciation of property, plant and equipment included in operating cost of sales and selling and administrative expenses is
as follows:
2008
ThUS$
231,237
1,963
233,200
Operating costs
Administrative expenses
Totales
2007
ThUS$
229,158
1,426
230,584
NOTE 9 | SALE AND LEASEBACK AGREEMENT
On October 28, 2005 the Company signed a sale and leaseback agreement for the offices in the corporate building for UF 498,165.17. This agreement is
denominated in UF (inflation - indexed unit of account), maturing within 154 months and at an annual interest rate of 3.6871%.
The obligation for this contract are included in current liabilities for ThUS$1,172 (ThUS$1,323 in 2007) and in long-term liabilities in the miscellaneous payable account for ThUS$12,182 (ThUS$15,645 in 2007)
INDEX
133
CHILE
ARGENTINA
COMPAÑÍA DE HIDROGENO DEL BIO-BIO S.A. (1)
COMPAÑIA LATINOAMERICANA PETROLERA S.A.
EMPRESA NACIONAL DE GEOTERMIA S.A.(1)
ENERCON S.A. (1)
ENERGÍA ANDINA S.A. (10)
ETERES Y ALCOHOLES S.A.
FORENERGY (1)
GAS DE CHILE S.A.
GEOTERMICA DEL NORTE S.A. (5) (9)
GNL CHILE S.A.(1) (2) (8)
GNL QUINTERO S.A.(1) (3) (7)
NORGAS S.A.
96668110-1
99577350-3
99519820-7
76039634-6
96913550-7
76932370-8
96694400-5
96971330-6
76418940-K
76788080-4
96856650-4
78889940-8
PETROSUL S.A.
PRIMAX S.A. (1)
PRIMAX HOLDINGS S.A. (ECUADOR) (1)
GOLFO DE GUAYAQUIL PETROENAP COMPAÑIA DE ECONOMIA MIXTA (12) ECUADOR
PRODUCTORA DIESEL S.A. (1)
96969000-4
Foreign
Foreign
Foreign
99548320-3
TOTAL
PETROPOWER ENERGIA LTDA
78335760-7
CHILE
ECUADOR
PERU
CHILE
CHILE
CHILE
OLEODUCTO TRASANDINO (ARGENTINA) S.A. (4) (11)
OLEODUCTO TRASANDINO (CHILE) S.A. (4)
Foreign
96655490-8
CHILE
CHILE
CHILE
CHILE
CHILE
CHILE
CHILE
CHILE
CHILE
CHILE
CHILE
CHILE
I.CAYMAN
A&C PIPELINE HOLDING (4)
99519810-K
US$
US$
US$
US$
US$
US$
PESO
US$
PESO
PESO
US$
US$
PESO
PESO
PESO
US$
US$
US$
PESO
PESO
US$
US$
investment
origin
Foreign
Currency of
Country of
9,989,940,00
40,00
392
86,466,630
4,739
-
6,225,293
27,206,350
420,000
16,247,025
200
4,000,000
6,809,098,842
2,973,170
120
4,174
6,000,000
494,896
1,539,865
44,224
100,000
326,250
shares
Number of
45,00
40,00
49,00
49,00
47,39
15,00
35,83
35,93
42,00
25,00
20,00
33,33
45,37
50,00
40,00
41,74
40,00
49,00
49,00
40,00
10,00
36,25
%
2008
45,00
-
49,00
49,00
47,39
15,00
35,83
35,93
42,00
25,00
20,00
33,33
45,37
50,00
40,00
41,74
-
49,00
49,00
40,00
10,00
36,25
%
2007
13,029
100
63
66,704
13,246
64,966
8,051
13,287
4,866
-28,548
192,688
-3,527
18,166
554
508
14,137
14,928
30,179
1,244
9,166
10,792
466
ThUS$
2008
10,996
-
-1,385
65,956
12,850
93,284
9,512
24,517
7,378
-18,259
16,000
-3,439
4,591
61
75
12,237
-
27,028
3,152
12,137
10,364
467
ThUS$
2007
ownership
2,033
-
1,546
16,524
816
38,856
-270
-516
533
-35,203
-1,714
-3,088
-1,784
-5
-77
1,900
-72
959
-1,436
-713
1,948
-
ThUS$
2008
2,232
-
-374
11,808
809
30,263
-563
-713
2,713
-24,730
-1,480
-830
-1,704
-
-
1,876
-
1,305
-1,535
-992
2,080
-
ThUS$
2007
13,029
100
63
66,704
-
-
24,141
4,871
-
-
192,688
-3,527
-
-
508
-
14,928
30,179
1,244
-
10,792
-
ThUS$
2008
10,996
-
-1,385
65,956
-
-
2007
-
-
-
-
-
-
-1,480
-830
-
-
-
-
-
1,305
-1,535
-
2,080
-
ThUS$
2,033
-
1,546
2,232
-
-374
16,524 11,808
-
-
-
-
4,871
24,766
-
2
-1,714
-3,088
-
-
-77
-
-72
959
-1,436
-
1,948
-
ThUS$
2008
at fair value
year
Income for the
-
-
16,000
-3,439
-
-
75
-
-
27,028
3,152
-
10,364
-
ThUS$
2007
at fair value
the year
Equity of
companies
Income
(loss) for
915
-
757
8,097
387
5,828
-49
-93
224
-8,801
-343
-1,029
-810
-2
-31
794
-29
470
-704
-286
194
-
ThUS$
2008
1,004
-
-183
5,786
384
4,540
-102
-129
1,139
-6,183
-296
-277
-772
-
-
784
-
639
-752
-397
208
-
ThUS$
2007
income
Accrued
2007
2008
2007
income
Unrealized
4,948
103.093
146.724
-
1
32,318
6,090
13,992
6,122
5,304
3,099
1
3,200
1
2,083
31
30
5,108
-
13,244
1,545
4,855
1,036
85
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
ThUS$ ThUS$ ThUS$
5,863
40
31
32,685
6,278
9,745
5,901
4,776
2,044
1
38,538
1
8,242
277
203
5,900
5,971
14,787
610
3,666
1,080
85
ThUS$
2008
VP / VPP
146.724
5,863
40
31
32,685
6,278
9,745
5,901
4,776
2,044
1
38,538
1
8,242
277
203
5,900
5,971
14,787
610
3,666
1,080
85
ThUS$
2008
103.093
4,948
-
1
32,318
6,090
13,992
6,122
5,304
3,099
1
3,200
1
2,083
31
30
5,108
-
13,244
1,545
4,855
1,036
85
ThUS$
2007
investment
of the
Book value
•
Company
Equity of
companies
Percentage of
I.D.
INVESTMENTS IN RELATED COMPANIES
Investments in related companies are as follows:
NOTE 10 | INVESTMENTS IN RELATED COMPANIES
134
ANNUAL REPORT 2008
•
ANNUAL REPORT 2008
(1) The assets and liabilities of Primax S.A., Primax Hold-
(6) At the Extraordinary General Meeting of Share-
6,000,000 shares, which correspond to 40% of this
ings S.A., Energía Concón S.A., Productora de Diesel
holders of Innergy Holdings S.A., held on January 8,
company’s capital.
S.A., Cía. de Hidrógeno del Bío Bío S.A., Empresa Nacio-
2008, a corporate capital increase was agreed on,
nal de Geotermia S.A., GNL Chile S.A., GNL Quintero
divided into 54,723,148 shares, to 57,964,065 shares.
(11) In September 2008, Oleoducto Trasandino (Argen-
S.A. and Forenergy S.A. were valued at its fair value,
ENAP committed to subscribe and pay in 810,229 of
tina) S.A. capitalized Ordinary and Preferred Capital
according to the methodology established in Technical
these shares, which were considered fully paid in by
adjustments and reduced the Preferred Capital by
Bulletin N°72 of the Chilean Institute of Accountants
capitalizing the current account associated with the
ThUS$10,714(Th$33,000 Argentine pesos), causing a
and Circular Nº 1,697 and Nº 1,699 of the Superin-
cash calls of November and December of 2007 and the
change in the number of shares in OTA S.A., diminish-
tendence of Securities and Insurance. This valuation
balance was paid through the contributions made in
ing its interest to 35.79%.
showed no significant differences with book values.
January and February of 2008.
(12) On September 15, 2008, the company Golfo
(2) In an Extraordinary Shareholders Meeting held on
At the Extraordinary General Meeting of Sharehold-
de Guayaquil Petroenap Compañía de Economía
August 2, 2006, GNL Chile S.A increased its Paid - in
ers of Innergy Holdings S.A., held on March 10, 2008,
Mixta was formed in the city of Quito (the capital of
Capital in 2,000,000 shares, equivalent to 2,000,000
a corporate Paid - in Capital was agreed on of up to
Ecuador). The Company’s corporate capital amounts
pesos; Empresa Nacional del Petróleo subscribed and
72,152,772 shares. ENAP subscribed 3,547,177 of those
to ThUS$100 and is divided into 100 equal ordinary
paid on April 2007, 666,667 Shares, maintaining its
shares, and to date ENAP has paid in 646,188 of them.
and nominative shares worth ThUS$1 each. The parent
company, Enap Sipetrol S.A., through its branch in
33.33333% ownership interest.
(7) At the Extraordinary General Meet ing of Share-
Ecuador, has subscribed 40 “B” type shares, which
(3) On March 9, 2007, GNL Quintero S.A. was consti-
holders of GNL Quintero S.A., held on July 15, 2008, a
represent 40% of the capital of this company.
tuted, of which ENAP subscribed and paid 200 shares,
corporate paid- in capital was agreed on to be execut-
which represents a 20% of total company’s capital.
ed through the capitalization of accounts receivable
held by the shareholders against the company.
(4) On December 10, 2007, Empresa Nacional del
ENAP contributed ThUS$35,680.
Petróleo purchased shares of Oleoducto Trasandino
(Chile) S.A., Oleoducto Trasandino (Argentina) S.A.
and A&C Pipeline Holding, increasing its ownership
holders of GNL Chile S.A., held on August 20, 2008, a
interest to 35.83%, 35.93% and 36.25%, respectively.
corporate Paid - in Capital was agreed on to be executed through the capitalization of accounts receivable
These purchases were valued at fair value, according
held by the shareholders against the company.
to the methodology established in Technical Bulletin
ENAP contributed ThUS$1,000.
N°72 of the Chilean Institute of Accountants and
Circular Nº 1697 and Nº 1699 of the Superintendence
(9) At the Extraordinary Meeting of Shareholders of
of Securities and Insurance.
Geotérmica del Norte S.A., held on August 28, 2008,
the corporate capital was increased by 8,543,623,042
(5) At the Sixth Extraordinary Shareholders Meeting
shares. ENAP subscribed and paid in 4,186,374,913
of Geotérmica del Norte S.A., held on July 3, 2007 a
shares.
Paid - in Capital for the company was approved. ENAP
subscribed 671,555,929 Series A or ordinary shares,
(10) The company Energía Andina S.A. was formed
representing the capital increase agreed - on during
on October 20, 2008. ENAP subscribed and paid
in this meeting, for a total price of Ch$731,728,333
(US$1,388,847.96).
INDEX
INFORMATION ON FOREIGN INVESTMENTS:
As of December 31 2008, and 2007, there are no
dividends for potential profit remittances, from
investments that the Company and its Subsidiaries maintain abroad.
During 2008, 2007, the Company and its subsidiaries have not undertaken on liabilities for
hedging these investments abroad.
135
13 6
•
ANNUAL REPORT 2008
NOTE 11 | INVESTMENTS IN OTHER COMPANIES
In May 2006, ENAP, in accordance with Technical Bulletin Nº 72 of the Chilean Institute of Accountants, reclassified from Investments in related companies
to Investments in other companies, the following investments: Gasoducto del Pacífico (Chile) S.A., Gasoducto del Pacífico (Argentina) S. A., Gasoducto
Cayman Ltd., Sociedad Nacional de Oleoducto S.A., Sociedad Nacional Marítima S.A., Inversiones Electrogas S.A., Electrogas S.A. and in September 2006,
Terminales Marítimas Patagónicas S.A.
INVESTMENTS IN OTHER COMPANIES
Percentage
Tax I.D. N°
Company
96806130-5
ELECTROGAS S.A.
Book value of investment
Number
of shares
of ownership
%
2008
ThUS$
2007
ThUS$
30
0,0076
2
2
Foreign
GASODUCTO CAYMAN LTD.
9,100
18,20
5
5
Foreign
GASODUCTO DEL PACIFICO (ARGENTINA) S.A.
15,900,586
18,20
14,051
14,051
38,592,313
18,20
20,217
20,217
150
15,00
5,130
5,130
96762250-8
GASODUCTO DEL PACIFICO (CHILE) S.A.
96889570-2
INVERSIONES ELECTROGAS S.A.
81095400-0
SOCIEDAD NACIONAL DE OLEODUCTOS S.A.
10,061,279
10,06
12,705
12,705
12,965,340
12,97
1,668
1,668
69
-
6
8
198,025
13,79
76384550-8
SOCIEDAD NACIONAL MARITIMA S.A.
70036600-6
ASOCIACION GREMIAL DE INDUSTRIALES QUIMICOS A.G.
Foreign
TERMINALES MARÍTIMAS PATAGONICAS S.A.
TotaL
7,664
7,664
61,448
61,450
NOTE 12 | GOODWILL AND NEGATIVE GOODWILL
The detail of goodwill is as follows:
goodwill
December 31,
Tax I.D. N°
Foreign
Total
Company
PRIMAX S.A.
2008
Amount amortized
in the year
Goodwill
2007
Amount amortized
in the year
Goodwill
ThUS$
1,912
1,912
ThUS$
2,670
2,670
ThUS$
1,154
1,154
ThUS$
4,582
4,582
The goodwill in Primax S.A., a company related to the subsidiary Enap Refinerías S.A. (ERSA), relates to the difference between the acquisition value of
shares in Primax S.A. and the fair value of those shares on the date they were purchased in 2004 by Manu Perú Holding S.A., a subsidiary of ERSA. The
amortization term is determined based on the expected period of the return on the investment. The amortization period was determined to be 8 years as
of 2008 (8 years in 2007).
•
ANNUAL REPORT 2008
NOTE 13 | OTHER ASSETS
The detail of other long-term other assets is as follows:
other long-term other assets
Deferred credit costs
2008
ThUS$
1,825
2007
ThUS$
2,397
Expenses for issue of bonds and discount in placement (Note 23)
7,472
10,366
Low turnover operating materials (1)
3,845
5,122
47,057
17,342
226
3,741
Interest rate swaps deferred loss (Note 25)
Cross currency swap on leasing fees (Note 25)
Cross currency swap on bonds fees (Note 25)
-
58,324
Other
350
350
Total
60,775
97,642
(1) Low turnover operating materials are stated net of obsolescence provision of ThUS$5,700 as of December 31, 2008 (ThUS$4,423 in 2007).
NOTE 14: LIABILITIES WITH BANKS AND FINANCIAL INSTITUTIONS - SHORT-TERM
The detail of short-term liabilities with banks and financial institutions and of long - term liabilities with banks and financial institutions, short - term portion, is as
follows:
short-term liabilities
Currency US Dollar
I.D.
Bank or financial institution
Foreign
ABN AMRO BANK N.V. (4) (6)
Foreign
CALYON (4)
Foreign
BNP PARIBAS (4)
Foreign
HSBC (4)
Foreign
JP MORGAN (4)
Foreign
BBVA BANCO FRANCES S.A. (5)
Foreign
SCOTIABANK(4)
Foreign
BANCO ITAU ARGENTINA S.A.(7)
Total
Principal outstanding
Annual average interest rate (%)
Other foreign currency
Total
2008
ThUS$
2007
ThUS$
2008
ThUS$
2007
ThUS$
2008
ThUS$
2007
ThUS$
196.696
101.198
101.850
145.181
46.317
45.068
636.310
629.792
5,46%
40.529
40.529
40.000
7,45%
3.662
4.641
8.303
8.303
-
196.696
101.198
101.850
145.181
49.979
45.068
4.641
644.613
638.095
40.529
40.529
40.000
INDEX
-
137
1 38
•
ANNUAL REPORT 2008
Long - term - current portion
Currency US Dollar
I.D.
Foreign
J.P MORGAN CHASE BANK (1)
Foreign
CALYON N.Y. BRANCH (2)
Foreign
J.P MORGAN AGENCIADO (3)
Total
% Liabilities in foreign currency
Other foreign currency
Total
2008
ThUS$
2007
ThUS$
2008
ThUS$
2007
ThUS$
2,233
4,132
2,233
4,132
149
383
149
383
-
21,044
-
21,044
2,382
25,559
2,382
25,559
-
21,000
-
21,000
3.02%
5.74%
100.00%
% Liabilities in local currency
0.00%
(1) J.P. Morgan Chase Bank:
amortized in 6 equal installments, the first due on June 14, 2011.
On July 15, 2008, Enap Sipetrol Argentina S.A. obtained loans for
On June 15, 2006, ENAP refinanced 220 million dollars of the
The annual interest rate applied to the operation is LIBOR+0.175%
ThUS$30,000 and ThUS$9,000 with principal and interest payable
Syndicated loan, with effective date as of September 5, 2006.
for the first three years, LIBOR+0.20% for years four and five and
upon maturity on January 20, 2009 at a nominal annual interest
Through this operation, ENAP signed a contract with fifteen
LIBOR+ 0.225% for years six and seven.
rate of 6.35%. As of the date of the issuance of these financial
statements, the loan had been repaid.
international banks under the laws of New York called Second
Amended and Restated Term Loan Agreement that modifies the
(3) J.P. Morgan Chase Bank Syndicated:
After repaying the abovementioned loans, Enap Sipetrol Argen-
August 31, 2004 credit contract, which modified a previous Au-
On December 18, 2003, Enap Sipetrol Argentina S.A. obtained
tina S.A. obtained, on January 20, 2009, a loan for ThUS$45,000
gust 29, 2003, contract. The current modification refers to: (i) the
a US$125,000,000 5- year term syndicated loan, with monthly
with principal and interest payable upon maturity on July 20,
consolidation of principal due from 2007 to 2009 of the current
principal and interest payments. It was guaranteed by petroleum
2009 at an annual interest rate of 8%, plus a direct commission of
loan’s two existing tranches (Tranche 1 and Tranche 2), and (ii) the
and gas exports from the Cuenca Austral and with a contingent
0.775% basis points and a fixed 0.2% management commission.
modification of principal maturity dates into a 7 year term single
guarantee from ENAP. This loan was syndicated by JP Morgan
On July 16, and August 31, 2007, Enap Sipetrol Argentina S.A.
payment ("bullet"), with maturity date September 2013.
Chase Bank, and 10 foreign banks participated. The agreed interest
obtained ThUS$30,000 and ThUS$10,000 one-year term loans
The interest rate applied to the operation was LIBOR+0.20%
rate is LIBOR + 0.75% annual spread. This loan with J.P. Morgan
respectively, with principal payable upon maturity and interest
for the first four years, LIBOR+0.225% for years five and six and
ended on December 18, 2008.
payable on a quarterly basis . The nominal annual interest rate
was 7.45%. Both loans were repaid on July 15, 2008.
LIBOR+0.25% for year seven.
The change in the loan’s term, which originally included amortiza-
(4) As of December, 2008, ENAP holds short-term loans totaling
tions between 2006 and 2009, meant freeing funds to finance
US$579.84 million with tenors ranging from 120 to 180 days. The
(6)ABN AMRO BANK NV
ENAP investments for the coming years. The interest rate
short-term loans were undertaken with Scotiabank, JP Morgan,
On July 15, 2008, Enap Sipetrol Argentina S.A. obtained a loan
spread remains practically unaltered regarding the original loan
ABN AMRO Bank N.V., Calyon, and BNP Parib as, at annual rates
for ThUS$10,000 from ABN AMRO BANK N.V. with principal and
(LIBOR+0.20% between 2008 and 2006 and LIBOR+0.225% in
ranging from 3.65% to 6.8%.
interest payable upon maturity at an interest rate of LIBOR + 2.2%
2009). Since it is a refinancing of liabilities, this transaction did
In addition, ENAP has overdraft lines of credit available for US$60
semiannually. This loan was repaid on January 12, 2008.
not affect ENAP’s debt level.
million. As of December 31, 2008, US$10.7 million had been drawn.
(2)CALYON NEW YORK BRANCH
(5) BBVA Banco Francés S.A.
The balance shown at the close of the financial statements includes
In December 2006, the Company obtained a US$150,000,000
The Argentine peso balance equivalent to ThUS$3,662 relates to the
ThUS$4,641 relating to the use of a credit facility.
syndicated loan from a group of banks, with Calyon Bank New
use of a line of credit by Enap Sipetrol Argentina S.A.. On July 21,
On January 16, 2009, Enap Sipetrol Argentina S.A. obtained a loan
York Branch as agent.
2008, Enap Sipetrol Argentina S.A. obtained a loan for ThUS$6,000
for ThUS$10,000 with principal and interest payable upon maturity
Through this operation, ENAP signed a syndicated loan contract
with principal and interest payable upon maturity on January 19,
on April 16, 2009 at an annual fixed interest rate of 8.6%.
with 12 international banks under the laws of New York (called
2009 at an annual interest rate of 6.35%. As of the date of the issu-
Term Loan Agreement). The loan has a 7-year term and will be
ance of these financial statements, the loan had been repaid.
(7) BANCO ITAU ARGENTINA S.A.
•
ANNUAL REPORT 2008
NOTE 15 | LIABILITIES WITH BANKS AND FINANCIAL INSTITUTIONS - LONG-TERM
The detail of long-term liabilities with banks and financial institutions is as follows:
long-term liabilities with banks and financial institutions
Years to maturity
I.D.
Bank or Financial Institution
Currency or
indexation
Foreign
J.P. MORGAN CHASE BANK (1)
US$
Foreign
CALYON N.Y. BRANCH (2)
US$
Total
More than 1 More than
Up to 2 2 Up to 3
ThUS$
ThUS$
-
% Liabilities in foreign currency
100%
% Liabilities in local currency
0.00%
More than
3 Up to 5
ThUS$
220,000
More than
5 Up to 10
ThUS$
-
Total
long-term
ThUS$
220,000
50,000
100,000
-
150,000
50,000
320,000
-
370,000
See explanation for references (1) and (2) of the chart in Note 14.
NOTE 16 | BONDS PAYABLE
The detail and maturities of bonds payable is as follows:
BONDS PAYABLE
Timing
Registration number instrument or
Series
identification
Nominal amount
Readjustement
Interest
Final period
Payment of
loan current
Unit bond
rate
interests
Par value
Repayments
Placement
2008
2007
local/
ThUS$
ThUS$
foreign
Long-term bonds - current portion
Nº 303
A-1
1,000,000
UF
4.25%
01/10/2012 Semi-annually
At maturity
358
429
Nº 303
A-2
2,250,000
UF
4.25%
At maturity
806
965
Local
Type 144-A
Single
290,000,000
US$
6.75%
At maturity
2,528
2,528
Foreign
Type 144-A
Single
150,000,000
US$
4.875%
At maturity
Foreign
Total current portion
2,174
2,161
5,866
6,083
Local
Long term bonds
Nº 303
A-1
1,000,000
UF
4.25%
At maturity
33,706
39,491
Nº 303
A-2
2,250,000
UF
4.25%
At maturity
75,840
88,855
Local
Type 144-A
Single
290,000,000
US$
6.75%
At maturity
290,000
290,000
Foreign
Type 144-A
Single
150,000,000
US$
4.875%
At maturity
150,000
150,000
Foreign
549,546
568,346
Total long-term portion
INDEX
Local
139
1 40
•
ANNUAL REPORT 2008
b) International Bonds
c) Discount in bond placements
On October 4, 2002, the Company registered in
On November 5, 2002, the Company issued and
Discounts in bond placements have been de-
the Securities Register of the Superintendency
placed bonds under regulation 144A in the US mar-
ferred over the periods equal to those for the
a) ENAP Bonds I-2002 Series A Sub series A-1 and A-2
of Securities and Insurance, under N°303, the is-
ket for US$290 million at an annual interest rate
corresponding placement. The balance is shown
suance in the local market of bonds adjustable
of 6.75%. On March 16, 2004, the Company issued
in “Other current assets, short and longterm”, in-
in UF, which took place on October 22, 2002.
and placed 144A type bonds for US$150 million in
cluding other expenses for bond placement.
This placement was issued in two sub-series,
the US market at an annual interest rate of 4.875%.
A1 and A2, whose characteristics are as follows:
The maturity for both placements is 10 years.
The placement of bonds in the local market was
With semi-annual interest payments and princi-
for UF 3,250,000. Maturity is at ten years, with
pal amortization at maturity.
semi-annual interest, at an annual rate of 4.25%,
and principal amortization at maturity.
NOTE 17 | ACCRUALS AND WRITE-OFFS
The detail of accruals is as follows:
PROVISIONES Y CASTIGOS
2008
ThUS$
2007
ThUS$
Vacations
19,872
21,323
Compensation and personnel benefits
25,677
22,274
0
3,761
168
168
Short - term:
Severance indemnities
Maritime concessions
Barge and tug-boat careening provision
0
455
8,315
5,713
Environmental provision
18,000
500
Financial expenses Enercón S.A.
10,236
-
Tank ships overstay
11,050
1,868
Price adjustment provision (2)
17,700
-
Negative equity Investment provision (Note 11)
Credit notes to clients ERSA provision
4,333
-
Supplier invoices - ERSA provision
3,901
-
Other
4,886
2,254
Total
124,138
58,316
123,829
153,202
5,015
126,359
and environmental remediation (1)
56,963
65,953
11,073
14,274
Long - term:
Severance indemnities
Income tax (Note 7)
Provision for the removal of rigs, normalization of wells
Other long-term provisions
Total
246
588
197,126
360,376
(1)Accrual to cover the Company’s expenses for the removal of oil rigs in the Magallanes Strait, normalization of oil wells and environmental remediation.
(2) Accrual to adjust for of the annual reliquidation of the selling price of gas for Methanex, in accordance with the related contract (Train 1). It also includes the invoicing of
the gas delivered by ENAP during 2008, according to an agreement that awaits final approval by both companies.
•
ANNUAL REPORT 2008
Write-offs - At December 31, 2008, ENAP recorded write-offs of ThUS$25,599 (ThUS$0 in 2007), related to exploration projects. During 2008 the subsidiary
Enap Refinerías S.A. recorded write-offs of ThUS$1,831 (ThUS$0 in 2007), related to fixed assets.
At the subsidiary Enap Sipetrol S.A. the following write-offs occurred in connection with foreign projects:
2008
ThUS$
0
2007
ThUS$
1,107
0
3,443
East Ras Quattara - Egipto
5,211
1,845
CAM 2A - Sur - Argentina
1,137
0
182
0
North Bahariya - Egipto
El Diyur - Egipto
Pampa del Castillo - Argentina
Campamento Central Cañadón Perdido - Argentina
2,181
0
TOTAL
8,711
6,395
2008
ThUS$
12,217
2007
ThUS$
8,258
The subsidiary Enap Sipetrol S.A. has established the following provisions to reduce assets to their realizable value:
Impairment CAM 2A Sur - Argentina (net)
Provisión por desvalorización de materiales - Argentina
1,377
1,365
Bloque Merh - Irán (2)
27,262
0
TOTAL
40,856
9,623
(2) OMV, in its capacity as operator of the Merh block, and acting on behalf of the consortium formed with Repsol and Enap Sipetrol S.A through its subsidiary Sipetrol Internacional S.A., delivered on January 24, 2009, a letter addressed to the Exploration Director of the National Iranian Oil Company (NIOC), informing him that a unanimous
decision had been reached to not continue with negotiations for developing the Band-e- Karkheh oil field. The decision is based on the fact that they have been unable to
reach an agreement with NIOC on the Development Plant needed to developed the related oil field.
Considering that contractual obligations have been met, NIOC was informed that the clause granting the right to recover the exploration expenses and the remuneration
fee, would be invoked, in accordance with the terms of the Exploration Services Agreement entered into by and between the consortium and NIOC.
Regardless of the situation described in the preceding paragraph, for conservation and based on the collection resources available to management, Enap Sipetrol S.A.,
through its subsidiary Sipetrol Internacional S.A., established a provision reserving ThUS$27,262 of related capitalized costs recorded in Other current assets (Assets for sale)
at December 31, 2008.
INDEX
1 41
142
•
ANNUAL REPORT 2008
NOTE 18 | SEVERANCE INDEMNITIES
The change in the accrual for severance indemnities, is summarized as follows:
SEVERANCE INDEMNITIES
Opening balance at January 1st
Increase in accruals
Payments for the year
2008
2007
ThUS$
ThUS$
156,963
137,629
24,354
11,721
(3,857)
(2,374)
Effect of switch from current value to actual value (Note 21)
(19,211)
-
Exchange differences
(34,420)
9,987
Total
123,829
156,963
NOTE 19 | MINORITY INTEREST
The minority interest relates to the interest of minority shareholders in Enap Refinerías S.A.
MINORITY INTEREST
Subsidiary's
2008
Minority ownership
equity
ThUS$
411,387
%
0.02
ThUS$
166
Effects on
income
(charge)/credit
ThUS$
438
Subsidiary's
equity
ThUS$
659,463
2007
Minority ownership
%
0.04
ThUS$
264
Effects on
income
(charge)/credit
ThUS$
8
•
ANNUAL REPORT 2008
NOTE 20 | CHANGES IN EQUITY
a. Changes in equity:
The changes in equity recorded between January 1 and December 31, 2008 and 2007, are as follows:
CHANGES IN EQUITY
Paid-in capital
Other reserves
Retained earnings
Net income (loss) for the year
Total ThUS$
Balances at January 1, 2007
876,701
(69,167)
80,550
50,799
938,883
Distribution of 2006 results
0
0
50,799
(50,799)
0
55,999
0
(55,999)
0
0
Net shareholder's equity changes
0
1,058
0
0
1,058
Net income for the year
0
0
0
49,632
49,632
Balance at December 31, 2007
932,700
(68,109)
75,350
49,632
989,573
932,700
(68,109)
75,350
49,632
989,573
Capitalization of reserves and/or profit
0
0
49,632
(49,632)
0
Prior year final dividend
0
0
(38,252)
0
(38,252)
250,000
0
0
0
250,000
0
(3,163)
0
0
(3,163)
Equity adjustment in investee
0
20,943
0
0
20,943
Net loss for the year
0
0
0
(957,791)
(957,791)
1,182,700
(50,329)
86,730
(957,791)
261,310
Capital increase through issuance of shares
INDEX
1 43
144
•
ANNUAL REPORT 2008
Through Decree Nº545 of April 20, 2007, the Min-
these resources with the accumulated balance in
capital contribution was completed through Su-
istry of Finance set the program for the transfer
favor of ENAP as of June 30, 2007 of the oil price
preme Decree No. 1389, dated October 29, 2008,
to the Country’s general revenue of part of Enap’s
stabilization Fund, for ThUS$38,044.2, for which
whereby the Ministry of Finance proceeded to
2005 and 2006 net income for a total amount of
a decree was issued, according to current legal
modify the budget of the Treasury, thus enabling
ThUS$40,036 (equivalent to ThCh$21,619,278) and
regulations in this respect. Likewise, it authorized
the capital contribution to occur on November
ThUS$5,321 (equivalent to ThCh$2,873,340), re-
the capitalization of net income for ThUS$5,200
10, 2008.
spectively. Subsequently, decree Nº686 of Decem-
the pipeline Pecket Esperanza, which had previ-
ber 18, 2007, of the Ministry of Finance, revoked
ously been accepted through Ord. Nº915, of Oc-
Through Ord. No. 64 dated January 23, 2009, the
tober 3, 2007, due to its social benefits. The differ-
Ministry of Finance authorized the following:
what was stipulated by the previous decree.
ence, which is ThUS$2,111.8 will be maintained as
On May 14, 2007, the Ministry of Finance,
a balance in favor of the Treasury.
through Ord. Nº 430 authorized the capitaliza-
a) To temporarily suspend during 2009 the policy
of transferring to ENAP 100% of the subsidiaries’
tion of ThUS$50,799 which corresponded to the
Through Decree No. 148, effective as of August
annual dividends, relating to the year ended De-
financial net income for the year 2006.
13, 2008, the Ministry of Finance authorized the
cember 31, 2008.
Through Ord. Nº1,272 of December 28, 2007, the
which was clas sified as the distribution of earn-
reduction of retained earnings by ThUS$38,252,
b) To temporarily suspend for 2009, the policy
Ministry of Finance transitorily suspended for the
ings relating to year 2005 and thus the net bal-
of transferring ENAP’s profits to the State (due
year 2007, the transfer of ENAP’s net income to
ance owed by the State to ENAP was reduce in
to the results generated in 2008), per the policy
the Treasury. At the same time, it transitorily an-
compliance with Law No. 20,063, upated by Law
established by resolution No. 25 dated August
nulled for that year, the transfer of net income for
No. 20,115, which created the Fuels’ Price Stabi-
11, 2005 of the Ministry of Finance, which stated
any reason, to complete the 14% return on equity
lization Fund.
that ENAP must transfe r a minimum level of
Article 2 of Law No. 20,278 authorized the Minis-
(40%) and/or as advanced profit sharing consist-
try of Finance to make a one time, extraordinary
ing of 14% of profitability over equity, calculated
Treasury scheduled for December 2007, the
capital contribution to Empresa Nacional del
with retained earning from prior periods.
Ministry of Finance accepted, in order to avoid
Petróleo in the amount of ThUS$250,000, which
with retained earnings from previous periods.
In relation to the ThUS$45,357 transfer to the
further company indebtedness, to compensate
resources to the State, whether as income tax
will be financed with resources available in the
form of financial assets of the Treasury. This
•
ANNUAL REPORT 2008
b. Other reserves:
Movements in other reserve s are as follows:
Movements in other reserves
Accumulated adjustment for translation of foreign subsidiaries
2008
ThUS$
(76,029)
2007
ThUS$
(76,029)
632
3,795
Net shareholders' equity changes
Other reserves
Total
25,068
4,125
(50,329)
(68,109)
c. Translation adjustments of foreign subsidiaries:
This item primarily consists of the reserve for translation adjustments of foreign subsidiaries as a result of changes in foreign investment and from the
valuation of the respective liabilities obtained to acquire this investment until December 2004.
Translation adjustments of foreign subsidiaries
Balances at 01.01.2008
Cía. Latinoamericana Petrolera S.A.
Other related companies
Total
Annual net variation
Balances at
Investment
Liabilities
2008
2007
ThUS$
ThUS$
ThUS$
ThUS$
ThUS$
(72,666)
-
-
(72,666)
(72,666)
(3,363)
-
-
(3,363)
(3,363)
(76,029)
-
-
(76,029)
(76,029)
INDEX
1 45
146
•
ANNUAL REPORT 2008
d. Net changes in equity
From January 2005 changes in equity of investees that kept their accounting in local currency are recorded in the line net changes in equity. The changes
in the period are as follows:
Net changes in equity
Balances at
Electrogas S.A.
Net changes of the year
01.01.2008
ThUS$
645
Investment
ThUS$
(823)
Balances at
Liabilities
ThUS$
-
2008
ThUS$
(178)
2007
ThUS$
645
1
-
-
1
1
Empresa Nacional de Geotermia S.A.
270
(231)
-
39
270
Enercon S.A.
261
-
-
261
261
(7)
-
(7)
forEnergy S.A.
Gas de Chile S.A.
Geotérmica del Norte S.A.
GNL Chile S.A
Innergy Holdings S.A.
3
2
-
5
3
62
(1,600)
-
(1,538)
62
(114)
-
-
(114)
(114)
157
(102)
-
55
157
Inversiones Electrogas S.A.
231
-
-
231
231
Norgas S.A.
431
(230)
-
201
431
Oleoducto Trasandino (Chile) S.A.
206
(172)
-
34
206
Petrosul S.A.
696
-
-
696
696
Sociedad Nacional de Oleoductos S.A.
893
-
-
893
893
53
-
-
53
53
3,795
(3,163)
-
632
3,795
Sociedad Nacional Marítima S.A.
Total
b. Other reserves
Other reserves are as follows:
Other reserves
Technical Revaluation of Fixed Assets of investee SONACOL S.A.
Equity adjustment in investee Petropower Energía Ltd.
Total
Balances at
01.01.2008
ThUS$
4.125
Investment
Liabilities
ThUS$
ThUS$
-
2008
ThUS$
4.125
Balances at
2007
ThUS$
4.125
-
20.943
-
20.943
-
4.125
20.943
-
25.068
4.125
•
ANNUAL REPORT 2008
NOTE 21 | OTHER NON-OPERATING INCOME AND EXPENSES
The detail of other non-operating income and other non-operating expenses is as follows:
OTHER NON-OPERATING INCOME AND EXPENSES
2008
ThUS$
2007
ThUS$
a. Other income:
Gains on sales of property, plants and equipment
-
27,476
4,281
6,515
Extraordinary revenue from payment of bonds to partners under Oil Operations Special Contract (CEOP) (Note 32)
11,075
-
Effect of switch from current to actual value (1)
19,211
-
3,300
-
-
26,189
6,436
11,626
Revenue from miscellaneous services
Extraordinary revenue from assignment of responsibility over expense control
Tax recovery
Dividends received from other companies
Other income
Total
3,732
2,927
48,035
74,733
-
(2,981)
(5,485)
-
(260)
-
b. Other expenses:
Provision for valuation of investments
Lower Stamp Tax refund (2)
Investments adjustment
Fixed assets write-offs
(26)
(47)
(17,500)
-
Provision for severance indemnitie plan
(138)
(374)
Cost of sale on miscellaneous services
(598)
(387)
(2,922)
(3,878)
(26,929)
(7,667)
Provision for contingencies and environmental liabilities
Other expenses
Total
(1) Effect of changing the methodology for valuing severance indemnities from the current value to accrued value (see note 18).
(2) In December 2008 the Chilean Internal Revenue Service calculated the Stamp Tax, resulting in a lower refund for the Company as compared to 2007.
INDEX
147
14 8
•
ANNUAL REPORT 2008
NOTE 22 | EXCHANGE DIFFERENCES
The detail of exchange differences credited (charged) to income are as follows:
EXCHANGE DIFFERENCES
Assets (charges)/credits
Cash
Trade receivables
Notes and accounts receivable from related companies - current portion
Recoverable taxes
Prepaid expenses
Other long-term assets
Notes and accounts receivable from related companies in long-term
Fixed assets - net
Other assets
Notes and accounts receivable to related companies - current portion
Total (charges) / credits
Currency
2008
ThUS$
2007
ThUS$
Chilean pesos
Argentine pesos
Chilean pesos
Argentine pesos
Chilean pesos
Argentine pesos
Chilean pesos
Argentine pesos
Chilean pesos
Chilean pesos
Chilean pesos
Argentine pesos
Chilean pesos
Argentine pesos
Chilean pesos
Chilean pesos
Argentine pesos
Argentine pesos
Argentine pesos
UK Pounds
(2,056)
(964)
(220,035)
1,174
(12,781)
(404)
(1,416)
(98)
(79,629)
(55,069)
55
(271)
(368)
(2,029)
(295)
1
(730)
(374,915)
1,262
(176)
55,881
110
4,064
173
284
23
12,369
13,135
64
(183)
789
287
1,729
(1,027)
(358)
(361)
88,065
Chilean pesos
60,863
(24,089)
Liabilities (charges)/credits
Accounts payable
Notes and accounts payable to related companies - current portion
Accruals current portion
Argentine pesos
420
(160)
Chilean pesos
681
(146)
Argentine pesos
(5)
(88)
Chilean pesos
4,927
(2,366)
Argentine pesos
1
(3)
Chilean pesos
155,781
(29,108)
Notes and accounts payable to related companies - long-term
Chilean pesos
518
(157)
Accruals in long-term
Chilean pesos
36,440
(10,005)
Chilean pesos
(13,899)
(19,006)
Argentine pesos
575
54
UK Pounds
216
-
246,518
(85,074)
(128,397)
2,991
Total credits/(charges)
Foreign exchange gain (loss)
The currency column indicates Chilean pesos, because since January 2005 Enap keeps its accounting in US dollar, in accordance with Note 2c).
•
ANNUAL REPORT 2008
NOTE 23 | EXPENSES ON ACCOUNT OF ISSUE AND PLACEMENT OF SHARE CERTIFICATES AND DEBT INSTRUMENTS
The detail of expenses for bond issuance shown in other current assets and in others in other assets is as follows:
expenses for bond issuance shown in other current assets and in others in other assets
Short term
Disbursement on bond issues - local
Long term
2008
ThUS$
218
2007
ThUS$
254
2008
ThUS$
599
2007
ThUS$
957
562
658
1,546
2,471
1,339
1,340
4,469
5,808
272
273
858
1,130
2,391
2,525
7,472
10,366
Increase in discount on bond issues - local
Disbursement on bond issues - international
Increase in discount on bond issues - international
Total
NOTE 24 | STATEMENT OF CASH FLOWS
The detail of cash and cash equivalents is as follows:
STATEMENT OF CASH FLOWS
2008 ThUS$
2007 ThUS$
81,836
96,979
7,913
18,858
-
17,119
56,583
-
146,332
132,956
Financial institution
Banco Santander Chile
Start
12/30/08
End
01/05/09
Currency
$
Subscription
ThUS$
23,843
Rate
%
0.50%
Book value
ThUS$
23,576
Banco de Chile
12/30/08
01/05/09
$
23,843
0.52%
23,578
Banco de Crédito e Inversiones
12/30/08
01/05/09
$
9,537
0.49%
Cash
Time deposits
Marketable securities
Other current assets (1)
Total
(1) Corresponds to the following resale agreements:
Total
57,223
9,429
56,583
Other investments income:
2008 ThUS$
2007 ThUS$
Recovery of short and long term employees' loans
10,357
2,513
Total
10,357
2,513
INDEX
1 49
150
•
ANNUAL REPORT 2008
NOTE 25 | HEDGE INSTRUMENTS
1.- Cross-currency swaps:
ENAP maintains a third UF/USD Cross Currency
notes and accounts payable, in 2005 ENAP en-
In order to hedge the UF-US dollar fluctuation
Swap, entered into on July 13, 2005 with ABN
tered into an interest rate swap for S$150,000,000
risk related to a 10-year, UF3,250,000 bond is-
AMRO, which matures on August 25, 2018, with
maturing in December 2010.
sued in the local market on October 22, 2002,
the objective of hedging the UF -US fluctuation
ENAP entered into two cross currency swaps.
risk related to a 13- year mortga ge lease on the
3.- Chilean peso/USD forwards
ENAP corporate building. This lease was obtained
ENAP, by mandate of Enap Refinerías S.A. has en-
The first one was entered into with JP Morgan
from Santander bank on June 28, 2005.
tered into exchange rate hedge contracts (peso/
dollar) to hedge exchange rate fluctuation risks
on October 22, 2002, for a total of UF2,956,916.23
which is equivalent to 91% of the principal. The
2.- Interest rate swaps and zero-cost collars:
second one was entered into with Citibank on
With the objective of taking the variable interest
May 11, 2004 for UF293,083.77 which is equiva-
rate of its long-term syndicated loans obtained
4.- Zero-cost collar hedge contracts for WTI
lent to 9% of the principal.
between 2003 and 2005 to fixed rate, ENAP en-
crude oil
tered into several interest rate swaps for 100% of
ENAP, by mandate of Enap Refinerías S.A. has
the principal of such loans.
entered into zero-cost collar hedge contracts
On May 30, 2008, both swaps were terminated
due to flows from trade receivables.
to cover the risk of price variations of imported
early, and two new swaps were entered into for
the same amo unts in order to hedge the bond
With the objective of hedging against the risk of
crude oil between the date the oil is shipped and
mentioned in the preceding paragraph. The early
the variable interest rate of the US$150,000,000
the estimated date in which the prices of the re-
termination generated a gain of US$60,896,888
syndicated loan obtained in December 2006, ENAP
fined products are set.
and US$5,130,000, respectively. The new swap
entered into three interest rate zero-cost collars.
for UF2,956,916.23 was entered into with ABN
AMRO whereas the new swap for UF293,083.77
Also, to hedge against the risk of fluctuations in
was entered into again with Citibank.
the 3- month Libor interest rate for short-term
•
ANNUAL REPORT 2008
HEDGE INSTRUMENTS
CONTRACT DESCRIPTION
Type of derivative
Value of
Due date
contract contract
period or
Purchase /
expiry
Sale
Type of
ThUS$
Specific Item
Position
Accounts affected
Value
Asset / Liability
Amount
of ITEM
Name
ThUS$
hedged
Transactions hedged
Name
Accounts affected
AMOUNT
Realized
Unrealized
ThUS$
ThUS$
ThUS$
ThUS$
CROSS CURRENCY SWAP
CCPE
123,652
IV Quarter
2012
CROSS CURRENCY SWAP
CCPE
12,256
IV Quarter
2012
CROSS CURRENCY SWAP
CCPE
21,017
III Quarter
Exchange rate
Exchange rate
CCTE
50,000
III Quarter
Exchange rate
CCTE
50,000
III Quarter
Interest rates
CCTE
150,000
IV Quarter
Interest rates
Interest rates
CCTE
70,000
III Quarter
S
CCTE
70,000
III Quarter
Interest rates
CCTE
80,000
III Quarter
Interest rates
CCTE
50,000
IV Quarter
Interest rates
CCTE
50,000
IV Quarter
Interest rates
Interest rates
CCTE
50,000
IV Quarter
F
CCTE
40,000
I Quarter
P
Long term Obligations vct. and
13,354
13,354
Interest rates
-37,429
-
Other assets / liabilities Swap
3,797
-3,797
-
Liabilities with banks and financial
252
-
252
1,019
-174
-845
1,019
-174
-845
4,477
-9
-4,468
10,465
-251
-10,214
10,459
-250
-10,209
12,245
-251
-11,994
3,672
-
-3,672
2,796
-
-2,796
3,704
-
-3,704
long-term
50,000
50,000
Other current assets other
current liabilities
50,000
50,000
Other current assets other
current liabilities
150,000
150,000
Other current liabilities / other
assets / other long-term liab.
40,000
40,000
40,000
40,000
40,000
40,000
50,000
50,000
Other assets / other long-term
liabilities
50,000
50,000
liabilities
institutions
2013
37,429
long-term
institutions
2013
ZERO COST COLLAR
9,879
institutions
2013
ZERO COST COLLAR
9,879
institutions
2013
ZERO COST COLLAR
Bonds
institutions
2013
S
P
institutions
2013
long-term
institutions
2010
S
99,668
institutions
2009
S
99,668
creditors in long-term
2009
S
Bonds
and rates
2018
S
P
and rates
50,000
50,000
liabilities
institutions
Exchange rates
Trade receivables
40,000
40,000
Other current assets / liabilities
2,510
-
-2,510
Exchange rates
Trade receivables
40,000
40,000
2,617
-
-2,617
Exchange rates
Trade receivables
95,000
95,000
OTROS ACT. CIRC/PASIVOS
1,649
-
-1,649
767
-
-767
2009
F
CCTE
40,000
I Quarter
2009
F
CCTE
95,000
I Quarter
CIRCULANTES
2009
F
CCTE
40,000
I Quarter
Exchange rates
Trade receivables
40,000
40,000
F
CCTE
55,000
I Quarter
OTROS ACT. CIRC./PASIVOS
CIRCULANTES
2009
Exchange rates
Trade receivables
55,000
55,000
101
-
-101
Exchange rates
Trade receivables
25,000
25,000
OTROS ACT. CIRC/PASIVOS
55
-
-55
2009
F
CCTE
25,000
I Quarter
CIRCULANTES
2009
F
CCTE
55,000
I Quarter
Exchange rates
Trade receivables
55,000
55,000
202
-
202
Exchange rates
Trade receivables
25,000
25,000
4
-
4
WTI
Inventories
19,279
19,279
3,213
-
3,213
WTI
Inventories
17,529
17,529
3,022
-
3,022
WTI
Inventories
46,663
46,663
4,276
-
4,276
WTI
Inventories
17,909
17,909
2,793
-
2,793
2009
F
CCTE
25,000
I Quarter
2009
ZERO COST COLLAR
CCTE
15,725
I Quarter
2009
ZERO COST COLLAR
CCTE
13,913
I Quarter
2009
ZERO COST COLLAR
CCTE
34,110
I Quarter
2009
ZERO COST COLLAR
CCTE
13,480
I Quarter
2009
INDEX
15 1
15 2
•
ANNUAL REPORT 2008
HEDGE INSTRUMENTS
Type of derivative
Value of
Due date
contract contract
period or
Purchase /
expiry
Sale
Type of
ThUS$
Specific Item
Position
Accounts affected
Value
Asset / Liability
Amount
of ITEM
Name
ThUS$
hedged
Transactions hedged
Name
Accounts affected
AMOUNT
Realized
Unrealized
ThUS$
ThUS$
ThUS$
ThUS$
ZERO COST COLLAR
CCTE
16,176
I Quarter
WTI
Inventories
22,135
22,135
2,842
-
2,842
WTI
Inventories
20,511
20,511
1,393
-
1,393
WTI
Inventories
21,359
21,359
1,408
-
1,408
WTI
Inventories
19,056
19,056
1,533
-
1,533
WTI
Inventories
18,014
18,014
826
-
826
WTI
Inventories
18,962
18,962
469
-
469
WTI
Inventories
23,632
23,632
532
-
532
WTI
Inventories
20,128
20,128
563
-
563
WTI
Inventories
33,574
33,574
1,079
-
1,079
WTI
Inventories
19,043
19,043
428
-
428
WTI
Inventories
19,202
19,202
688
-
-688
WTI
Inventories
16,328
16,328
1,825
-
-1,825
WTI
Inventories
17,467
17,467
1,182
-
-1,182
WTI
Inventories
17,727
17,727
998
-
-998
2009
ZERO COST COLLAR
CCTE
14,675
I Quarter
2009
ZERO COST COLLAR
CCTE
13,230
I Quarter
2009
ZERO COST COLLAR
CCTE
16,597
I Quarter
2009
ZERO COST COLLAR
CCTE
16,122
I Quarter
2009
ZERO COST COLLAR
CCTE
13,650
I Quarter
2009
ZERO COST COLLAR
CCTE
15,470
I Quarter
2009
ZERO COST COLLAR
CCTE
16,380
I Quarter
2009
ZERO COST COLLAR
CCTE
30,722
I Quarter
2009
ZERO COST COLLAR
CCTE
12,199
I Quarter
2009
ZERO COST COLLAR
CCTE
11,580
I Quarter
2009
ZERO COST COLLAR
CCTE
11,466
I Quarter
2009
ZERO COST COLLAR
CCTE
13,658
I Quarter
2009
ZERO COST COLLAR
CCTE
11,216
I Quarter
2009
NOTE 26 | CONTINGENCIES AND RESTRICTIONS
a. Lawsuits:
provision has been recorded in connection with
•
ANNUAL REPORT 2008
On October 13, 2008, ENAP sued Mr. Julio Rojas
these lawsuits, as ENAP’s management and law-
Peñaloza with the 34th Criminal Court of Santiago,
yers believe it is unlikely they will cause the Com-
alleging that the defendant repeatedly commit-
pany to make any significant disbursement.
ted fraud against the Chilean State prior to June
16, 2005. Also on October 13, 2008, the criminal
a.1) ENAP, the Parent Company
Currently, the Company has 14 labor lawsuits
The Company has been sued in 3 civil lawsuits,
court presented the charges to the accused but
which involve approximately ThUS$3,932 (in 8 of
one involving ThUS$11 and seeking the court to
claimed it had no jurisdiction, sending the case to
them the amount involved cannot be determined
rule that the statute of limitations has expired for
the 32nd Criminal Court of Santiago. At the same
time, the Centro-Norte District Attorney office of
so far). This figure includes 10 lawsuits where
the Company to auction off a property for non-
ENAP is being sued for its subsidiary liability. No
payment of a mortgage and other obligations;
Santiago began to investigate similar charges, but
provision has been recorded in connection with
and two seeking payment of damages worth
occurred after June 16, 2005, under case No. RUC
these lawsuits, as ENAP’s management and law-
ThUS$471. No provision has been recorded in con-
0800910804-2.
yers believe that it is unlikely that they will cause
nection with these lawsuits, as ENAP’s manage-
the Company to make any significant disburse-
ment and lawyers believe that it is unlikely that
ment.
they will cause the Company to make any significant disbursement.
a.2) The Subsidiary Enap Refinerías S.A. (ERSA)
The subsidiary Enap Refinerías S.A. has the follow-
The Company is being sued in 2 lawsuits (in 1 of
ing lawsuits and litigations that, in the opinion of
them the amount at stake cannot be determined)
A lawsuit is still in progress in connection with the
for environmental remediation and regularization
establishment and use of easements for the Con-
ally nor combined, any contingency of significant
of easements, as well as for payment of damages,
cón-Maipú pipeline, operated by the entity Socie-
loss for this subsidiary.
management, do not represent, neither individu-
involving appro ximately ThUS$19,798. The fact
dad Nacional de Oleoductos. Whether acting as
that no lawsuit ruling can be predicted prevents
defendant of plaintiff, ENAP will not be affected
ERSA is defendant in 31 labor lawsuits, from which
the Company from accurately assessing the out-
by the outcome of this lawsuit in its finances, be-
10 of them involve subsidiary liability for a total
come of this lawsuit.
cause in agreements entered into with Sociedad
of ThUS$366 (in 5 of these lawsuits the amount at
Nacional de Oleoductos it is stated that the latter
stake cannot yet be determined); 3 lawsuits deal
However, ENAP’s management and lawyers be-
has to bear any payments that may arise in cases
with simulated contracts or legal acts and amount
lieve it is unlikely it will cause the Company to
like this.
to ThUS$721 (in 1 of them the amount at stake can-
make any significant disbursement. For this rea-
not be determined); 9 cases were filed to seek pay-
son, no provision has been recorded in the finan-
As a result of the oil spill in San Vicente Bay on
ment of ThUS$1,007 worth of damages caused by
cial statements.
May 25, 2007, two lawsuits (cases Nos. 4-2007 and
work hazards; 7 cases were filed to seek payment
17-2007) were served to ENAP at terminal B of Bío
of ThUS$105 worth of labor-related amounts alleg-
ENAP, as plaintiff, has filed 10 lawsuits, involving
Bío refinery owned by Enap Refinerías S.A., on
edly owed by ERSA (in 4 of them the amount at
approximately ThUS$4,907, in connection with
December 2007 and January 2008, respectively,
stake cannot be determined); and 2 lawsuits were
easements (in 7 of them the amount involved
seeking payment of damages. Regarding the first
filed by two employees who claim that they were
cannot be determined so far). No provision has
of these lawsuits the Valparaíso Court of Appeals
pregnant when terminated by ERSA (a practice
been recorded in connection with these lawsuits,
has yet to pass a ruling on a resolution that denied
forbidden by Chilean law) and regarding which the
amount at stake cannot yet be determined.
as ENAP’s management and lawyers believe that
the accumulation of these lawsuits into a single
it is unlikely that they will cause the Company to
one (case No. 931-2008 at Valparaíso Court of Ap-
make any significant disbursement. In addition,
peals). Regarding the second one, a lawsuits ac-
ERSA is defendant in 2 civil lawsuits, from which
the Company has been sued for alleged breach of
cumulation petition was denied (the Valparaíso
one is seeking the payment of ThUS$755 for death-
contract in 2 civil lawsuits involving approximate-
Court of Appeals requested to be sent this case,
related damages; whereas the other seeks pay-
ly ThUS$5,228. In one of these lawsuits the lower
in connection with the denial of a lawsuits accu-
ment of ThUS$221 worth of invoices, in executive
court ruling denied completely the plaintiff’s
mulation petition associated to case No. 4-2007).
proceedings.
claims, but the plaintiff appealed. ENAP answered
ENAP alleges that it has no liability because the
the other lawsuit and both parties agreed to post-
pipeline and other installations involved in the oil
ERSA is the plaintiff in one criminal lawsuit involv-
pone a conciliation hearing for March 2009. No
spill are owned by Enap Refinerías S.A..
ing ThUS$299. ERSA is the plaintiff in a tax lawsuit
INDEX
153
154
•
ANNUAL REPORT 2008
where it has tax liability for Empresa Almacena-
whereas the other 2 cases were filed with a district
to operate…”. The court said that the above had to
dora de Combustibles S.A. (EMALCO), a company
court in Talcahuano, bearing numbers 108 and 647,
be considered in conjunction with section 11th of
merged with Enap Refinerías S.A.. The Chilean IRS
and involving ThUS$2,889.
the same ruling, where the court rules that ERSA
complied with the “Contingenc y Plan to Control
applied a 35% on amounts it considers as disal-
Spills of Hydrocarbons, LPG and Chemicals”.
lowed expenses and as a result it is asking pay-
The Company considers that these lawsuits are
ment of ThUS$95.
not relevant, because it has the legal arguments
as well as sufficient information to reasonably
ERSA has insurance policies in force covering civil
Other contingencies of Subsidiary Enap Refinerías
believe that it will be able to cause the court to
liability that have been activated and would cover
deny the plaintiffs’ actions by proving as facts the
this possible contingency.
S.A. (ERSA).
following: a) that a sizable number of plaintiffs are
On May 25, 2007, an oil spill occurred at San Vi-
not entitled to file these lawsuits; b) that the plain-
Management believes that this contingency might
cente Bay, in Chile’s southern 8th administrative
tiffs have claimed that the oil spill caused damages
or might not result in a possible penalty or mon-
region, when oil was being downloaded from the
that in fact are non existent; c) that there is un-
etary sanction from the appropriate authority,
ship “New Constellation” to Terminal B of Bío Bío
certainty about the cause of the spill mentioned
which due to having the character of a sanction,
Refinery, owned by Enap Refinerías S.A.
by the plaintiffs; d) that there is no cause-effect
would not be covered by any insurance policy.
relationship between the damages claimed and
However, management believe that even if this
As of December 31, 2007, as a result of the oil spill,
the oil spill: several studies point out that the con-
were the case, such sanction would in no way have
ERSA had been served 11 lawsuits seeking pay-
tamination mentioned by the plaintiffs occurred
a significant impact on the company’s equity as
ments for damages of an amount which, in aggre-
before the spill; e) that the law excludes a large
appearing on its financial statements.
gate, is equivalent to ThUS$61,837. All the lawsuits,
part of the damages invoked by the plaintiffs: the
except for one filed by the Council for the Defense
applicable law (the Navigation Law) considers only
of the State (a government body), come from fish-
as eligible for indemnity the loss of future income
a.3) The subsidiary Enap Sipetrol S.A.
a.3.1 Enap Sipetrol Argentina S.A.
ermen and people who made the ir living by col-
and reasonable environmental remediation mea-
lecting seaweeds and seafood. They bear numbers
sures; and f) that there is no consistency between
4, 6, 7, 25, 28, 33, 37, 38 and 39, all filed in 2007, and
the amounts being sought in the lawsuits and the
a.3.1.1 Process for determining taxes due (VAT)
are following the proceedings set forth in Decree
significance or economic size of the activities al-
1.- Argentine Tax Court, Roo m “C”, Speaker Office
Law 2,222 with judges of the Court of Appeals of
legedly affected, because the plaintiffs say that to-
80, Case N°21,248-I, “Sipetrol Argentina S.A. vs.
the city of Concepción. In additio n, two lawsuits
tal damages equal an amount roughly equivalent
DGI, Appeal”. The investigated period runs from
were filed at district courts in Talcahuano, one,
to MUS$195, for an industry whose annual revenue
October 1997 to December 1998; appeal filed Feb-
with number 3020, by the Municipality of Talca-
does not exceed ThUS$500.
ruary 20, 2003; involving ThUS$640.4. On Decem-
huano, for which the amount at stake cannot yet
ber 27, 2008 it was petitioned that cases 26,944-I
be determined, and the other, with number 2099,
Regarding the lawsuits, it should be pointed out
a civil lawsuit seeking payment of ThUS$589 worth
that the Concepción court of appeals in a sentence
on December 3, 2008, Enap Sipetrol S.A. submit-
of damages, by owners of restaurants located on
dated Nov. 14, 2007, upheld by the Supreme Court
ted as new fact that the Administración Federal
and 26,942-I be accumulated into this lawsuit, and
on Dec. 18, 2007, dismissed all the petitions for
de Ingresos or “AFIP” (Argentine IRS) issued on
protective orders filed against ERSA in connection
November 21, 2008 the Reply No. 2514/08 to the
The amount of ThUS$61,837 breaks down as fol-
with the oil spill, stating that “it cannot be claimed
query submitted by Enap Sipetrol S.A. about the
lows: approximately 17% relates to moral damage;
that ERSA committed an arbitrary act or omission,
procedure for calculating VAT under Decree PEN
14% to actual damages caused; 40% involves loss
i.e., done on purpose or whimsically, because it has
679/99, as well as External Reply 15/05 regarding
of future income; and 28% relates to damages
been proved that the underwater lines or pipelines
customs issues. Court is yet to rule on the accu-
caused to the environment.
were being supervised and monitored before op-
mulation petition.
Lenga bay.
erating in the unloading of oil…”, adding that “…the
During 2008 the Parent Company was served 8
alleged scenario of lack of adequate measures to
2.1.- Argentine Tax Court, Room “A”, Speaker
lawsuits, 6 of them filed with the Court of Appeals
face the environmental emergency suggested by
Office 20, Case N°24,357-I, “Sipetrol Argen-
of the city of Concepción, bearing numbers 17, 40,
the plaintiffs is not true… because the broken line
tina S.A. vs. DGI, Appeal-Penalty for VAT”. The
42, 1, 9, 10, and 13, and involving ThUS$130,897;
or pipeline had been replaced and then authorized
investigated period includes April, July, and
•
ANNUAL REPORT 2008
August 1998; appeal filed December 6, 2004;
lawsuit No. 21,248-I. On December 3, 2008, Enap
YPF UTE MAGALLANES c/DGI s/Recurso de Apel-
involving ThUS$89.4. In March 2006 this case
Sipetrol S.A. submitted as new fact that the Ad-
ación", período observado enero a diciembre de
was accumulated into lawsuit No. 21,248-I.
ministración Federal de Ingresos or “AFIP” (Ar-
2000, fecha del recurso 17 de febrero de 2006, mon-
2.1.- Administrative Disputes District Court No.
gentine IRS) issued on November 21, 2008 the
to comprometido MUS$1.903,8. Diciembre de 2006
4, Secretariat N°8, Case N°17,772/05 titled “AFIP
Reply No. 2514/08 to the query submitted by Enap
la causa fue acumulada al Expediente Nº21.248-I.
vs. Sipetrol S.A. - Attachment”. Attachment of
Sipetrol S.A. about the procedure for calculating
vehicles worth ThUS$89.4. The attachment re-
VAT under Decree PEN 679/99, as well as External
3.- Tribunal Fiscal de la Nación, Sala "C", Vocalía
lates to the appeal filed with the Tax Court in
Reply 15/05 regarding customs issues.
de la 70 Nominación, Expediente Nº29.037-I, "Si-
6.- Argentine Tax Court, Room “A”, Speaker Office
observado enero a diciembre de 2001, fecha del re-
case No. 24,357-I. On April 4, 2008, the court was
petitioned to replace the attachment of vehicles
petrol Argentina s/Recurso de Apelación", período
with a bond. Through a July 22, 2008 ruling, the
20, Case No. 31,108-I, “Enap Sipetrol Argentina S.A.
curso 14 de febrero de 2007, monto comprometido
court denied the attachment replacement peti-
Appeal”. The investigated period runs from Janu-
MUS$651,9. En febrero de 2007, Enap Sipetrol S.A.
tion. On August 20, 2008, an appeal was filed.
ary 2002 to December 2004; appeal filed Febru-
interpuso Recurso de Apelación contra la Resolu-
On October 21, 2008, the case was sent to the
rary 12, 2008; involving ThUS$1,264.3. On Decem-
ción 88/06 y solicitó la acumulación al Expediente
Administrative Disputes Chamber, Room 4, of
ber 3, 2008, Enap Sipetrol S.A. submitted as new
Nº21.248-I. Con fecha 3 de diciembre de 2008,
the Court of Appeals.
fact that the Administración Federal de Ingresos
Enap Sipetrol S.A. denunció como hecho nuevo
or “AFIP” (Argentine IRS) issued on November 21,
que la AFIP dictó con fecha 21 de noviembre de
3.- Argentine Tax Court, Room “D”, Speaker Office
2008 the Reply No. 2514/08 to the query submit-
2008, la Nota Nº2514/08 (DE TEIM), mediante la
120, Case No. 25,011-I, “Sipetrol Argentina S.A. vs.
ted by Enap Sipetrol S.A. about the procedure for
cual respondió la consulta efectuada por la empre-
calculating VAT under Decree PEN 679/99, as well
sa respecto del procedimiento para la liquidación
June to December 1999; appeal filed Februrary
as External Reply 15/0 5 regarding customs issues.
del IVA en el marco del Decreto PEN 679/99 y la
21, 2005; involving ThUS$33.6. All judges are to
Nota Externa DGA 15/05.
decide on whether to accumulate this case into
Sipetrol Argentina S.A. - YPF S.A. - UTE Magal-
lawsuit No. 21,248-I. On December 3, 2008, Enap
lanes.
4.- Tribunal Fiscal de la Nación, Sala "A", Vocalía de
Sipetrol S.A. submitted as new fact that the Ad-
1.- Tribunal Fiscal de la Nación, Sala "B", Vocalía de
la 120 Nominación, Expediente Nº31.136-I, "Sipetrol
ministración Federal de Ingresos or “AFIP” (Ar-
la 50 Nominación, Expediente Nº25.010-I, "Sipet-
Argentina S.A. YPF S.A. - UTE", período observado
gentine IRS) issued on November 21, 2008 the Re-
rol Argentina S.A.-YPF S.A. UTE Magallanes c/DGI
enero 2002 a diciembre de 2004, recurso de 15 de
ply No. 2514/08 to the query submitted by Enap
s/Recurso de Apelación", período observado junio
febrero de 2008, monto comprometido MUS$1.119,7.
a diciembre de 1999, fecha del recurso 21 de febre-
Con fecha 14 de noviembre de 2008, Resolución
ro de 2005, monto comprometido MUS$4.777,3.
del Tribunal mediante la cual resolvió elevar los
Reply 15/05 regarding customs issues. Court is yet
Expediente se encuentra en espera del término
autos al Tribunal en Pleno, a efectos de tratar la
to rule on the accumulation.
período de prueba. Con fecha 3 de diciembre de
acumulación al Expediente Nº21.248-I. Con fecha
2008, Enap Sipetrol S.A. denunció como hecho
3 de diciembre de 2008, Enap Sipetrol S.A. denun-
nuevo que la AFIP dictó con fecha 21 de noviem-
ció como hecho nuevo que la AFIP dictó con fecha
80, Case No. 26,942-I, “Sipetrol Argentina S.A. vs.
bre de 2008, la Nota Nº2514/08 (DE TEIM), medi-
21 de noviembre de 2008, la Nota Nº2514/08 (DE
ante la cual respondió la consulta efectuada por
TEIM), mediante la cual respondió la consulta efec-
January to December 2000; appeal filed Februrary
la empresa respecto del procedimiento para la
tuada por la empresa respecto del procedimiento
17, 2006; involving ThUS$58.7. Since year 2006 this
liquidación del IVA en el marco del Decreto PEN
para la liquidación del IVA en el marco del Decreto
679/99 y la Nota Externa DGA 15/05. Diciembre
PEN 679/99 y la Nota Externa DGA 15/05.
4.- Argentine Tax Court, Room “C”, Speaker Office
case has been accumulated into lawsuit 21.248-I.
de 2008. Se solicitó la acumulación al Expediente
5.- Argentine Tax Court, Room “D”, Speaker Of-
Nº21.248-I.
Sipetrol Argentina S.A. - YPF S.A. - UTE Magallanes
fice 120, Case No. 29,034-I, “Sipetrol Argentina
1.- Argentine Tax Court, Room “B”, Speaker Of-
S.A. Appeal”. The investigated period runs from
2.- Tribunal Fiscal de la Nación, Sala "C", Vocalía de
fice 50, Case No. 25,010-I, “Sipetrol Argentina
January to December 2001; appeal filed Februrary
la 90 Nominación,
S.A._YPF S.A. UTE Magallanes vs DGI.Appeal”.
Expediente Nº26.944-I, "Sipetrol Argentina S.A.-
ber 1999; appeal filed February 21, 2005; involving
14, 2007; involving ThUS$152.6. All judges are to
decide on whether to accumulate this case into
The investigated period runs from June to Decem-
INDEX
155
156
•
ANNUAL REPORT 2008
ThUS$4,777.3. Period for submitting evidence has
mente la prueba documental e informativa ofre-
not yet ended in these proceedings. On Decem-
cida en el recurso de impugnación.
fact that the Administración Federal de Ingresos
Sipetrol Argentina S.A. - YPF S.A. - UTE CAM
3.- Rio Gallegos Customs Office. Case N°13289-
or “AFIP” (Argentine IRS) issued on November 21,
2/A Sur
32930-2006. Proceedings for determining supple-
mentary tax liquidations on exports; involving
10, Case N°32,306-I, “Sipetrol Argentina S.A. YPF
ThUS$3,517.9. On March 21, 2008, a resource was
S.A. - Unión Transitoria de Empresas CAM 2/A
filed seeking the revocation of a resolution by the
ber 3, 2008, Enap Sipetrol S.A. submitted as new
as External Reply 15/05 regarding customs issues.
SUR”. The investigated period runs from January
Rio Gallegos Customs Office that rejected in part
In December 2008, court was petitioned to accu-
2003 to December 2004; appeal filed September
evidence consisting in documentation and infor-
mulate this case to lawsuit No. 21,248-I.
9, 2008; involving ThUS$5,948.4. On December
mation submitted in the case.
3, 2008, Enap Sipetrol S.A. submitted as new fact
that the Administración Federal de Ingresos or
4.- Comodoro Rivadavia Customs Office. Cases
90, Case No. 26,944-I, “Sipetrol Argentina S.A._
“AFIP” (Argentine IRS) issued on November 21,
N°13289-31034-2006 and 13289-34826-2006. Re-
YPF S.A. UTE Magallanes vs DGI.Appeal”. The in-
garding these proceedings, the Official Bulletin
vestigated period runs from January to December
published on September 21, 2006 and October
2000; appeal filed February 17, 2006; involving
25, 2006 a listing of pre-adjustments to the value
ThUS$1,903.8. In December 2006, this case was
as External Reply 15/05 regarding customs issues.
applicable in accordance with article 748, para-
accumulated in lawsuit No. 21,248-I.
In December 2008, court was petitioned to accu-
graph b), of the Customs Code. The adjustments
mulate this case to lawsuit No. 21,248-I.
were made on October 11 and November 15,
2006, respectively.
70, Case N°29,037-I, “Sipetrol Argentina S.A. Ap-
Based on the views of its legal and tax advisors,
peal”. The investigated period runs from January
the Company considers that it has strong possi-
5.- Comodoro Rivadavia Customs Office. Case
to December 2001; appeal filed February 14, 2007;
bilities of getting a favorable ruling in connection
N°13289-5897-2007. Court request for taking a
involving ThUS$651.9. In February 2007, Enap Si-
with these contingencies, in the sense that its po-
bond to cover a charge not included in the notifi-
petrol S.A. filed an appeal against resolution 88/06
sition will prevail. No provision has been recorded
cation. On February 28, 2008 a resource was filed
and petitioned the court to accumulate this case
because the Company’s management and lawyers
against the request.
to lawsuit No. 21,248-I. On December 3, 2008,
believe it’s unlikely they will cause the Company
Enap Sipetrol S.A. submitted as new fact that
to make any significant disbursement.
the Administración Federal de Ingresos or “AFIP”
a.3.1.3 Other litigation - Enap Sipetrol Argentina S.A.
1.- Lower Court N°2 for Civil, Business, Labor
(Argentine IRS) issued on November 21, 2008 the
a.3.1.2 Customs Duties
and Mining Issues of the city of Rio Gallegos.
Reply No. 2514/08 to the query submitted by Enap
Case N°12.2005/05 entitled “Aguero, Pablo Rubén
1.- Argentine Tax Court. Case N°22,923-A. Pro-
and Other vs F&V Empresa de Servicios S.R.L.
ceedings for determining supplementary tax liq-
and Others. Labor Lawsuit”. Plaintiffs demand
uidations on exports; resource filed April 11, 2007;
payment of differences. The amount involved is
involving ThUS$1,414.3. Case is at stage where par-
ThUS$44.3. Enap Sipetrol Argentina S.A. is be-
ties can submit evidence.
ing sued for subsidiary labor liability. A filing was
S.A. - UTE”. The investigated period runs from Jan-
2.- Rio Gallegos Customs Office. Case SIGEA
down ruling.
uary 2002 to December 2004; appeal filed Febru-
N°12-52279/06. Proceedings for determining tax
120, Case N°31,136-I, “Sipetrol Argentina S.A. YPF
made on October 14, 2008. Court about to hand
rary 15, 2008; involving ThUS$1,119.7. On Novem-
on merchandise imported into the Territorial Sea
ber 14, 2008, the case was sent to the judges, who
in accordance with the regulations set forth in De-
are to decide on whether to accumulate this case
cree 79/99. On July 20, 2005, a resource was filed
Case N°2.278/04 entitled “Haberkorn, Luis Alberto
into lawsuit No. 21,248-I. On December 3, 2008,
with the Argentine Economy Ministry against an
vs. Ultramar Argentina S.A. and Another. Layoff”.
Enap Sipetrol S.A. submitted as new fact that
Argentine IRS resolution, in keeping with art. 94
Labor lawsuit. Plaintiff demands payment of differ-
the Administración Federal de Ingresos or “AFIP”
of Law 19,359. The Office for Legislative and Tax
ences regarding the final liquidation. The amount
(Argentine IRS) issued on November 21, 2008 the
Issues of the Economy Ministry is in charge of the
involved is ThUS$10.1. Enap Sipetrol Argentina S.A.
Reply N°2514/08 to the query submitted by Enap
case since October 28, 2008, and the resolution
is being sued for subsidiary labor liability. Proceed-
on the resource is still pending. rechazar parcial-
ings at stage where parties may submit evidence.
2.- Lower Court N°2 for Civil, Business, Labor
•
ANNUAL REPORT 2008
3.-Lower Court N° 2 for Civil, Business, Labor
8.- Civil and Business Federal Lower Court N°10,
culating a total of ThUS$9,896.0 worth of taxes
Secretariat N°9. Case N°12,500/07 entitled “Gran-
due. In addition, a surcharge of US$72.9 was ap-
Case N°13.379/08 entitled “Cisneros, Maria Cris-
son, Pedro and Heirs vs. Enap Sipetrol Argentina
plied due to the Tax Equality Law. On December
tina vs. Enap Sipetrol Argentina S.A.”. Labor law-
S.A.. Easements” Plaintiff seeks payment of dam-
29, 2008, SIPEC filed with the Northern Regional
suit. The amount involved is ThUS$274.9. The
ages amounting to ThUS$1,210.6. Proceedings at
Director of the Ecuadorian IRS an administrative
hearing seeking a conciliation of the parties was
stage where parties can submit evidence.
complaint rejecting all the amounts assessed by
the Ecuadorian IRS. A resolution has to be is-
held (as required by article 47 of law 1444 of Proa.3.2. Ecuadorian Branch Enap Sipetrol S.A.
sued that would open a requested 30-day term
submit evidence.
a.3.2.1 Tax Lawsuits
volved, plus interest, is ThUS$3,786.6.
4.-Lower Court N°2 for Civil, Business, Labor
a.3.2.1.1 Tax Lawsuits for business year 2002
2.- Third Room of Tax District Court N°1. Case No.
First Room of Tax District Court. Case N°24645
24626-A against Metropolitan District Munici-
Case N°12,492/08 entitled “Toledo, Fernando vs.
filed by PERENCO against the Ecuadorian IRS
pality of Quito for tax of 1.5 per thousand on total
Enap Sipetrol Argentina S.A.”. Labor lawsuit. The
in conection with income tax in business year
assets of 2004. The amount involved is ThUS$4.0.
amount involved is ThUS$37.7. Plaintiff sues Enap
2002. In February 2002, SIPEC sold its interest in
Through resolution No. 02305 issued on October
vincial Labor Proceedings). Enap Sipetrol Argen-
for submitting evidence. To date, the amount in-
tina S.A. answered the lawsuit and requested to
Sipetrol Argentina S.A. and YPF S.A. Plaintiff then
Blocks 7 and 21. The Ecuadorian IRS launched an
22, 2008, the Tax Financial Metropolitan Direc-
decided not to sue YPF S.A. The hearing seeking a
audit of blocks 7 and 21. In this case in particular,
tor for Quito cancelled the tax assessment. Final
conciliation of the parties was held (as required by
the Ecuadorian IRS considers that beginning in
closing of the case was requested.
article 47 of law 1444 of Provincial Labor Proceed-
2002 the companies should have filed a unified
ings). Enap Sipetrol Argentina S.A. answered the
income tax return, but the partners continued to
lawsuit. Evidence was submitted.
file individual tax returns.
1.- In 2007 the Hydrocarbons National Bureau
started a special audit of the investments, operating costs and expenses, and services rate of
5.- Comodoro Rivadavia Lower Labor Court. Sin-
To date there is no Tax Court ruling. There is no
gle Secretariat. Case N°4540/07 entitled “Gomez,
amount at stake for SIPEC, because in business
the Branch of Sociedad Internacional Petrolera
Rodrigo Sebastian vs. NYC S.R.L. and Another”.
year 2002 SIPEC posted losses, and would not be
S.A. for business year 2005. As a result of this
Labor lawsuit (Statutory severance indemnity).
affected by taxation.
audit the Hydrocarbons National Bureau concluded that there are non-deductible financial
The amount involved is ThUS$22.4. Plaintiff sues
NYC S.R.L. as employer and Enap Sipetrol Argen-
tina S.A. for subsidiary liability.
Second Room of Tax District Court. Case N°26241
ThUS$1,743.9; for excessive posting of income tax
against Ecuadorian IRS in connection with in-
amounting to ThUS$191.5; for excessive calcula-
come tax in business year 2003, filed due to IRS
tion of production amortization amounting to
6.- Buenos Aires Lower Labor Court No. 60. Case
expenses for payment of interest amounting to
N°16284/08 entitled “Ovando, Abel vs. Servicios
tax assessment No. RNO-ATRADPU2008- 0003.
ThUS$959.1; for purchase of a PETREL software
Petroleros S.A. and Others. Law 22,250”. The
Faced with this IRS administrative action, SIPEC
license amounting to ThUS$60.5; and an unjusti-
amount involved is ThUS$5.7. On August 22, 2008
filed a tax lawsuit with the District Tax Court on
fied calculation difference amounting to ThUS$0.1
the lawsuit was answered and court called on par-
October 28, 2008. Through a resolution dated
between physical inventory and accounting. On
November 27, 2008, the Second Room of the
a document filed with the secretariat of the
Tax District Court acknowledged the lawsuit
Mining and Petroleum Ministry on December
7.- Civil and Business Federal Lower Court N°10, Sec-
and gave the Ecuadorian IRS 20 days to answer
20, 2007, SIPEC presented its objections to the
retariat N°9. Case N°2498/08 entitled “Granson, Pe-
it. To date, the amount involved, plus interest, is
Hydrocarbons National Bureau audit before the
dro and Heirs vs. Enap Sipetrol Argentina S.A..” Pre-
ThUS$407.1.
Mining and Petroleum Minister, who has not yet
ties to submit evidence.
issued any reply. However, the Energy and Min-
ventive attachment of property worth ThUS303.9,
an amount which was increased with the extension
ing Ministry may not correct tax assessments.
of the attachment to another ThUS172.7 worth of
1.- Administrative Complaint filed with Ecuador-
Therefore, its report and conclusions can only be
property. Plaintiff claims damages caused by the oc-
ian IRS for audit of business year 2004.
a reference for the Ecuadorian IRS.
to the activities conducted in the oil field Pampa del
Through assessment No. 1720080100202 the
2.- Second Room of Tax District Court N°1. Law-
Castillo-La Guitarra, over new periods of time since
Ecuadorian IRS determined SIPEC’s income tax
suit against Metropolitan District Municipality of
the original attachment was ordered.
and advances relating to business year 2004, cal-
Quito for tax of 1.5 per thousand on total assets of
cupation and movement of soils in his property due
INDEX
15 7
158
•
ANNUAL REPORT 2008
was submitted for inclusion in the proceedings.
2005. The amount involved is ThUS$56.7. Through
was submitted. On December 10, 2008, the
resolution No. 02305 issued on October 22, 2008,
documentation requested by the plaintiff was
There is no court ruling yet. In this regard, it is
the Tax Financial Metropolitan Director for Quito
exhibited. The final hearing was held on January
impossible to determine the amount involved in
cancelled the tax assessment. Final closing of the
9, 2009. Court to issue ruling. Amount involved
these proceedings, because it is impossible to
case was requested.
is ThUS$180.
predict whether or not the Ministry will accept
or deny the complaint. If it does accept the com-
4.-2nd Labor Court of Pichincha. Case N°2008-
plaint, the resolution may accept it in whole or in
First Room of Tax District Court N°1. Case No.
0499 filed by Jaidy Jefferson González against
part, i.e., it may recognize profits for 2005, 2006
25621 against Metropolitan District Municipality
subcontractors URAZUL, ARB, SAE, and SIPEC as
and/or 2007, or only for 2006 and 2007. Also, it
of Quito for tax of 1.5 per thousand on total as-
contractor. Plaintiff claims being owed payment
may resolve that all, or a part of, the employees
sets of 2006. Through resolution N°02305 issued
for unjustified layoff, severance payment, and
of SAE, depending on their tasks, are entitled to
on October 22, 2008, the Tax Financial Metropol-
15% of profits of years 2003 to 2008. Conciliation
the profits. Although the amount to be distribut-
itan Director for Quito cancelled the tax assess-
hearing set for May 27, 2009. Amount involved is
ed among the employees, if the ruling is unfavor-
ment. Final closing of the case was requested.
ThUS$120. SIPEC considers that it is not bound
able for SIPEC, may be as high as approximatey
by any contract with the plaintiff.
US$ 8 million, it is worth pointing out that SIPEC
may deal with this contingency at least partially
First Room of Tax District Court No. 1. Case
5.- 2nd Labor Court of Pichincha. Case N°2008-
by using the profits to be distributed among its
N°26221 against Metropolitan District Munici-
0801 filed by Tapia Cuji, Marco Antonio against
own direct employees in business year 2008.
pality of Quito for tax of 1.5 per thousand on to-
SIPEC. Plaintiff claims being owed severance
tal assets of 2007. Through resolution N°02305
payment of ThUS$120.0 relating to 15% of in-
7.- Civil Court of Orellana. Case N°529-2008.
issued on October 22, 2008, the Tax Financial
come of year 2007, from January 1 to November
Special lawsuit filed by 21 employees of the
Metropolitan Director for Quito cancelled the
2, 2007. Preliminary hearing set for November
contractor SAE against SIPEC. Plaintiffs wish
tax assessment. Final closing of the case was re-
30, 2009.
to be hired directly by SIPEC. On December 2,
2008 a public hearing was held where the law-
quested.
a.3.2.2 Labor Lawsuits
6.- Complaint filed in December 2007, with the
suit was answered. On December 12, 2008, the
Regional Labor Office of Quito. A group of 51
judge ruled in favor of the plaintiffs and ordered
SIPEC to immediately hire them. On December
1.- 4th Labor Court of Pichincha. Case N°2007-
17, 2008, SIPEC appealed with the Court of Ap-
0967. “Tapia Cuji, Marco Antonio vs. SIPEC”.
employees of the contractor company SAE, from
Plaintiff claims being owed severance payment
which SIPEC hired maintenance services, claims
peals of Sucumbios, which has jurisdiction over
of ThUS$33.6 relating to 15% of income of year
being owed 15% of profits of business years 2005,
Orellana. No resolution on appeal filed has yet
2006. On October 28, 2008 the judge denied
2006 and 2007. The Director of the Regional La-
been issued.
the lawsuit alleging lack of legitimate plaintiff.
bor Office of Quito has started a review to estab-
On November 6, 2008, plaintiff filed appeal, on
lish whether or not the employees are entitled to
a.3.3 Egipto
which no resolution has yet been passed.
the profits they demand.
Appeal filed with the court of appeals of Cairo
2- 4th Labor Court of Pichincha. Case N°2008-
SIPEC has filed all the relevant legal arguments
dealing with the voidance of a lease agreement,
0390 filed by Ricardo Vinicio Garcia Linto against
in order to demonstrate that the way the profits
return of offices, and collection of rentals. The
subcontractors URAZUL, ARB, SAE, and SIPEC as
from 2005, 2006, and 2007 were distributed was
plaintiff is seeking the Company to pay 90 mil-
contractor. Plaintiff claims being owed severance
correct, and that the employees in question are
lion Egyptian pounds (ThUS$15.0).
payment and profits. Documentation was submit-
not entitled to the earnings they claim. SIPEC
ted on January 19, 2009. Final hearing set for Febru-
even tried to leave on consignment the profits
Although the Company is unable to forecast the
ary 12, 2009. Amount involved is ThUS$190. SIPEC
from business year 2007 with the Regional Labor
outcome of this lawsuit, it has not recorded any
considers that it is not bound by any contract with
Office of Quito so that it would distribute them
provision in connection with it, as the Company’s
the plaintiff.
appropriately. However, this labor authority did
management and lawyers believe it is unlikely
not accept such consignment.
the court will condemn the Company to pay
again st sentence passed in lawsuit No. 379/2006
the amount requested by the plaintiff, thus not
3- 2nd Labor Court of Pichincha. Case N°20080446. Plaintiff claims being owed benefits and
On November 21, 2008 the conciliation hearing
causing the Company to make any significant
profits. On October 24, 2008, the Hearing for
was held before the Director of the Regional La-
disbursement.
answering the lawsuit was held, and evidence
bor Office of Quito, and the relevant evidence
•
ANNUAL REPORT 2008
b. Direct guarantees - Enap
Creditor to guarantee
Debtor
Description
Type of
Committed
Outstanding balances
guarantee
assets
at December
Name Relationship
Type
Book
2008
2007
Release of guarantees
2008
Assets 2009 and Assets
value
Dirección Regional
de Vialidad Región de
ENAP Parent
Company
works inpector - Temporary access to
bond
after
MUS$1
2009; for UF 43.
Chilena
Performance
road CH - 257. Maturity in December
Magallanes y Antártica
Dirección Regional
Guarantees compliance with orders of
ENAP Parent
Company
Guarantees the correct application of
Performance
signaling in project "Temporary access
bond
to road CH - 257". Cachapoal exploratory
Chilena
well. Maturity in December 2009; for
MUS$1
UF 43
Dirección Regional
ENAP Parent
Company
ENAP Parent
Company
Guarantees the correct execution of proj- Performance
MUS$5
ect "Temporary access to road CH - 257". bond
December 2009; for UF 150.
Chilena
Aeronáutica Civil
MUS$2
Cachapoal exploratory well. Maturity in
Dirección General de
bond
for UF 72.
Chilena
Performance
of project "Temporary access to road
CH - 257". Maturity in December 2009;
Dirección Regional
Guarantees civil liability in execution
ENAP Parent
Company
Guarantees concession in "Aeropuerto
Performance
Mataveri", in Isla de Pascua (Easter
bond
MUS$49
Island), which matures in January 2010;
for UF 1,452
Dirección General del
Territorio Marítimo
ENAP Parent
Company
Guarantees cost of removal and construc- Performance
tion of works. Maturity in January 2009;
MUS$26
bond
for ThUS$26.
c. Direct guarantees - Enap Refinerías S.A.
Direct guarantees - Enap Refinerías S.A.
Creditor of the guarantee
Chilquinta Energía S.A.
Description
Committed
assets
Type of guarantee Type Book
Value
On June 2, 2005, the Company granted
Boleta de Garantía
Chilquinta Energía S.A. a certificate of deposit in
Bancaria
foreign currency for ThUS$11,000 later increased
by THUS$534, ThUS$279, and ThUS$476, all
valid up to April 30, 2009; to guarantee the
faithful, complete, and timely payment of all
the obligations assumed by Enap Refinerías S.A.
under the contract for the supply of energy and
electric power dated April 29, 2005.
INDEX
at December
2008
2007
2008
Assets
2009 and
following
ThUS12.289
Assets
15 9
16 0
Creditor
of the
guarantee
•
ANNUAL REPORT 2008
Debtor
Name
Description
Type of
Committed assets
guarantee
Relationship
Type
Book value
2007
2008 Assets
2009 and
Assets
after
Methanex
Guarantee for compliance with obligations
Several
Sipetrol
of Sipetrol established in the Contract
liability
Argentina
for Sale of Gas between Sipetrol/YPF and
S.A.
Methanex (equivalent to 30% of the con-
Enap
Subsidiary
Indirect
(*)
tract). The remaining obligation amounts
to 2,357,250,000SCM(9,300 Kcal/m3), at
a base price of 0.75 US$/MM Btu (indexed
to the methane price) and valid up to
08.08.2016.
Guarantees the obligations ofEnap Refin-
Several
Refinerías
erías S.A. in the processing agreement
liability
S.A.
signed with Petropower, in force until 2018.
Petropower
Enap
Energía Ltda.
Subsidiary
(*)
The guaranteed obligation is the payment
of processing services for approximately
ThUS$18,000 a year.
Petropower
Enap
Guarantee for obligations of Enap Refinerías
Several
Energía Ltda.
Refinerías
S.A. established in severalcontracts entered
liability
S.A.
into for the Petropower project (i) Contract
Subsidiary
(*)
for Capital Contribution to the company
(15% ownership), (ii) Contract for use of
land for the project, and (iii) Indemnity
Contract for dishonest and negligent actions or omissions by Enap Refinerías S.A..
The obligation of capital contribution has
been complied with. The remaining obligations can not be cash -valued in advance.
Guarantees are valid up to year 2018.
YPF y
Innergy
Guarantees (25%) compliance with the ob-
Several
Panamerican
Holding
ligations of Innergy in Gas Purchase Agree-
liability
S.A.
ment with YPF- Bridas - Pluspetrol. The
Investee
(*)
agreement obligation started in 2004 and
is in effect until 2019. The 25% guarantee
is equivalent to ThUS$6,000 in 2004, and
is annually adjusted up to ThUS$12,750 in
2019; This is subject to the effective gas
supply by the creditors of the guarantee
Gasoducto del
Innergy
Guarantee (25%) compliance with obliga-
Several
Pacífico S.A.
Holding
tions of Innergy in Gas Transport Agreement
liability
S.A.
with Gasoducto del Pacífico . The agreement
Investee
(*)
obligaton is in effectfrom 1999and until
2019. The 25% guarantee is equivalent to
approximately ThUS$8,000 in 2002, annully
readjusted up to ThUS$15,000 in 2019.
Banco KfW
Pledge on shares of Etalsa S.A. owned by
Pledge on
Alcoholes
ENAP to guarantee payment of loan to
shares
S.A. (Etalsa)
finance the project, valid until 2012.
Eteres y
Investee
ThUS$ 2,950
(*)
Enap
Garantees obligations of Enap Refinerías
Several
Alcoholes S.A.
Refinerías
S.A. stipulated in the Process Services
liability
(Etalsa)
S.A.
Contract (PSA), which is valid until 2017.
2,087 shares in
Etalsa
Etalsa
Eteres y
Subsidiary
2,087
shares in
(*)
Creditor
of the
guarantee
Debtor
Name
Description
Type of
Committed assets
guarantee
Relationship
Type
Book value
•
ANNUAL REPORT 2008
2007
2008 Assets
2009 and
Assets
after
Banco KfW
Petrosul
Investee
S.A.
Pledge on shares of Petrosul S.A. owned by
Lien on shares
Garantee obligations of Enap Refinerías S.A.
Several
Refinerías
stipulated in the Process Services Contract,
liability
S.A.
which is valid until 2018.
Subsidiary
Banco BNP
Productora
Pledge of the Productora de Diesel S.A.
Prenda
Paribas
de Diesel
shares owned by ENAP, guaranteeing the
comercial de
S.A.
payment of the loan obtained to finance
acciones
(Prodisa)
the project until 2016.
Investee
(*)
1,579 shares in
Petrosul S.A.
S.A.
valid until 2012.
Enap
ThUS$ 2,092
Petrosul
obtained to finance the project, which is
Petrosul S.A.
1.1,579
shares in
ENAP to guarantee the repayment of credit
(*)
2,219,987
ThUS$ 1,303
(*)
2,219,987
shares in
shares in
Productora
Productora de
de Diesel
Diesel S.A.
S.A.
Productora
Enap
Guarantees the obligations of Enap
Several
de Diesel S.A.
Refinerías
Refinerías S.A. stipulated in the Processing
liability
(Prodisa)
S.A.
Contract (PSA). The obligation originates
Subsidiary
(*)
once the plant is accepted, which ocurred
in January 2005, and expires in the year
2020.
Compañía de
Enap
Several
Hidrógeno del
Refinerías
liability
Bio Bio S.A.
S.A.
Subsidiary
(*)
once the plant is accepted (in January
2005) and expires in the year 2015.
Société Généralé
Pledge ofshares in Compañía de Hidrog-
Pledge of
de
eno del Bío Bío S.A. owned by ENAP
shares
Hidrogeno
del Bío Bío
S.A.
rent up to year 2015.
Compañía
Investee
50,000
ThUS$ 540
(*)
50,000 shares
shares in
in Compañía de
RefineríasS.A., to guarantee repayment of
Compa-
Hidrogeno del
credit obtained for funding of project, cur-
ñía de
Bío Bío S.A.
Hidrógeno
del Bío
Bío S.A.
Energía Concón
Enap
Pledge of
S.A.
Refinerías
shares
S.A.
Subsidiary
(*)
once the plant is accepted (estimated
for October 2008) and expires in the year
2020.
Banco BNP
Energía
Pledge of shares in Energía Concón S.A.
Pledge of
Paribas
Concón S.A.
owned by ENAP, to guarantee repayment
shares
(ENERCON)
Investee
176,749
ThUS$ 5,281
(*)
in
ofcredit obtained for funding ofproject,
Energía
Energía Concón
current up to year 2020
Concón
S.A.
S.A.
Chicago Bridge
GNL
Guarantees the payment obligations
Several
& Iron Company
Quintero
contracted by GNL Quintero S.A. prorata of
liability
S.A.
ENAP’s ownership interest in that company,
Investee
176,749 shares
shares in
under the Engineering Contract, Procurement Contract and Construction Contract
signed on April 30th, 2007 for the construction of the LNG project, for an amount
of up to US$26.15 million
(*) The release of the guarantees are associated to the fulfilment of the contracts that originate them.
INDEX
(*)
161
162
•
ANNUAL REPORT 2008
Direct guarantees - Enap Refinerías S.A.
Outstanding
balances at
December
Creditor to
Debtor
guarantee
Name
Committed assets
Relationship
Description
Type of
Type
Book value
guarantee
Banco KfW
Petrosul S.A.
Investee
2008
2007
2008 Assets
2009 and
Assets
after
Pledge of shares in Petrosul
Pledge of
3,160 shares in
S.A. owned by ENAP Refinerías
shares
Petrosul S.A.
ThUS$4,186
(*) 3,160 shares in
Petrosul S.A.
S.A., to guarantee repayment
of credit obtained for funding
of project for ThUS$20,921,
current up to year 2012.
Banco KfW
Eteres y
Pledge of shares in Etalsa S.A.
Pledge of
2,087 shares in
Alcoholes S.A.
Investee
owned by ENAP Refinerías S.A.,
shares
Etalsa
(Etalsa)
to guarantee repayment of
ThUS$2,950
(*)
2,087 shares
in Etalsa
credit obtained for funding of
project for ThUS$30,500, current up to year 2012.
Banco BNP
Productora
Pledge of the Productora de
Pledge of
7,769,953
Paribas
de Diesel S.A.
Diesel S.A. shares owned by
shares
shares in
(Prodisa)
ENAP Refinerias S.A., guaran-
Investee
ThUS$4,560
(*)
7,769,953
shares in
Prodisa
Prodisa
teeing the payment of the loan
obtained to finance the project
for ThUS$110,451 current up to
year 2016.
Société
Compañía de
Pledge of the Compañía de
Pledge of
50,000
Généralé
Hidrogeno del
Hidrógeno del Bío Bío S.A.
shares
Compañía de
Compañía de
Bío Bío S.A.
shares owned by ENAP Refin-
Hidrógeno del
Hidrógeno del
erías S.A., guaranteeing the
Bío Bío S.A.
payment of the loan obtained
shares
Investee
ThUS$540
(*)
50,000
Bío Bío S.A.
shares
to finance the project until
2015.
Banco BNP
Energía
Pledge of the Energía Concón
Pledge of
318.148 Energía
Paribas
Concón S.A.
S.A. shares owned by ENAP
shares
Concón S.A.
(ENERCON)
Refinerias S.A., guarantee-
Investee
ing the payment of the loan
obtained to finance the project
until 2020.
shares
MUS$9.506
(*)
318.148
Energía
Concón S.A.
shares
•
ANNUAL REPORT 2008
c. Indirect guarantees Enap Sipetrol S.A.
Indirect guarantees Enap Sipetrol S.A.
Outstanding
balances at
December
Creditor to
Debtor
guarantee
Name
Relationship
Committed assets
Description
Type of
Type
Book value
guarantee
Methanex
Guarantee for compliance with
Several
obligations of Sipetrol Argentina S.A.
liability
2008
2007
2008
Assets
2009 and
after
Indirect
established in the Contract for Sale of
Gas between Sipetrol/YPF and Methanex
(equivalent to 30% of the contract).
The remaining obligation amounts to
2,375,250,000 SCM(9,300 Kcal/m3),
at a base price of 0.75 US$/MM Btu
(indexed to the methane price) and
valid up to 08.08.2016.
EGAS
Guarantee for the minimum explora-
Stand By
Indirect
ThUS$10.000
ThUS$10.000
Stand By
Indirect
ThUS$11.700
ThUS$11.700
Minimum
Direct
ThUS$3.000
ThUS$3.000
Direct
MUS$4.000
ThUS$4.000
Direct
ThUS$32
ThUS$32
tion obligation for Area 2- Rommana in
Egypt, valid up to December 31, 2010.
EGAS
Garantía por compromiso mínimo
exploratorio por el Bloque 8 - Side Abd
El Rahaman en Egipto, con vencimiento
el 13 de diciembre de 2010
Arab Repub-
Guarantee for completion of minimum
lic of Egypt
works in Rawda Development lease,
amount
North Bahariya Concession. Expiry on
September 9, 2010.
Arab Repub-
Guarantee for completion of minimum
Minimum
lic of Egypt
works in North Bahariya Development
amount
Lease. Expiry on September 9, 2010.
Servicio de
Guarantee for 10% of complaint for
Rentas In-
incorrect payment in 2003. Expiry on
immediate
ternas (IRS)
October 27, 2009.
collection
Guarantee for
Ecuador
INDEX
Assets
1 63
164
•
ANNUAL REPORT 2008
In addition to the guarantees summarized in
the Bío Bío Refinery in Talcahuano, which started to
ENAP guarantees the obligations of Enap Refin-
the above tables, there are other guarantees re-
operate in 2005. All the hydrogen produced by the
erías S.A under the Processing Services Contract.
ceived under the normal course of business, by
plant is used by Enap Refinerías S.A. in its facilities.
(5) PETROSUL
both ENAP and its subsidiaries.
Therefore, there is a 15 year Processing Service
ENAP, through its subsidiary Enap Refinerías
d. Commercial Commitments:
Contract between the Compa ñía de Hidrógeno del
S.A., in conjunction with other shareholders, has
The Company and subsidiaries have the following
Bío Bío S.A. and Enap Refinerías S.A. which is ex-
agreed to invest US$27 million to build two sul-
commercial commitments related to its operations:
tensible for an additional year in cases specified in
fur plants. These plants started processing in the
(1) PETROPOWER
the same contract, under which the company pays
last quarter of 2003. Both refineries are obligated
a net US$4.7 million annual plant operating fee. At
to pay an annual operating fee for the plants of
The Company, through its subsidiary Enap Re-
the end of this period, Enap Refinerías S.A. will pur-
between US$3.9 million and US$4.6 million. This
finerías S.A., in 1994 entered into an agreement
chase the plant at its residual value.
agreement expires in 2018. At the expiration of
the agreement, the subsidiary is obligated to
with Petropower providing for the payment of an
annual processing fee of approximately US$17.4
At the date of delivery of the plant, the Enap Refin-
million for the right to operate its delayed cok-
erías S.A. subsidiary recorded a transaction in a sim-
amount. At the date of delivery of both plants,
ing and hydrotreatment plant and an annual fee
ilar manner to a purchase of a fixed asset (leasing).
the subsidiary recorded this transaction in a way
purchase both plants for the contract’s nominal
similar to the pur chase of a fixed asset (leasing).
of approximately US$9.9 million for the supply
of certain ene rgy products. This agreement is
ENAP guarantees the obligations of Enap Refinerías
subject to annual increases until the expiration
S.A. under the Processing Services Contract.
ENAP guarantees the obligations of Enap Refinerías S.A under the Processing Services Contract.
of the agreement in 2018.
(3) INNERGY HOLDING S.A.
(6) PRODISA
Other conditions in the agreement require, in
ENAP has committed to contribute US$48.43 mil-
case of a reduction in the annual income defined
lion as a capital contribution in the related com-
ENAP and its subsidiary Enap Refinerías S.A.,
in the processing contract and business agree-
pany Innergy Holdings S.A., of which US$44.70
together with other shareholders, has invested
ments and after the Operator of the plant has
million have been paid as of December 31, 2008.
US$110 million in the construction of a Gas Oil
its subsidiary Enap Refinerías S.A. participate in
Innergy Holding S.A. and its subsidiaries have a
racking ) in the Bío Bío Refinery in Talcahuano,
50% and Foster Wheeler in 50% of the balance
negative equity, net losses and operating losses
which began operating in 2005.
contributed 10% of such shortfall that ENAP and
Mild Hydrocracking plant (MHC - Mild Hydroc-
of such shortfall, which should not exceed US$1.4
for the year. In this respect, the shareholders are
million per year.
studying new business alternatives to ensure the
company's operating continuity.
In addition, Enap Refinerías S.A. is obligated to ei-
The plant is operated and maintained by Enap Refinerías S.A., Refinerías Bío Bío. There is a 15-year
Processing Service Contract between Prodisa y
ther purchase or arrange for the sale of assets of
(4) ETALSA
Enap Refinerías. After this period, Enap Refinerías
Petropower Energía Ltda. for not less than US$43
The Company, through its subsidiary Enap Refin-
S.A. will acquire the plant at its residual value.
million at the expiration of the agreement (2018)
erías S.A., has entered into an agreement with
Under the contract, the Company pays a net an-
or on any other date agreed by the parties.
ETALSA for the payment of an annual processing
nual plant-processing fee of US$13.3 million. At the
fee between US$4.7 million and US$5.7 million
date of delivery of the plant, the Enap Refinerías
for the di- iso-propyl-ether plant. This agreement
S.A. subsidiary recorded a transaction in a man-
erías S.A under the Processing Service Contract.
expires in 2017. At the end of the agreement, the
ner similar to a purchase of a fixed asset (leasing).
subsidiary may exercise its option to purchase
(2) HYDROGEN PLANT AT THE BÍO BÍO
the plant for approximately US$ 2.6 million. At
erías S.A. under the Processing Services Contract.
REFINERY
the date of delivery of the plant (September
ENAP and its subsidiary Enap Refinerías S.A., to-
2002), the Enap Refinerías S.A. subsidiary re-
(7) ENERGIA CONCON S.A.
gether with other shareholders, have invested US$32
corded a transaction in a manner similar to a
The subsidiary Enap Refinerías S.A. and ENAP
million in the construction of a hydrogen plant in
purchase of a fixed asset (leasing).
have entered into agreements with Foster
•
ANNUAL REPORT 2008
Wheeler Iberia S.A. from Spain, Man Ferrostaal
Montajes de Chile Limitada, respectively, dated
(11) INNERGY SOLUCIONES ENERGETICAS S.A.
A.G. from Germany and Técnicas Reunidas S.A.
April 30, 2007 for the construction of the LNG
Enap Refinerías S.A. has entered into a contract
from Spain for the financing, construction and
project. The guarantee is for a maximum month-
with Innergy Soluciones Energéticas S.A. for the
operation of a delayed coking facility in the
ly amount of US$ 26.15 million.
supply of 370,000 cubic meters of natural gas
refinery located in Concón. This project represents a total investment of approximately
until 2018.
(9) GNL CHILE S.A.
US$430 million. The owner Company of the
On May 31, 2007, the Enap Refinerías S.A. subsid-
(12) PETROLEOS MARINOS DE CHILE LTDA.
project is a corporation incorporated under
iary signed a natural gas sales contract with GNL
On May 1, 2006, Enap Refinerías S.A. entered
Chilean laws under the corporate name of En-
Chile S.A. that guarantees the necessary supply
into a contract with Petróleos Marinos de Chile
ergía Concón S.A. (ENERCON).
for the operation of its Aconcagua Refinery in
Ltda. to transport through the latter, Fuel Oil,
the locality of Concón.
IFOS, and Cutter stock through a pipeline that
The aforementioned plant will be operated and
connects the Quintero Terminal owned by Enap
maintained by Enap Refinerías S.A., Aconcagua
This contract is for a 21- year period under the
Refinerías S.A. to the fuels terminal located in
Refinery. There is a Processing Services Agree-
mode of “deliver or pay” and for a maximum
Greda Alta and owned by Puerto Ventanas S.A..
ment entered into by Enap Refinerías S.A. and
contract volume of gas equivalent to a third of
Under the contract, Enap Refinerías S.A. is obli-
Energía Concón S.A. for a 20 year operating pe-
1.7 million tons a year of LNG, which means for
gated, each year the contract is in force and re-
riod. After this period, Enap Refinerías S.A. will
Enap Refinerías S.A. a supply of 2.2 million cubic
gardless of the circumstances, to move a mini-
purchase the plant at its residual value. ENAP
meters of natural gas per day. It is estimated that
mum of 550,000 tones. The contract will be in
guaranteed the obligations of Enap Refinerías
the delivery of natural gas will take place in the
force for 36 months as from Ma y 1, 2008, a date
S.A. under the processing services contract.
second quarter of 2009. ENAP guarantees the
on which the pipeline starts operations.
This plant is being built by the trust formed by
obligations contracted by its Enap Refinerías S.A.
Unión Temporal de Empresas (UTE) comprising
subsidiary under the natural gas sales contract.
e. Restrictions:
e.1 The Parent Company
Foster Wheeler Iberia, Initec Plantas Industriales and Man Ferrostaal and the Chilean com-
This sales contract is part of a series of commer-
On November 2007 the restrictions stipulated as
pany Construcción e Ingeniería FIM Chile Ltda.
cial contracts of the LNG Project that were signed
covenants in the syndicated loans were lifted.
The project started operating in July 2008, and
on May 31, 2007. This project has the purpose of
is currently in preliminary operations.
purchasing liquefied natural gas (LNG) abroad,
As of December 31, 2008, the company and its
storing it and regasifying it in the Regasifying
subsidiaries have no restrictions or financial
The project is financed through the partners’
Plant that will be located in the municipalities of
covenants to comply with its creditor banks and
capital contributions (5% of the total invest-
Quintero and Punchuncaví in the country’s V Re-
public bonds.
ment) and a syndicated loan arranged by BNP
gion, and the supply of natural gas to the central
Paribas, Citigroup and Calyon (95%). Enap Re-
zone of the country.
e.2 Enap Sipetrol Argentina S.A.
finerías S.A. together with its parent company
ENAP jointly own 49% of the company’s capi-
(10) PRIMAX ECUADOR S.A.
According to applicable Argentine legislation the
tal and the remaining 51% is owned by Técnicas
On June 4, 2008, Repsol YPF S.A. and Primax Ec-
company must allocate 5% of the year’s income to
Reunidas S.A., Man Ferrostaal A.G. and Foster
uador S.A. (a subsidiary of Primax Holding S.A.),
building a statutory reserve, which is an account
Wheeler Iberia S.A. in equal participations.
entered into an agreement for the assignment of
forming part of the net shareholders’ equity, until
45,801,649 shares in the company Repsol YPF Co-
such reserve is equal to 20% of the adjusted paid
(8) GNL QUINTERO S.A.
mercial Ecuador S.A., so that Primax Ecuador S.A.
-in capital.
ENAP jointly guarantees the payment obliga-
may run in Ecuador an operation for the market-
tions contracted by GNL Quintero S.A. prorata
ing of fuels and lubricants, and an aviation busi-
of ENAP’s ownership interest in that company
ness. Enap Refinerías S.A. holds a 49% interest in
(20%), under the Engineering Contract, Procure-
the investment that the Company has conducted
ment Contract and Construction Contract signed
through Primax Holding S.A in Ecuador.
with CB&I UK Limited, with Southern Tropic
Material Supply Company Limited and with CBI
INDEX
16 5
166
•
ANNUAL REPORT 2008
f. Other contingencies:
f.1.2 Application of Export Taxes to Special
retroactive claim on export operations carried
Customs Area.
out since 2002, would amount to approximately
On October 10, 2006, the Argentine Ministry of
ThUS$5,800 at December 31, 2006. Due to the
Economy and Production, through Resolution Nº
above, the legal framework and the lack of a spe-
f.1.1 Exchange Summons - Argentine Central
776, established that the export tax created by law
cific claim at the closure of these financial state-
Bank
Nº25.561 and its complements must be applied to
ments, the Company has not considered neces-
all the exports of gas, petroleum and their de-
sary to record a provision in this respect.f.1.3
The Argentine Central Bank (BCRA). Exchange
rivatives that are made from the Special customs
Ministerio de Economía y Producción. Resolución
f.1 Enap Sipetrol Argentina S.A.
Summons BCRA No. 3221. Case No. 40288/02.
Area of the Province of Tierra del Fuego (Área Ad-
MEyP Nº101/2007. Con fecha 16 de enero de 2008
“Sipetrol Argentina S.A. and Another. Law No.
uanera Especial de la Provincia de Tierra del Fu-
se interpuso recurso de reconsideración contra la
19,359”. The Argentine Central Bank (BCRA) has
ego, Antártica e Islas del Atlántico Sur). Likewise,
resolución MEyP Nº101/2007 ante el Ministerio
accused the following violations of the Ley del
it instructed the Customs Department (Dirección
de Economía y Producción de la Nación.
Régimen Penal Cambiario (Penal Exchange Law
General de Aduanas) to apply the corresponding
tax rates to the exports of crude oil, gas and their
f.1.3 Economy and Production Ministry. Resolu-
derivatives. Consequently, the Customs Depart-
tion No. 101/2007. On Januarty 16, 2008 a re-
ment, in External Note Nº56/06, dated October 18,
source was filed petitioning for a re-consider-
ing 70% of the collections for hydrocarbon ex-
2006, instructed customs to charge this item to
ation of resolution 101/2007; with the Argentine
ports during the period between January 19,
the companies exporting goods included in spe-
Economy and Production Ministry.
2001 and December 10, 2002; for an amount of
cific tariff positions, from the coming into force of
ThUS$63,008.9 (2) Presumed late entering of two
Decrees number 310/02, 809/02 and 645/04 and
f.1.4 Through Resolution Nº 1781/2006, the Ar-
exports whose date of expiry were November 11,
their complements, as appropriate.
gentine Energy Secretariat notified Enap Sipet-
Regime):
(1) Alleged omission in entering and negotiat-
2002 and December 10, 2002; for an amount of
ThUS$602.6.
rol Argentina S.A. of the application of a fine to
On November 16, 2006, Sipetrol Argentina S.A.
the company that has the Concession of the Ex-
filed an impropriety complaint (Reclamo Impro-
ploitation of the Magallanes Hydrocarbons Area
The allegations were presented to the court, all
pio) with the Ministry of Economy and production
(Concesión de Explotación Hidrocarburífera del
the evidence was submitted, and observations
and an impropriety complaint (Reclamo Impro-
Área Magallanes), YPF S.A., for incompliance
were made to the submitted evidence. Under
pio) against the Resolution Nº 776 of the Ministry
with obligations under Articles 31 and 69 sub-
these circumstances, the next step would be for
of Economy and Production and External Note Nº
headings a) and d) of law 17.319 and Resolutions
Nº 105/92, 189/80, 24/04 and 342/93.
the Exchange Summons Department of the BCRA
56 of the Customs Department, requesting that
to send the case to the Federal Capital, Economic
the questioned measures be suspended and op-
Criminal Court.
portunely revoked.
f.1.5 Federal Lower Court No. 1 of Rio Gallegos.
Criminal Secretariat No. 2. Case No. 1413/05 en-
Enap Sipetrol Argentina S.A. - YPF S.A. UTE
In spite of the impropriety complaint (Reclamo
titled “District Attorney Office of Santa Cruz.
Magallanes
Impropio) filed by the Company, subsequent to
Denunciation”. The denunciation arises from a
The Argentine Central Bank (BCRA). Exchange
the filing, on January 16, 2007, Law Nº 26.217 was
report addressed by the Energy Secretariat of
Summons BCRA No. 3582. Case No. 21.427/04. “Si-
published in the official Gazette, which extends
the Santa Cruz Province to the State District At-
petrol Argentina S.A. and Others. Law No. 19,359”.
the exports tax on hydrocarbons created by art.
torney Office, informing a hydrocarbons spill out
The Argentine Central Bank (BCRA) has accused
6 of Law Nº 25.561, specifying that this tax is also
at sea, specifically in the Magallanes area. Sev-
the following violations of the Ley del Régimen
applicable to exports made from the special cus-
eral actions were undertaken, culminating, at the
Penal Cambiario (Penal Exchange Law Regime): (1)
toms area created by Law Nº19.640. It must be
request of the District Attorney, on statements
Alleged omission in entering and negotiating 70%
pointed out that the new regulation turns ab-
being taken on February 23, 2007 of two profes-
of the collections for hydrocarbon exports during
stract the arguments presented in the impropri-
sionals, in accordance with article 294 of the
the period between March 4, 2002 and May 2,
ety complaint (Reclamo Impropio). However, the
Penal Proceedings Code. Afterwards, the court
2002; for an amount of ThUS$10,516.6 The allega-
company has insisted in their application.
ordered some other evidence and then indicted
the two professionals, who appealed with the
tions were presented to the court, which opened
the evidence submitting period.
According to company estimates, a possible
Appeals Chamber of Comodoro Rivadavia, filing
their respective defenses on October 8, 2007.
National Hydrocarbons Bureau on November 26
Currently, proceedings are under way in the trial
and December 19, 2008, respectively. Therefore,
at the Appeals Chamber.
officially, the process for changing the name of
the company has concluded, with Enap SIPET-
Regardless of the Chamber’s ruling, it will not
ROL S.A. being the new name of the Ecuadorian
undermine the equity of Enap Sipetrol Argentina
branch. On January 5, 2009, the Company’s tax-
S.A., because the attachments ordered by the
payer number was updated to feature the new
court are being placed on the accused profes-
name. The signing of the contract to change the
sionals, in the amount of ThUS$5.7 each. To date,
name with Petroproduction is still pending. We
no other type of denonciation has been made.
consider that the contingency that a premium
f.2 Ecuadorian Branch Enap Sipetrol S.A.
been eliminated almost completely.
might be charged for the change of name has
(SIPEC)
There are no other significant contingencies to
f.2.1 Subject: Use of crude oil
report as of December 31, 2008.
1.The State Comptroller Office has begun an audit
regarding 420 crude oil barrels which were used
NOTE 27 | GUARANTEES FROM THIRD PARTIES
in the remodeling of a well (Paraiso 20). However,
SIPEC has filed all the relevant justifications and ar-
As of December 31, 2008, ENAP has received
gumentations. In this regard, SIPEC explained that
certificates of deposit from suppliers or con-
the crude was used to remodel one of its wells and
tractors to guarantee compliance of service and
that it never was invoiced to PETROPRODUCCION.
construction contracts, for ThUS$25,731. Enap Si-
To date the State Comptroller Office has not issued
petrol S.A. has received from different suppliers
any resolution regarding this matter.
and contractors guarantees for approximately
ThUS$3,548.
Through denunciation by the National Hydrocarbons Bureau dated May 2008, an investigation was
The subsidiary Enap Sipetrol S.A., in accordance
launched by the District Attorney of Pichincha, who
with the Sale and Purchase Agreement entered
stepped down from conducting the trial for lack of
into on April 14, 2008 with the Egyptian com-
jurisdiction, sending the case to the District Attor-
pany Sahara North Bahariya Limited, established
ney of Orellana. The District Attorney of Orellana
a ThUS$72,489 guarantee for Sipetrol Interna-
has not issued any resolution on this case. Although
tional S.A. that expired on October 6, 2008. This
this is a criminal case, a negative ruling might have
guarantee was renewed and the new maturity
an impact in the sense of leading to the cancella-
date is March 17, 2009 (see Note 32).
tion of the PBH contract. Nevertheless, we consider
such an impact unlikely to happen.
The Egyptian company Sahara North Bahariya
Limited has established a ThUS$2,250 guaran-
f.2.2 Change of name of company
tee for Sipetrol International S.A. that expires 6
On November 12, 2008, the Superintendence
months after the end of the exploration stage,
of Companies, through resolution No. 08.Q.IJ
to cover the possibility that the Purchase Agree-
4756, qualified as sufficient the documents is-
ment is not performed and that Sipetrol Inter-
sued abroad regarding the cha nge of name of
national S.A. is forced to continue working for
SOCIEDAD INTERNACIONAL PETROLERA S.A.
Sahara North Bahariya Limited as stipulated in
to the current name of Enap SIPETROL S.A.. Af-
the concession section of the agreement (see
ter such resolution was issued, it was registered
Note 32).
on the Business Register of Quito and with the
INDEX
•
ANNUAL REPORT 2008
1 67
168
•
ANNUAL REPORT 2008
NOTA 28 | LOCAL AND FOREIGN CURRENCY
Assets and liabilities in foreign currency and those assets and liabilities that are readjusted in US dollars at December 31, 2008 and 2007, are as follows:
Assets:
Amount
Item
Currency
2008
2007
ThUS$
ThUS$
Current assets:
Cash and banks
Non-indexed Ch$
61,540
85,240
US dollars
19,806
11,739
488
-
UK Pounds
Argentine peso
2
-
Time deposit
US dollars
7,913
18,858
Indexed Ch$
-
17,119
Trade receivables
Non-indexed Ch$
567,561
849,036
US dollars
143,495
128,037
Argentine peso
Miscellaneous receivable
1,810
-
US dollars
26,192
38,074
Non-indexed Ch$
48,462
60,539
746
1,247
Indexed Ch$
Argentine peso
UK Pounds
UF
US dollars
Inventories
US dollars
Recoverable taxes
US dollars
Non-indexed Ch$
Indexed Ch$
Indexed Ch$
Prepaid expenses
-
1
28
47,297
100,709
-
1,097
843,979
1,591,800
9,887
10,590
15,151
104,859
206,272
151,426
3,074
-
Non-indexed Ch$
7,826
50,234
17,749
22,189
-
180
US dollars
US dollars
Argentine peso
-
30
Argentine peso
Non-indexed Ch$
Deferred taxes
6,943
US dollars
Non-indexed Ch$
UF
78,604
-
3,689
-
55,149
73,806
-
3,449
780
916
Argentine peso
39,643
-
Indexed Ch$
56,584
-
PROPERTY, PLANTS AND EQUIPMENTS:
Property, plants and equipments - net
1,989,104
1,794,056
Argentine peso
US dollars
281,389
-
US dollars
144,891
102,822
OTHER ASSETS:
Indexed Ch$
1,833
271
61,442
61,442
US dollars
6
8
GOODWILL
US dollars
2,670
4,582
US dollars
16,452
1,410
Indexed Ch
4,478
25,840
Indexed Ch$
LONG-TERM RECEIVABLES
Argentine peso
67
-
Non-indexed Ch$
15
-
NOTES AND ACCOUNTS RECEIVABLE FROM RELATED COMPANIES
US dollars
11,465
14,655
LONG-TERM DEFERRED TAXES
US dollars
20,296
16,581
6,520
-
Argentine peso
•
ANNUAL REPORT 2008
Current liabilities:
Up to 90 days
90 days up 1 year
2008
Item
Currency
SHORT-TERM LIABILITIES WITH BANKS AND
FINANCIAL INSTITUTIONS
US dollars
Non-indexed Ch$
2007
2008
2007
Amount
Average annual
Amount
Average annual
Amount
Average annual
Amount
Average annual
ThUS$
interest rate %
ThUS$
interest rate %
ThUS$
interest rate %
ThUS$
interest rate %
315,332
4.09
-
-
264,505
4.24
-
-
-
-
-
-
-
-
-
40,529
US dollars
64,776
5.8
-
-
-
-
-
-
LONG-TERM LIABILITIES WITH BANKS AND
FINANCIAL INSTITUTIONS - CURRENT PORTION
BONDS
US dollars
2,233
4.44
9,426
5.74
149
4.44
16,133
5.73
US dollars
-
-
2,161
4.87
4,688
6.75
2,525
4.87
UF
-
-
-
-
1,178
4.20
1,397
-
LONG-TERM LIABILITIES WITH MATURITIES
WITHIN A YEAR ACCOUNTS PAYABLE
ACCOUNTS PAYABLE
UF
336
3.70
533
5.70
1,027
3.70
997
3.70
US dollars
1,252,723
4.04
2,260,292
5.83
-
-
125,319
-
US dollars
161,029
-
-
-
-
-
-
-
Non-indexed Ch$
86,273
-
84,600
-
-
-
-
-
Argentine peso
14,579
-
-
-
-
-
-
-
8,276
-
5,540
-
-
-
-
-
US dollars
14,997
-
926
-
-
-
75
-
US dollars
1,740
7.45
949
5.96
-
-
-
-
US dollars
127
-
721
-
-
-
-
-
US dollars
2,077
16.11
1,403
16.11
-
-
363
16.11
SUNDRY DEBTORS
NOTES AND ACCOUNTS PAYABLE TO RELATED
COMPANIES
Non-indexed Ch$
US dollars
798
7.58
601
7.08
-
-
136
7.58
US dollars
8,805
4.27
6,026
4.27
3,562
4.27
4,287
4.27
US dollars
1,750
6.43
1,715
6.43
605
6.43
496
6.43
US dollars
1,022
10.01
760
10.01
28
10.01
220
10.01
Non-indexed Ch$
ACCRUALS
57
-
-
-
-
-
-
-
US dollars
89,299
-
12,628
-
-
-
5,881
-
Indexed Ch$
15,758
-
21,302
-
-
-
-
-
Non-indexed Ch$
5,863
-
15,333
-
11,385
-
3,172
-
AR$
1,772
-
-
0.00
-
-
-
-
61
-
-
-
-
-
-
-
Non-indexed Ch$
13,649
-
35,628
-
-
-
-
-
US dollars
27,364
-
7,326
0.00
-
-
-
-
Indexed Ch$
40,486
-
305
0.00
-
-
-
-
4,529
-
-
-
-
-
-
-
145,221
5.16
187,253
3.79
-
-
UK £
WITHHOLDINGS
Argentine peso
NOTES PAYABLE
US dollars
117,725
3.79
UNEARNED INCOME
US dollars
71
-
-
-
-
-
-
-
-
-
71
-
-
-
-
-
43,408
-
32,974
-
-
-
-
-
5,386
-
-
-
-
-
-
-
-
-
4,973
-
-
-
-
-
2,105,276
-
2,488,102
-
460,790
-
155,435
-
114,118
-
141,172
-
11,385
-
43,701
-
336
-
533
-
2,205
-
2,394
-
Non-indexed Ch$
OTHER CURRENT LIABILITIES
US dollars
Argentine peso
DEFERRED TAX
US dollars
Total current liabilities
US dollars
Non-indexed Ch$
UF
Argentine peso
26,266
-
-
-
-
-
-
Indexed Ch$
56,244
-
21,607
-
-
-
-
-
61
-
-
-
-
-
-
-
UK Pounds
INDEX
16 9
170
•
ANNUAL REPORT 2008
Long-term liabilities:
Currency
Item
1 to 3 years
Amount
Average
3 to 5 years
Amount
Average
5 to 10 years
Amount
Average
10 years and thereafter
Amount
Average
ThUS$
ThUS$
ThUS$
ThUS$
Annual
US dollars
50,000
Bonds
US dollars
UF
US dollars
649
Long-term sundry creditors
UF
US dollars
Long-term notes and accounts payable to related companies US dollars
US dollars
US dollars
US dollars
US dollars
US dollars
Non-indexed Ch$
US dollars
Non-indexed Ch$
Indexed Ch$
US dollars
4,767
543
51,092
6,154
2,080
2,648
5,672
20,896
1,843
21,483
8,056
84,242
US dollars
UF
Non-indexed Ch$
Indexed Ch$
Currency
Item
LONG-TERM NOTES AND ACCOUNTS PAYABLE TO RELATED
320,000
0.00
0.00
LIBOR 180
+ 1.5
3.70
0.00
0.00
16.11
7.58
10.01
6.43
4.27
0.00
0.00
0.00
0.00
-
Annual
4.44
-
290,000
6.75
109,546
4.25
433 LIBOR 180 + 1.5
2,992
44,244
1,025
1,447
1,858
5,788
22,719
2,782
7,928
142
3.70
0.00
0.00
16.11
7.58
10.01
6.43
4.27
0.00
0.00
0.00
0.00
-
Annual
Interest rate %
Interest rate
%
0.00
-
150,000
1,082
0.00
LIBOR 180
5,793
201,372
15,031
6,267
7,771
15,848
39,344
25,733
14,253
214
+ 1.5
3.70
0.00
0.00
16.11
7.58
10.01
6.43
4.27
0.00
0.00
0.00
0.00
-
1,065
139,835
1,349
1,974
8,848
10,552
51,814
30,658
34,419
-
0.00
0.00
0.00
LIBOR 180
+ 1.5
0.00
0.00
0.00
0.00
7.58
10.01
6.43
4.27
0.00
0.00
0.00
0.00
-
-
-
-
-
-
-
-
-
245,459
4,767
1,843
8,056
-
687,656
112,538
2,782
7,928
-
436,929
5,793
25,733
14,253
-
215,437
30,658
34,419
-
1 to 3 years
Amount
Average
3 to 5 years
Amount
Average
5 to 10 years
Amount
Average
ThUS$
ThUS$
10 years and thereafter
Amount
Average
ThUS$
Annual
ThUS$
Annual
100,000
290,000
128,346
433
Interest rate %
0.05%
0.07%
0.04%
LIBOR 180 +
270,000
150,000
1,082
Interest rate %
5.48%
0.05
LIBOR180+1.5%
1,281
Interest rate %
LIBOR 180 +
1.5%
0.06%
-
3,858
-
1.5%
0.06%
-
8,167
-
0.06
-
-
1.5%
-
7,896
0.16%
3,210
0.16%
17,901
0.16
-
-
US dollars
US dollars
US dollars
US dollars
US dollars
Indexed Ch$
US dollars
1,980
2,532
5,396
19,748
126,359
12,994
79,549
0.08%
0.10%
0.06%
0.04%
-
1,810
2,340
5,433
21,677
11,392
142
0.08%
0.10%
0.06%
0.04%
-
4,959
6,210
15,925
48,808
42,749
285
0.08
0.10
0.06
0.04
-
3,192
4,218
11,757
12,710
78,868
88,014
-
0.08
0.10
0.06
0.04
-
-
-
-
-
-
-
-
-
US dollars
UF
Non-indexed
244,109
5,501
329
-
425,045
132,204
-
-
515,170
8,167
-
-
112,026
-
112,026
-
Ch$
Indexed Ch$
12,994
-
11,392
-
42,749
-
88,014
88,014
Annual
649
Interest rate %
0.00%
LIBOR 180 +
UF
Non-indexed
5,501
329
Ch$
US dollars
LIABILITIES WITH BANKS AND FINANCIAL INSTITUTIONS US dollars
BONDS
US dollars
UF
LONG-TERM NOTES PAYABLE
US dollars
LONG-TERM SUNDRY CREDITORS
4.44
Annual
Interest rate %
Interest rate %
Annual
COMPANIES
LONG-TERM ACCRUALS
OTHER LONG-TERM LIABILITIES
NOTA 29 | SANCTIONS
•
ANNUAL REPORT 2008
S.A., a letter addressed to the Exploration Direc-
tor of the National Iranian Oil Company (NIOC),
During the years ended December 31, 2008 and
informing him that a unanimous decision had
2007, neither the Company nor its directors or
cember 31, 2008.
been made to not continue with negotiations
for developing the Band-e-Karkheh oil field. The
managers were subject to sanctions from the
Superintendency of Securities and Insurance.
b) To temporarily suspend for 2009 the policy
decision is based on the fact that they have been
unable to reach an agreement with NIOC on the
NOTA 30 | SUBSEQUENT EVENTS
Development Plant needed to develop the re-
lated oil field.
On January 15, 2009 ENAP issued bonds of UF
9,750,000 over 10 years, with a maturity date of
that ENAP must transfer minimum of resources
Considering that contractual obligations have
January 12, 2019 with interest payments due every
to the State, whether as income tax (40%) and/or
been met, NIOC was informed that the clause
six months, at an annual rate of UF+4.33%. The
as profit sharing consisting of 14% of profitability
granting the right to recover the exploration
bonds were placed at 101.72% over par value.
over equity, calculating equity as retained earn-
expenses and the remuneration fee, would be
envoked, in accordance with the terms of the
ing from prior periods.
Exploration Services Agreement entered into by
The proceeds from this issuance will be allocated to restructur e ENAP liabilities.
As indicated in Note 17, OMV, in its capacity as
and between the consortium and NIOC.
operator of the Merh block, and acting on behalf
of the consortium formed with Repsol and Enap
No other events affecting the financial statements
Sipetrol S.A., delivered on January 24, 2009,
have occurred between January 1, 2009, and the
through its subsidiary Sipetrol Internacional
date of issuance of these financial statements.
NOTA 31 | ENVIRONMENT
During the year ended December 31, 2008, ENAP and its subsidiaries have incurred environment related disbursement as shown in the following tables:
ENAP
Environmental impact projects, mitigations and monitoring of environmental commitments.
2008
ThUS$
9,145
Environmental Approval of projects by SEIA and specific associated studies
595
Effluent treatment and disposal system
891
Solid waste handling and treatment system
127
Environmental incidents mitigate system
110
Other environmental projects expenses
62
Totals
10,930
INDEX
17 1
1 72
•
ANNUAL REPORT 2008
Enap Sipetrol S.A.
Environmental investments related with projects
Operating expense of environmental management unit
2008
ThUS$
1,258
606
Environmental expense of operating units
1,233
Total
3,097
Enap RefinerÍaS S.A.
2008
ThUS$
a) Investments related with projects:
New Alkylation Unit - Aconcagua
18,941
Production of low sulfur diesel
11,549
Improvement in treatment of water oils
4,981
Mitigation of environmental impact due to operations
1,326
Reduction of wastewater emission
Reduction of particle emission
Subtotal
956
93
37,846
b) Environmental Unit Operating Expenses:
Environmental unit 697
697
Disposal of waste and others
3,922
Subtotal
4,619
c) Environmental expenses of operating units:
Acid plant 377
377
Sulfur plant 164
164
Gasoline desulfurizing plant 4,935
4,935
Diesel desulfurizing plant 51
51
Acid water striper (SWS) 180
180
Effluent treatment
682
Subtotal
Total
6,389
48,854
•
ANNUAL REPORT 2008
NOTA 32 | PETROLEUM OPERATION CONTRACTS
Enap Sipetrol S.A. has the following drilling and exploration contracts in force concerning their activities outside Chile:
Sipetrol's ownership percentage
2008
2007
%
%
Project
Country
OPERADOR
Area Magallanes
Argentina
(a)
50.00
50.00
Argentina
Repsol - YPF
(b)
50.00
50.00
Pampa el Castillo
Argentina
(c)
100.00
100.00
Cam 2A Sur
Argentina
(d)
50.00
50.00
North Bahariya
Egipto
NORPETCO ( Joint Venture Company)
(e)
50.00
50.00
East Rast Qattara
Egipto
Petroshahd ( Joint Venture Company)
(f)
50.50
-
Paraíso, Biguno, Huachito
Ecuador
Enap Sipetrol S.A.- Sucursal Ecuador
(g)
0
-
Mauro, Davalos, Cordero
Ecuador
Enap Sipetrol S.A.- Sucursal Ecuador
(g)
0
-
(d) Cam 2A Sur
a. a. Drilling
holds for exploiting hydrocarbons in the area
The detail of the drilling projects is as follows:
called Campamento Central - Cañadón Perdido,
As a result of regulatory decision Nº 14 of Janu-
which corresponds to the San Jorge Cuenca Gulf
ary 29, 1999, YPF and Sipetrol Argentina S.A. won
(a) Area Magallanes
Basin Central Oilfield - Cañadón Perdido, in the
the right to explore area CAM 2A Sur. On Octo-
On January 4, 1991, Sipetrol Argentina S.A. and
province of Chubut, Argentina, which is subject
ber 7, 2002, Enap Sipetrol Argentina S.A. and YPF
Yacimientos Petrolíferos Fiscales S.A. entered
to Law Nº24.145 and its complements and regu-
S.A. entered into a UTE, located in the Province
into a Unión Transitoria de Empresas (UTE, simi-
lations. The operator is YPF S.A.
of Tierra del Fuego.
carrying out hydrocarbon development and
Board meeting No. 222 held on February 27, 2008
(e) North Bahariya
drilling activities in the Area Magallanes, a zone
authorized the launching of a process aimed at
On June 1, 2004, a “development plan” was ap-
located in the eastern mouth of the Magallanes
selling the interest owned by Enap Sipetrol Ar-
proved, which meant that on September 1, pro-
Strait, Argentina.
gentina S.A. in the project.
duction was to start and the project would be in
Enap Sipetrol Argentina S.A., as operator of this
This investment is classified within Other cur-
ment", the operator company Norpetco was cre-
contract, is responsible for performing all opera-
rent assets, under Current assets.
ated, 50% of which belonged to Egyptian Gener-
(c) Pampa del Castillo - La Guitarra
50% to the consortium Sipetrol, IPR and INA.
lar to a joint venture) contract, with the aim of
the drilling phase. Through a "Concession Agree-
al Petroleum Corporation (EGPC) and the other
tions and activities in this area.
(b) Campamento Central - Cañadón Perdido
On September 25, 2001, Pecom Energía S.A. as-
On December 2000, Enap Sipetrol S.A. signed
signed to Sipetrol Argentina S.A. 100% of the rights
On August 28, 2007, Board of Directors Meeting
an agreement with YPF S.A. whereby the latter
to the explotation concession of the hydrocarbon
Nº 214, authorized the beginning of the North
assigns and transfers to Enap Sipetrol Argentina
area referred to as Pampa del Castillo La Guitarra,
Bahariya project sales process.
S.A. 50% of the concession that YPF S.A.
located in the province of Chubut, Argentina.
INDEX
173
1 74
•
ANNUAL REPORT 2008
On April 14, 2008 the subsidiary Sipetrol Inter-
Oil Search Ltd., won on April 16, 2003 the East
dor - Petroproducción, to mine and develop the
national S.A. and the Egyptian company Sahara
Ras Qattara area.
oilfields Paraíso, Biguno, Huachito (PBH) and
Mauro Dávalos Cordero (MDC), located in the
North Bahariya Limited entered into a Sale and
eastern Ecuador basin. By means of this specific
Purchase Agreement whereby Sipetrol Interna-
The formal contract for the concession was signed
tional S.A. committed to assign to the latter its
on March 30, 2004 with the Egyptian Ministry of
service contract, the Company committed to
entire interest in the North Bahariya Block lo-
Petroleum, the participants being Sipetrol Inter-
making investments in the development of these
cated in Egypt’s Western Desert.
national S.A., Egyptian branch, 50.5% (operator)
fields for an amount estimated in US$ 90 million,
and Oil Search Ltd., 49.5%.
which include drilling 16 wells (9 in PBH and 7 in
MDC), the construction of a production station
For the sale to be completed a final approval of
the Egyptian government, through the Petro-
Exploration started in December 2007.
in MDC, the adaptation of facilities and a camp.
At the same time, it acquired the exploration and
leum Ministry, is required.
This investment is classified within Other cur-
On August 28, 2008, Oil Search Ltd. sold its en-
operations rights, assuming 100% of the opera-
tire interest to Kuwait Energy Company.
tion and management costs of the fields.
rent assets, under Current assets.
(g) Paraíso, Biguno, Huachito y Mauro, Dava-
On 08.08.06, the MDC field contract with
(f) East Rast Qattara
los, Cordero
PETROECUADOR was modified, and ENAP SIPEC
Following the bidding process opened in 2002
On October 7, 2002, a contract was signed with
agreed to increase the investment program to
by the Egyptian General Petroleum Company
Empresa de Petróleos del Ecuador - PetroEcua-
include the drilling of 7 wells and expansion of
(EGPC) to attract offers for various areas in the
dor and its subsidiary Empresa Estatal de Ex-
production facilities. These new wells will certify
Western Desert, the subsidiary Sipetrol Interna-
ploración y Producción de Petróleos del Ecua-
additional reserves, increasing current reserves
tional S.A., along with the Australian company
from 31.6 to 57.0 million barrels of crude oil.
b. Exploration
The detail of the exploration de Enap Sipetrol S.A. projects is as follows:
Sipetrol's ownership percentage
PROJECT
COUNTRY
OPERATOR
(a)
2008
%
33.33
2007
%
33.33
E2 (Ex CAM 3 y CAM1)
Argentina
Enap Sipetrol Argentina
La Invernada
Argentina
Wintershall Energía S.A.
(b)
50.00
50.00
East Rast Qattara
Egipto
Sipetrol International S.A.
-
50.50
Bloque 2 – Romana
Egipto
Sipetrol International S.A.
(c)
40.00
40.00
Bloque 8 - Sidi Abd
Egipto
Edison International SPA El Rahman
(d)
30.00
30.00
Bloque Mehr
Irán
OMV (Irán) Onshore Exploration Gmg
(e)
33.00
33.00
•
ANNUAL REPORT 2008
(a) E2 ( Ex CAM 3 y CAM 1)
ment and possible exploitation of the new E2
area. In March 2008 Wintershall Energía S.A.
The CAM-1 (for Cuenca Austral Marina 1) area was
area, the Energy Secretariat accepted transfer-
(the operator of La Invernada area) expressed an
awarded on September 4, 2003 to Enap Sipetrol
ring the CAM-3 area to ENARSA which, together
interest to participate in the divesting process. A
Argentina S.A. and Repsol- YPF S.A., by the Ener-
with the ex CAM-1 area makes up the mentioned
meeting was held, also in March 2008; no offers
gy Secretariat of the Ministry of Federal Planning,
E2 area, subject of the agreement. Likewise, the
were received for La Invernada. Due to the situ-
Public Investment and Services, who accepted
Energy Secretariat accepted to compensate the
ation described in the preceding paragraph, in
the offer made by the companies during the In-
pending committed investments in the CAM-3
mid April 2008 the Company discussed with the
ternational Public Tender to bid for this project.
area with the commitment to drill a second ex-
Operator its intention to no larger explore the
ploration well within the new E2 area.
area, and the Operator expressed its agreement.
the southern part of Argentina and is adjacent to
On March 31, 2008, the parties entered into the
On September 24, 2008, the Operator filed with
other concessions where currently Enap Sipetrol
Contrato de Unión Transitoria de Empresas for
the Subsecretaria de Hidrocarburos y Energía of
The CAM-1 area is located in the Atlantic Ocean in
Argentina S.A. explores and produces hydrocar-
the Exploration and Exploitation of Hydrocar-
the Neuquen Province a request to no longer ex-
bons (Area Magallanes, CAM 2A Sur and CAM 3).
bons in the E2 area, to regulate the rights and ob-
plore the La Invernada exploration area. At the
ligations between Enap Sipetrol Argentina S.A.,
date of issuance of these financial statements, the
YPF S.A., and ENARSA as partners and fellow
Company is awaiting the reply from the Subsecre-
have formed a UTE to carry out hydrocarbon ex-
participants in the exploration and exploitation
taria, however no amounts have been capitalized
ploration in this area and to exploit it commer-
of the E2 area. The Contrato de Unión Transito-
in the financial statements relating to this project.
cially if oil is found.
ria de Empresas was registered on April 17, 2008
Enap Sipetrol Argentina S.A. and Repsol- YPF
with the General Inspection of Justice, under No.
(c) Area 2 - Romanna
During October 2005 the Company received a
6, on Book 2, devoted to collaboration contracts
On December 2006, Enap Sipetrol through its Sipet-
communication from the Energy Secretariat,
among companies.
rol Internacional S.A. subsidiary obtained two explo-
(b) La Invernada
and approvals set by the Egyptian authorities.
informing Enap Sipetrol Argentina S.A. that the
CAM-1 area would be registered by ENARSA (a
ration contracts, subject to the terms, procedures
state company). This because the area had been
This section was opened for bidding by the Hy-
assigned to Enap Sipetrol Argentina S.A. and YPF
drocarbons Department of the Province of Neu-
Area 2 on land will be operated by Sipetrol Interna-
S.A. in 2003 by the Energy Secretariat, but ap-
quén on June 9, 2003 and won by Wintershall En-
cional S.A. with 40% participation in a consortium
proval by the Executive Branch (Argentine Presi-
ergía S.A. (WIAR) effective October 29, 2003. The
with PTT Exploration and Production Public Com-
dency) was pending.
exploration contract was signed by WIAR and
pany Limited ("PTTEP") and Centrica, with 30% par-
the Department of Hydrocarbons on November
ticipation each. This area is located to the north of
On September 26, 2006, an association agree-
11, 2003. The Company, after evaluating the pos-
SINAB, with a surface of 6,200 km2.
ment was signed between ENARSA, Enap Sipet-
sibilities of finding oil in this area, entered into
rol Argentina S.A. and YPF S.A., whereby the par-
a Joint Study and Bidding Agreement with WIAR
On September 18, 2007, the Concession Agree-
ties agree to sign a UTE agreement where each
to obtain an entry option for 50% of the shares
ment for the area was signed, beginning the explo-
party has a 33.33% participation; the agreement
in ground floor conditions. On December 21,
ration stage.
is still being negotiated. ENARSA, as owner of
2004, Decree 2949 of the Province of Neuquén
CAM 1 contributes this area and ENAP SIPETROL
approved the assignment of 50% of the share of
(d) Area 8 - Sidi Abd El Rahman
ARGENTINA S.A., jointly with YPF S.A., contrib-
Wintershall Energía S.A. in the Exploration Con-
Area 8, off-shore, will be operated by Edison Inter-
ute CAM 3. Formally, Sipetrol and Repsol YPF
tract and Permit to Enap Sipetrol Argentina S.A.
national SPA with 40% participation in a consor-
reversed CAM-3 to the Secretaría de Energía (En-
tium with PTT Exploration and Production Public
ergy Secretariat) for its subsequent adjudication
On March 29, 2005 the UTE contract was signed
Company Limited ("PTTEP") and Sipetrol Interna-
by the Secretariat to new the consortium.
and registered under No. 74 of Book 01 dated May
tional S.A., with 30% participation each. This area
10, 2005 of the General Inspection of Justice.
In the framework of the agreement signed be-
is located to the north of Egypt, in the Mediterranean Sea, with a surface of 4,294 km2.
tween ENARSA, YPF S.A. and Enap Sipetrol Ar-
Enap Sipetrol Argentina S.A. has begun the
gentina S.A. for the joint exploration, develop-
process of divesting its interest in La Invernada
INDEX
1 75
176
•
ANNUAL REPORT 2008
On September 18, 2007, the Concession Agree-
Sipetrol Internacional S.A., a letter addressed
3 years. Ownership of this area will be 50% for
ment for the area was signed, beginning the ex-
to the Exploration Director of the National Ira-
Enap and 50% for Methanex Co. This agreement
ploration stage.
nian Oil Company (NIOC), informing him that
requires by approval the Chilean government. At
a unanimous decision had been reached to not
December 31, 2008, Methanex Co. had contrib-
(e) Bloque Mehr
continue with negotiations for developing the
uted US$32.6 million to an escrow account, and
Enap Sipetrol S.A. through its Sipetrol Internation-
Band-e- Karkheh oil field. The decision is based
is awaiting the final approval of the Chilean gov-
al S.A. subsidiary, has a 33% share in the Mehr Area
on the fact that they have been unable to reach
ernment.
together with Repsol YPF and OMV, the latter be-
an agreement with NIOC on the Development
ing the Operator. The area is located adjacent to
Plant needed to develope the related oil field.
Lenga Area
Resolution No. 19, dated June 4, 2008, of the
the large Arwaz oilfield. Since obtaining the contract in 2001, the area has been in the exploration
Considering that contractual obligations have
Mining Ministry approved a Special Operation
phase and one discovery has been made.
been met, NIOC was informed that the clause
Contract to be entered into by the Mining Min-
granting the right to recover the exploration
istry on behalf of the Chilean State and an entity
expenses and the remuneration fee, would be
formed by Apache Chile Energia SPA and ENAP.
Sipetrol Internatio nal S.A. was authorized to
envoked, in accordance with the terms of the
The contract is for the exploration and develop-
begin, however the sale did not materialize due
Exploration Services Agreement entered into by
ment of hydrocarbon fields in the Lenga area,
to complications with the financing of the only
and between the Consortium and NIOC.
located in Chile’s Magallanes Region and in the
During 2005, the sale of the interest owned by
Chilean Antartic. This contract is documented
company that submitted an offer. On June 30,
2007, NIOC declared the Area commercial, lead-
Regardless of the situation described in the pre-
by a public deed dated April 28, 2008. The entity
ing to the negotiation of a development plan for
ceding paragraph, for conservatism and based a
will be formed by a 50% interest by Apache Chile
the Area and the respective development con-
n the collection resources available to manage-
Energia SPA and a 50% interest by ENAP. During
tract. In December 2008, NIOC raised questions
ment, Enap Sipetrol S.A., through its subsidiary
2008, Apache Chile Energia SPA paid ThUS$6,075
about the development plan proposal prepared
Sipetrol Internacional S.A., established a provi-
to ENAP as bond to formalize the Special Opera-
by the Consortium (Siperol, OMV, and Repsol).
sion reserving ThUS$27,262 of related capitalized
tion Contract.
These questions suggested that the develop-
cost recorded in Other current assets (Assets for
ment plan proposal is not economically viable
sale) at December 31, 2008.
for the consortium which, gave rise to the unani-
Coirón Area
Resolution No. 15, dated June 4, 2008, of the Min-
mous decision to abandon the development
ENAP’S JOINT OPERATION AGREEMENTS IN
ing Ministry approved a Special Operation Con-
plan proposal and to reserve the right to request
CHILE:
tract to be entered into by the Mining Ministry on
reimbursement of the expenses incurred in ex-
behalf of the Chilean State and an entity formed
plorations, in accordance with the exploration
Dorado Riquelme Area:
by Pan American Energy Chile Limitada (PAE)
services contract.
On May 5, 2008, ENAP signed an agreement with
and ENAP. The contract is for the exploration and
Methanex Co. to accelerate gas exploration and
development of hydrocarbon fields in the Coiron
OMV, in its capacity of operator of the Merh
production in the Dorado Riquelme Area and to
area, located in Chile’s Magallanes Region and in
block, and acting on behalf of the consortium
establish a new source of natural gas. Under this
the Chilean Antartic. This contract is documented
formed with Repsol and Enap Sipetrol S.A., deliv-
agreement, Methanex Co. is expected to con-
ered on January 24, 2009, through its subsidiary
tribute US$100 million as capital, over the next
will be formed by a 50% interest by Pan Ameri-
can Energy Chile Limitada and a 50% interest by
ENAP. During 2008, Pan American Energy Chile
Limitada paid ThUS$5,000 to ENAP as bond to
formalize the Special Operation Contract.
Caupolicán Area
As a result of a Mining Ministry launched national and international bidding process for Special Petroleum Operations Contracts, designed
to explore and develop hydrocarbon fields, the
Caupolican area, which is located in the Magallanes Region and in the Chilean Antartic, was
granted exploration and development by (Resolution No. 1766 of 2007) an entity formed by
Greymouth Petroleum and ENAP. However this
contract has not yet received approval from the
Chilean government.
NOTA 33 | ADOPTION OF IFRS
Chile is committed to developing a convergence
plan aimed at fully adopting International Financial Reporting Standards (IFRS). In accordance
with the Chilean Institute of Accountants and
Circular No. 427 issued on December 28, 2007 by
the Superintendence of Securities and Insurance,
the Company and its subsidiaries will adopt the
IFRS beginning on January 1, 2009.
As a result of adoption, changes will occur in equity balances at January 1, 2009 and the determination of results in future years will be affected.
Also, in 2009, for comparison purposes, the 2008
financial statements will have to be presented
under IFRS, and thus they could differ from these
financial statements.
INDEX
•
ANNUAL REPORT 2008
17 7
178
•
ANNUAL REPORT 2008
EG
NR
AU
P PGOR O
DU
E PE M
O PF RCEO
SA
MSP AE N IAEPS •• M
A ENM
NO
UR
A ILA RAE N
PO
UA
R TL 2 0 0 8
BALANCE SHEETS
>>Independient autor´s report
>>Certificado Inspectores de Cuenta Corfo
>>Balance sheets
>>Statements of income
>>Statements of cash flows
>>Notes to the financial statements
INDEX
pag. 180
pag. 181
pag. 182
pag. 184
pag. 185
pag. 187
179
180
•
ANNUAL REPORT 2008
EMPRESA NACIONAL DEL PETROLEO
Independient autor´s report
INDEX
•
ANNUAL REPORT 2008
1 81
182
•
ANNUAL REPORT 2008
EMPRESA NACIONAL DEL PETRoLEO
Balance sheets
ASSETS
At december 31,
CURRENT ASSETS
Cash and banks
2008
ThUS$
8,522
2007
ThUS$
3,538
Time deposits
-
6,281
Marketable securities, net
-
17,119
Trade receivables, net
47,937
37,130
Miscellaneous receivables, net
10,435
16,620
2,022,279
2,748,435
70,738
113,752
7,826
50,255
844
929
Inventories, net
Recoverable taxes
Prepaid expenses
Deferred taxes 35,621 Other current assets
TOTAL CURRENT ASSETS
35,621
61,749
6,809
2,265,951
3,000,868
Land
1,676
1,676
2,057,809
2,032,416
37,984
36,408
44,622
50,915
(1,764,466)
(1,728,689)
377,625
392,726
712,490
969,283
53,778
53,778
NET PROPERTY, PLANTS AND EQUIPMENT
OTROS ACTIVOS
4,493
6,431
186,144
200,480
Deferred taxes
17,250
3,243
Other
56,930
92,520
TOTAL OTHER ASSETS
1,031,085
1,325,735
TOTAL ASSETS
3,674,661
4,719,329
The accompanying notes are an integral part of these stand-alone financial statements
•
ANNUAL REPORT 2008
EMPRESA NACIONAL DEL PETRoLEO
BALANCE SHEETS
LIABILITIES
At december 31,
CURRENT LIABILITIES:
2008
ThUS$
579,837
2007
ThUS$
-
Long-term liabilities with banks and financial institutions - current portion
2,382
4,515
Bonds payable
5,866
6,083
Other long-term liabilities, current portion
Accounts payable
Notes payable
1,172
1,323
1,258,210
2,161,799
304,978
145,221
1,012
1,095
11,228
20,933
Accruals
41,652
22,864
Withholdings
11,228
10,986
Income tax
43,065
35,088
-
6,043
Deferred taxes
3,745
765
2,264,375
2,416,715
370,000
370,000
Bonds payable
549,546
568,346
Notes payable
3,229
3,445
12,454
16,019
TOTAL CURRENT LIABILITIES
LONG-TERM LIABILITIES:
Notes and accounts payable to related companies, long-term
Accruals
TOTAL LONG-TERM LIABILITIES
1,843
2,360
127,804
273,464
84,100
79,407
1,148,976
1,313,041
EQUITY:
Paid-in capital
1,182,700
932,700
Other Reserves
(50,329)
(68,109)
86,730
75,350
RETAINED EARNINGS:
Accumulated gains
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
INDEX
(957,791)
49,632
261,310
989,573
3,674,661
4,719,329
1 83
18 4
•
ANNUAL REPORT 2008
Statements of income
OPERATING REVENUE
Operating Costs
GROSS (LOSS) PROFIT
Selling and Administrative Expenses
OPERATING (LOSS) PROFIT
NON-OPERATING INCOME (EXPENSES):
Financial income
Other non-operating income
Equity in loss of equity method investees (less)
Financial expenses (less)
Other non-operating expenses (less)
NON-OPERATING (EXPENSE) INCOME, NET
(LOSS) INCOME BEFORE INCOME TAXES
INCOME TAX BENEFIT (EXPENSES)
NET (LOSS) INCOME FOR THE YEAR
For the years ended december 31,
2008
2007
ThUS$
ThUS$
919,088
904,600
(922,752)
(787,922)
(3,664)
116,678
(33,550)
(30,163)
(37,214)
86,515
(1,035,617)
223,167
16,625
29,716
(1,107,746)
(170,834)
(6,675)
(19,870)
(1,072,831)
(1,072,831)
25,970
107,280
34,295
45,571
(8,854)
(127,611)
(5,535)
(19,176)
112,485
112,485
115,040
(957,791)
(62,853)
49,632
•
ANNUAL REPORT 2008
Statements of cash flows
For the years ended december 31,
2008 ThUS$
2007 ThUS$
12.024.601
6.930.244
226.889
105.578
7.478
13.852
23.485
6.175
(12.669.404)
(6.484.746)
(158.486)
(105.432)
(48.939)
(127.076)
(3.324)
(2.530)
(123.736)
(68.409)
(721.436)
267.656
CASH FLOWS FROM OPERATING ACTIVITIES:
Collection from trade accounts receivable
Financial income
Dividends and other distributions received
Other income
Payment to suppliers and personnel
Interest paid
Income tax paid
Other expenses paid
Value added tax and other taxes paid
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of shares
Borrowings
Repayment of loans
Total net cash provided (used) by financing activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales of property, plants and equipment
250.000
1.849.863
(1.274.501)
825.362
90.685
(103.874)
(13.189)
6.000
-
Sales of investment in related company
435
-
Collection of loans in related companies
134.064
134.547
Collection of other loans in related companies
Other investment income
Additions to property, plants and equipment
Payment of capitalized interest
Investments
Loans to related companies
Other loans to related companies
Other investing activities
Total net cash flows used in investing activities
96.877
-
6.061
970
(92.773)
(115.510)
(95)
-
(20.440)
(13.169)
(128.957)
(270.684)
(59.615)
-
(7.316)
(1.003)
(65.759)
(264.849)
TOTAL NET CASH FLOW FOR THE YEAR
38.167
(10.382)
OPENING BALANCE OF CASH AND CASH EQUIVALENTS
26.938
37.320
ENDING BALANCE OF CASH AND CASH EQUIVALENTS
65.105
26.938
INDEX
185
186
•
ANNUAL REPORT 2008
STATEMENTS OF CASH FLOWS
RECONCILIATION BETWEEN NET CASH FLOWS FROM OPERATING ACTIVITIES AND NET INCOME FOR THE YEAR
INCOME FROM SALE OF ASSETS:
Profit on sale of property, plants and equipment
CHARGES (CREDITS ) TO INCOME NOT REPRESENTING CASH FLOWS:
Depreciation
Accruals and write-offs
Equity in loss equity-method investees
Net foreign exchange difference 19,870 19,176
Other credits to income that do not represent cash flows
Other charges to income that do not represent cash flows
DECREASE (INCREASE) IN ASSETS AFFECTING CASH FLOW:
Trade receivables
Inventories
Other assets
INCREASE (DECREASE) IN LIABILITIES AFFECTING CASH FLOW:
Accounts payable related to operating income
Interest payable
Income tax payable, net
Other accounts payable related to non-operating income
Value added tax and other taxes payable (net)
2008
2007
ThUS$
ThUS$
(957,791)
49,632
-
(5,544)
58,160
25,599
(16,625)
1,107,746
19,870
64,099
(34,295)
8,854
19,176
(11,526)
33,060
(27,049)
2,948
10,883,863
22,010
29,215
(1,998,414)
26,199
8,943
(11,749,717)
5,134
(163,979)
(2,668)
(3,787)
(721,436)
2,204,410
16,919
(64,223)
27
(4,026)
267,656
•
ANNUAL REPORT 2008
Notes to the financial statements
NOTE 1 | REGISTRATION IN THE SECURITIES
This treatment does not modify the net income
REGISTER
for the year or equity.
f. Marketable securities
Correspond to investments in units of fixed- income mutual funds valued at the unit value at
On October 4, 2002, Empresa Nacional del Petróleo (ENAP) was registered in the Securities Regis-
These financial statements have been issued
ter of the Superintendencia de Valores y Seguros
only for purposes of stand -alone analysis of
year-end.
g. Resale agreements
(Superintendency of Securities and Insurance),
the Company and, therefore, they should be
under N°783. Accordingly, the Company is sub-
read along with the consolidated financial state-
Investments acquired under resale agreements
ject to the regulations of the Superintendency of
ments, which are required by generally accepted
are recorded consistently with time deposits and
Securities and Insurance.
accounting principles in Chile.
are presented in Other current assets.
ENAP was created by Law 9,618 of June 19, 1950
c. Basis of presentation
h. Allowance for uncollectible accounts
and is owned by the Chilean Government. Pur-
Trade receivables are presented net of estimates
suant to that law and subsequent amendments,
In accordance with Exempt Resolution No.190 is-
for uncollectible accounts. The estimate has
it is engaged mainly in the exploration, exploita-
sued by the Internal Revenue Service (IRS) dated
been calculated based on the aging of accounts
tion or processing of hydrocarbon deposits. It is
October 1, 2004 and Communication No.11,108
receivable.
authorized to conduct that business in Chile and
issued by the Superintendency of Securities
i. Inventories
abroad. It is also the parent company of the fol-
and Insurance dated November 26, 2004, the
lowing subsidiaries: Enap Refinerías S.A., Enap Si-
Company was authorized to keep its accounting
Inventories of crude oil and finished products are
petrol S.A. and Petro Servicio Corp. S.A. and owns
records in US dollars under the terms and condi-
valued at their direct acquisition or production
a branch office in Argentina.
tions required by Article 18, subsection 3° of the
cost. The value of inventories does not exceed
Tax Code, as from January 1, 2005.
their net realizable value. Sales prices of finished
The Enap Refinerías S.A. subsid iary, is a closely
products and replacement costs of crude oil have
held corporation, voluntarily registered in the
d. Basis of conversion
Securities Register of the Superintendence of Se-
Transactions performed during the year in
been considered for these purposes.
curities and Insurance, under Nº 833, as of June
j. Property, plants and equipment
25, 2004.
index- linked unit of account) or in foreign cur-
Property, plants and equipment are shown at ac-
rencies other than the US dollar, are recorded at
quisition costs.
The Enap Sipetrol S.A. subsidiary, is a closely held
the observed dollar exchange rate at the date of
corporation, voluntarily registered in the Securi-
transaction.
Investments in oil fields for development and drilling
ties Register of the Superintendence of Securities
and Insurance, under Nº 1005, as of June 23, 2008.
are presented in Construction and infrastructure.
Assets and liabilities at year-end which are in
Exploration investments consist of disbursements
NOTE 2 | CRITERIOS CONTABLES
index-linked unit of account) or any foreign cur-
and contributions used to cover the acquisition
rency other than the US dollar, are shown at the
of assets and/or the development of exploratory
a. Accounting period
observed dollar exchange rate at year-end, ac-
wells. These costs are maintained as exploration
These financial statements cover the years end-
cording to the following exchange rates:
investments until ENAP reaches a conclusion regarding the presence of hydrocarbons that would
ed December 31, 2008 and 2007.
2008 Ch$
2007 Ch$
allow for recovery. Geological and geophysical
b. Basis of preparation
Chilean peso per US dollar
636.45
496.89
These stand alone financial statements have been
Argentine peso per US dollar
3.45
3.15
prepared in accordance with accounting principles
Pound sterling per US dollar
0.69
0.50
generally accepted in Chile as issued by the Chil-
Unidad de fomento per US dollar
0.03
0.03
tions are transferred to oil fields and unsuccess-
ean Institute of Accountants and the standards
Euro per dollar
0.71
0.68
ful explorations are charged to income.
costs are charged directly to income.
Costs and investments for successful explora-
issued by the Superintendency of Securities and
Insurance, except for investments in subsidiaries,
e. Time deposits
Materials and spare parts included in property,
which are recorded at the equity method in a sin-
Time deposits reflect the principal invested plus
plants and equipment are shown under other
gle line of the balance sheet and, therefore, have
accrued interest and indexation at year-end.
property, plants and equipment at cost net of
obsolescence provision.
not been consolidated on a line-by- line basis.
INDEX
187
18 8
•
ANNUAL REPORT 2008
o. Income tax and deferred taxes
In accordance with accounting principles gener-
among, related companies, must be eliminated
ally accepted in Chile, the Company is periodical-
when determining the variations in net assets
The Company makes provisions for income tax
ly evaluating the recoverability of its assets value
and recognized results. Unrealized losses result-
on an accrual basis according to Chilean tax law.
ing from these type of transactions are also elimi-
The Company pays the First Category tax and an
sued by the Chilean Institute of Accountants.
nated unless the conditions under which a trans-
additional tax pursuant to Regulation No. 2 of
action was performed consider, either explicitly
Decree Law No. 2,398.
k. Depreciation of property, plants and
or implicitly, that a portion of the book value of
equipment
the involved assets will not be recoverable.
Deferred taxes derived from differences between
line method over the estimated useful lives of
Investments in foreign companies and subsidiar-
for all temporary differences, taking into account
the assets, except for oil fields, whose deprecia-
ies have been valued according to the standards
the tax rate that will be effective at the estimat-
tion is calculated using production unit method.
set forth in Technical Bulletin No.64 of the Chil-
ed reversal date, following Technical Bulletin No.
This calculation is made taking into account the
ean Institute of Accountants. These standards
60 of the Chilean Institute of Accountants. The
production for the year and estimated reserves
and procedures require for investments, in un-
effects resulting from deferred taxes existing at
(proved/developed) of crude oil and other hy-
stable countries which are not an extension of
the date of applying the aforementioned techni-
drocarbons, based on technical reports prepared
the operations of the investor, to be accounted
cal bulletin and not recognized before, are rec-
the financial and the tax balances are recognized
Deprecia tion is calculated using the straight-
by the Company’s personnel. Figures from these
for in US dollars, converting the financial state-
ognized in income as the temporary differences
reports are periodically certified by independent
ments of the foreign company to Chilean GAAP
are reversed.
specialists. Depreciation of marine oil and gas
and charging or crediting currency translation
pipelines is calculated using the production unit
adjustments in other reserves in equity. This
method, taking into account, the production of
policy was applied until December 2004.
This item includes, among other things, obligations
with confirmed payment to suppliers of crude oil
the year and reserves (proved/developed).
Investments in companies in which ENAP holds
l. Leased assets
p. Notes payable
and other products, through financial institutions.
less than a 20% stake and a significant influence
Assets under financial leases are recorded simi-
are accounted for in accordance with the method-
q. Bonds payable
larly to acquisition of property, plants and equip-
olo gy set forth in Technical Bulletin No.72 of the
The bond issuance obligations are shown in ac-
ment, recognizing the entire debt and interest
Chilean Institute of Accountants. Such investment
cordance with the amounts payable committed,
on an accrual basis. Valuation and depreciation
are recorded under the equity method accounting.
including principal and interest accrued as of
to the closing date of the financial statements.
of these assets are calculated using general standards applicable to property, plants and equip-
n. Investments in other companies
The discount on bonds is capitalized and linearly
ment. These assets are not legally the property
Investments in other companies are valued at
amortized within the stipulated period of valid-
of the Company and, therefore, cannot be freely
acquisition cost.
ity of the debt certificates and is shown in Other
current assets and Other long-term assets, while
disposed of until the call options held by the
Company are exercised.
m. Investments in related companies
According to Technical Bulleting Nº72 of the Chil-
charges to income are shown in financial expens-
ean Institute of Accountants, investments in re-
es in the statement of income.
lated companies which do not possess the char-
Investments made after January 1, 2004 are ac-
acteristics to be recorded according to their fair
Bond issuance costs are capitalized and shown in
counted for using the methodology set forth in
value, because the Company does not have con-
Other current assets and Other long-term assets
Technical Bulletin No.72 of the Chilean Institute
trol or significant influence, their cost has been
and are amortized using the straight- line method
of Accountants. Investments made before Janu-
considered to be their last fair value prior to the
over the term of the bonds. Amortization charged
ary 1, 2004 were accounted for at their acquisi-
date of change in the valuation method, adding
to income is included in financial expenses.
tion date cost, recording the associated goodwill
or subtracting goodwill, if appropriate.
r. Derivative contracts
on the books on the acquiring entity and adjusting the investment each year for the acquiring
ñ. Deferred credits’ costs
entity’s participation in earnings.
Fees for loans are deferred and amortized over
hedge operations for both expected transactions
the term of the loans.
and existing items.
the Chilean Institute of Accountants, unreal-
They are presented in others current assets and
Hedge instruments of expected transactions
ized earnings arising from transactions with, and
in other within the long-term assets.
are shown at fair value and the changes in such
The Company has derivative contracts which are
In accordance with Technical Bulletin No. 72 of
•
ANNUAL REPORT 2008
value are recognized in deferred asset or liabil-
x. Bond issuance cost
This situation is reflected in the statement of cash
ity accounts until their maturity, when they are
Bond issuance expenses are capitalized and are
flow as higher Collection from trade accounts re-
recognized as other non-operating income or ex-
shown under Other current assets and Other
ceivable and higher payments to Suppliers.
penses, as appropriate.
long-term assets, and is amortized by using the
Hedge instruments of existing items are valued
ments. Amortization is shown under Financial
at fair value. The effect of such a valuation is rec-
expenses.
straight- line method over the life of the docu-
The accounting principles discussed in Note 2
ognized in income in case of loss and is deferred
in case of gain.
NOTE 3 | ACCOUNTING CHANGES
have been applied consistently as of December
y. Sale and leaseback agreement
31, 2008 with respect to the prior year, except for
The Company signed a sale and financial lease-
the following changes:
s. Employee vacations
back agreement for the offices in the corporate
The cost of employee vacations is recognized on
building, which is recorded maintaining such
a) Change of accounting principles:
an accrual basis.
assets under property, plants and equipment
Beginning on January 1, 2008 ENAP changed the
at the same book value recorded before the
methodology for calculating severance indemni-
t. Employees’ benefits and compensations
transaction and recording the funds obtained
ties, switching from the current value to the ac-
The employees’ benefits and compensations pro-
crediting income on account of liability under
crued value by adopting the methodology of the
vision covers obligations accrued due to disburse-
capital leases, which is shown as part of long-
accrued cost of the benefit, in accordance with
ments that the Company should pay out within a
term liabilities maturing within a year in current
Technical Bulletin No. 8 issued by the Chilean
year, in accordance with the employees’ collective
liabilities and long-term sundry creditors for the
Institute of Accountants. A 5.5% annual discount
bargaining agreements and current contracts.
long-term portion.
rate, the number of service years with the com-
u. Severance indemnities
z. Statement of cash flow
sidered for this purpose.
Beginning on January 1, 2008, the severance
The Company has considered as cash and cash equiv-
indemnity provision is recorded based on the
alents any cash and short-term investments made as
pany, and the age of the employees were all con-
At the beginning of the year, the accumulated ef-
present value of the accrued cost of the benefit,
part of the Company’s normal cash surplus manage-
fect of this change resulted in a decrease in the
ment according to requirements of Technical Bulle-
provision by ThUS$8,689 (Note 19) which was re-
sued by the Chilean Institute of Accountants.
tin N°50 of the Chilean Institute of Accountants.
corded in "Other non-operating revenue" in the
statement of income.
This provision is based on variables such as the
number of service years at the company, em-
Such amounts include cash, time deposits and
ployee ’s age, and a 5.5% annual discount rate.
marketable securities resale agreements included
b) Change of accounting estimates:
During year 2007 this provision was recorded
in “Other current assets”.
As a consequence of technical reappraisals of
productive plants and fixed asset-storage plants
based on the current value.
v. Operating income
The concept “Cash flows from operating activities”
associated with operations, ENAP modified the
includes those cash flows related to business ac-
useful life estimates for some of their fixed as-
Operating income from the business is recorded
tivities, including, in addition, interest paid, finan-
sets, due to revised time periods of expected
on an accrual basis.
cial income and, in general, cash flows that are not
revenue generation. The change led to extend-
included in cash flows from investing or financing
ing the us eful life for some refining plants from
This income is recognized at the time of the
activities. In addition, the operating cash flow con-
10 to 15 years, and for some storage tanks from
15 to 20 years.
physical shipping of the products, in conjunction
cept used in this statement of cash flows is broader
with the transfer of their ownership and control.
than that used in the statement of income.
w. Computer software
For presentation purposes, under the concept
creased depreciation for the related fixed assets
The Company purchases its software in comput-
“Cash Flows from Operating Activities” in par-
by ThUS$837..
er packages, which are capitalized and are amor-
ticular collection of made accounts are included,
At December 31, 2008 this change resulted in de-
tized over a maximum 4 year period. Implemen-
the fund s submitted by ERSA with the purpose
tation costs are charged to Income statements in
to amortize the mercantile account it holds with
the same period of their acquisition.
ENAP for the crude oil financing imports. With
these funds, ENAP pays international suppliers.
INDEX
189
19 0
•
ANNUAL REPORT 2008
NOTE 4 | CURRENT AND LONG-TERM ACCOUNTS RECEIVABLES
Current and long-term receivables are as follows:
Current
Up to 90 days
Trade accounts receivableAllowance for doubtful accounts
Total long term receivables
2008
ThUS$
48,219
10,614
-
2007
ThUS$
37,430
15,805
-
More than 90
days up to 1 year
2008
2007
ThUS$
ThUS$
821
-
815
Subtotal
2008
ThUS$
48,219
282
11,435
1,000
Total current (net)
2008
ThUS$
47,937
10,435
-
Total Long term
2007
ThUS$
37,130
16,620
-
2008
ThUS$
4,493
4,493
2007
ThUS$
6,431
6,431
Miscellaneous receivables are mainly advances to suppliers and accounts receivable from employees on account of housing, medical and dental loans and
salary advances.
The detail of trade accounts receivables is as follows:
2008 ThUS$
%
2007 ThUS$
%
Distributors
11,392
23,77%
17,273
46.52%
Direct consumers
34,766
72,52%
17,057
45.94%
1,779
3,71%
2,800
7.54%
47,937
100%
37,130
100%
LOCAL:
FOREIGN:
Foreign receivables (1)
Total
(1) Foreign debtors correspond to accounts receivable from export products.
•
ANNUAL REPORT 2008
NOTA 5 | BALANCES AND TRANSACTIONS WITH
ducto Trasandino Argentina S.A., Petrosul S.A.
Until the first semester of 2006, Enap Refinerías
RELATED COMPANIES
and Prodisa S.A.
S.A. purchased crude oil and imported products
The Company has set a materiality of ThUS$500,
Since second half 2006, Enap Refinerías S.A.
needed for its operation directly from ENAP.
Enap Sipetrol S.A. and Petro Servicio Corp S.A. per-
in order to inform its transactions with related
(ERSA) imported part of the crude oil and prod-
companies.
ucts needed for its operation through ENAP.
form one or more of the exploration, exploitation
ENAP finances these imports of crude and prod-
or drilling activities on oilfields outside of Chile.
In 2008 the Company performed no significant
ucts by paying directly to the suppliers. ERSA
transactions with A&C Pipeline Holding, Cía. de
also renders services of reception and storage of
Balances and main transactions with related
Hidrógeno Bío Bío S.A., Energía Concón S.A.,
hydrocarbons via terminals and tanks.
companies are as follows:
Eteres y Alcoholes S.A., Gas de Chile S.A., OleoA) Notes and accounts receivable
Short term
Tax I.D. N°
Company
87.756.500-9
96.579.730-0
Foreign
96.694.400-5
78.889.940-8
96.856.650-4
99.577.350-3
76.418.940-K
76.788.080-4
TOTAL
ENAP REFINERIAS S.A. (1)
ENAP SIPETROL S.A (2)
PETRO SERVICIO CORP. S.A (4)
GAS DE CHILE S.A. (3)
NORGAS S.A. (4)
INNERGY HOLDING S.A.(3)
EMPRESA NACIONAL DE GEOTERMIA (4)
GNL CHILE S.A. (3) (7)
GNL QUINTERO S.A. (3) (7)
2008
ThUS$
2,000,811
12,201
177
485
830
1,138
6,637
2,022,279
Long term
2007
ThUS$
2,659,662
10,973
21
201
5
527
3,757
73,289
2,748,435
2008
ThUS$
175,071
11,073
186,144
2007
ThUS$
185,976
230
14,274
200,480
B) Notes and accounts payable
Tax I.D. N°
Company
87.756.500-9
96.579.730-0
Foreign
96.668.110-1
96.971.330-6
Total
ENAP REFINERIA S.A. (4)
ENAP SIPETROL S.A. (4)
PETRO SERVICIO CORP. S.A. (4)
CÍA. LATINOAMERICANA PETROLERA S.A. (5)
GEOTERMICA DEL NORTE S.A. (6)
Corto plazo
2008
ThUS$
10,497
386
219
126
11,228
2007
ThUS$
19,322
498
164
949
20,933
Largo plazo
2008
ThUS$
1,843
1,843
2007
ThUS$
2,360
2,360
(1) The balance of short-term receivables at December 31, 2008 and 2007 corresponds to commercial debt resulting from direct sales of crude oil and products and working
capital provided to a subsidiary. The amounts of this line of credit are in indexed local currency based on the US dollar, using the exchange rate published by the Chilean
Central Bank. The cost of the credit line is 4.45% on a annual basis (5.96% in 2007).
(2) The long-term receivable from Enap Sipetrol S.A. corresponds to a line of credit with no repayment date for which a fixed rate of 5.21% (5.86% at December 31, 2007) was
established, in accordance with the 2008 financial policy.
(3) Short-term and long-term receivables correspond to future capital contributions to related companies which do not have a maturity date. In the case of GNL Quintero
S.A., it corresponds to a checking account transfer from which a part will be capitalized according to the shareholders' agreement and the balance will be collected, upon
the project's financing process be concluded.
(4) Balances of short-term receivables and payables correspond mainly to commercial operations that do not bear interest or price- level restatements.
(5) Corresponds to foreign currency (US dollars) repurchase agreements for entered into by investees and ENAP.
(6) Corresponds to capital contributions to be paid.
(7) In accordance with a contract for the assignment of rights entered into on April 30, 2008, GNL CHILE S.A. and GNL QUINTERO S.A. agreed that GNL CHILE S.A. will settle accounts with GNL QUINTERO S.A. by offsetting their debts to each other. This includes ENAP’s receivable balance from GNL CHILE S.A. in the amount of ThUS$1,631,
which is to be transferred to GNL QUINTERO S.A. for offsetting purposes.
INDEX
191
192
•
ANNUAL REPORT 2008
C) Transactions
2008
Company
Tax I.D. N°
Nature of
relationship
Type of transaction
ENAP REFINERÍAS S.A
87756500-9
87756500-9
87756500-9
87756500-9
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Sales of crude oil
Sales of products
Purchase of products
Interest in current account
87756500-9
87756500-9
87756500-9
Subsidiary
Subsidiary
Subsidiary
Other sales or services
Sales of natural gas
Other purchases
ENAP REFINERÍAS S.A
ENAP SIPETROL S.A.
ENAP SIPETROL S.A.
ENAP SIPETROL S.A.
ENAP SIPETROL S.A
ENAP SIPETROL S.A.
ENAP SIPETROL S.A.
ENAP SIPETROL S.A.
PETRO SERVICIOS CORP
GNL QUINTERO S.A
GNL CHILE S.A.
87756500-9
87756500-9
96579730-0
96579730-0
96579730-0
96579730-0
96579730-0
96579730-0
96579730-0
Extranjera
76788080-4
76418940-K
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Investee
Investee
Payment to Suppliers on ERSA's Account
Capitalization of debt
Financing operations (granted)
Financing operations (paid)
Purchases of crude oil
Services Received
Reimbursed Expenses
Capitalized Debt
Invoiced services and expenses
Invoiced services and expenses
Loans granted
Loans granted
Amount
ThUS$
2007
82,722
651,185
387,338
147,757
Effect on
income (charge)/
credit ThUS$
12,100
576,824
147,757
14,668
16,789
11,140,519
749,698
128,957
139,862
131,481
5,809
112
1,694
887
65,022
-
Amount
ThUS$
68,758
515,930
348,774
76,529
Effect on
income (charge)/ credit
ThUS$
15,747
393,319
76,529
8,305
-
6,668
677
13,177
846
-
10,359
112
976
-
7,850,257
194,559
134,547
32,156
3,269
716
56,000
8,485
801
73,289
1,024
11,977
716
4,428
-
NOTA 6 | INVENTORIES
Inventories are as follows:
Existencias
2008
2007
ThUS$
ThUS$
Crude oil in stock (1)
15.630
63.562
Finished products (2)
32.265
34.889
Materials in warehouse and in transit (net)
22.843
15.301
Total
70.738
113.752
(1) Crude oil stock is shown net of unrealized income for the purchase of crude oil from the indirect subsidiary Sipetrol Argentina S.A., which is ThUS$330 at December 31,
2008 (ThUS$276 in 2007), see Note 10 (2).
(2) Finished products are presented net of unrealized income from the purchase of products from subsidiary Enap Refinerías S.A., which as of December 31, 2008, amounted
to ThUS$103 (ThUS$134 in 2007), see note 10 (2).
At December 31, 2008, ENAP recorded adjustment of ThUS$32,564 to adjust finished products and crude oil down to their respective realizable va lues,
given that their production prices and purchase prices both exceeded their realizable values. These net adjustments are shown in inventory and charged
to operating costs.
•
ANNUAL REPORT 2008
NOTE 7 | DEFERRED TAXES AND INCOME TAX
a. Deferred taxes
Accumulated balances for deferred taxes, at December 31, 2008 and 2007, are as follows:
Deferred taxes
2008
2007
IMPUESTO DIFERIDO
Assets
Items
Allowance for doubtful debts
Short Term
ThUS$
IMPUESTO DIFERIDO
Liabilities
Long Term
ThUS$
Short Term
ThUS$
Assets
Long Term
ThUS$
Short Term
ThUS$
Liabilities
Long Term
ThUS$
Short Term
ThUS$
Long Term
ThUS$
731
-
-
-
171
-
-
-
Unearned income
2,483
-
-
-
2,483
-
-
-
Employee vacation accrual
4,920
-
-
-
5,369
-
-
-
Other events
-
-
-
-
-
-
-
-
Fixed assets depreciation
-
-
-
477
-
-
-
-
Severance indemnity
-
-
-
4,400
-
-
-
-
8,040
-
-
-
1,391
-
-
-
Obsolescence of material accrual (1)
-
3,767
-
-
-
4,147
-
-
Platform removal and normalization of oil wells
provision (1)
Leasing agreements
-
29,534
-
-
-
32,483
-
-
-
-
-
1,138
-
785
-
-
Deferred bonds expenses
-
-
-
3,776
-
-
-
4,766
Bonds issuance cost
-
-
-
1,846
-
-
-
2,588
Deferred financial expenses
-
-
-
1,366
-
-
-
2,404
-
6,286
-
-
-
8,136
-
-
Prepaid expenses
-
-
481
-
-
-
529
-
Recovery of the stamp tax
-
-
-
-
-
-
14,928
-
Derivatives contracts
-
20,985
-
-
-
-
-
-
Colombia liability accrual
-
200
-
-
-
199
-
-
1,366
-
-
-
-
-
-
-
Provision for adjustment of products to
market price
Total deferred taxes
18,562
-
-
-
-
-
-
-
36,102
60,772
481
13,003
9,414
45,750
15,457
9,758
Balances complementary accounts net of
amortization
Valuation allowance
-
15,315
-
-
15,428
-
-
-
15,204
-
17,321
36,102
30,253
9,414
13,001
15,457
9,758
Unrealized profits on sale of crude oil
Provision of costs for participating in CEOP's
Total
481
13,003
(1) The balance of complementary accounts related to the obsolescence provision of supplies and withdrawal of oil rigs is amortized upon the reversal of the corresponding
temporary difference.
INDEX
193
1 94
•
ANNUAL REPORT 2008
b. Income tax
The detail of income tax and the related credits is as follows:
Income tax
Income tax provisions (recoverable taxes)
Current
2008
MUS$
Long - term
2007
MUS$
2008
MUS$
2007
MUS$
Provisions for income tax at December 31
17% of first category
15,034
10,289
-
-
40% Decree Law 2,398 on Enap's earnings
35,374
20,858
-
-
2,545
4,764
-
-
-
-
5,015
11,914
52,953
35,911
5,015
11,914
-
3,351
-
114,445
52,953
39,262
5,015
126,359
(9,509)
(3,808)
-
-
(379)
(366)
-
-
43,065
35,088
5,015
126,359
40% Decree Law 2,398 on earnings from investees (1)
40% Decree Law 2,398 on earnings from subsidiaries (1)
Total charge for taxes of the year
Balance of income taxes provisions from prior year (2)
TOTAL
Less:
Estimated monthly payments of the year
Credit for training expenses
Net balances payable
Decree Law 2,398 establishes a tax rate of 40% for dividends received by the Company from subsidiaries and affiliates. ENAP constitutes provision for such
tax based on estimated profit distributions.
(3) In accordance with Ordinance N°602 issued on June 30, 2008 by the Finance Ministry, which authorized the capitalization of retained earnings in Enap
Refinerías S.A. and in Enap Sipetrol S.A., the Company reversed the “Prior year tax provision balance” which amounted to ThUS$126,359.
The long-term portion payable is recorder in long-term accruals (Note 16).
The short-term portion of the income tax recoverable is shown as part of recoverable taxes in current assets.
Oil Stabilization Fund Credit
2008
ThUS$
-
Specific tax on gasoline and diesel fuel
6,582
9,054
-
26,189
1,244
7,826
1,234
50,255
Recovery of taxes (Note 19)
Other refundable taxes
Total refundable taxes
2007
ThUS$
13,778
•
ANNUAL REPORT 2008
c. Expense for income tax
The charge for income tax is as follows:
ITEM
Current tax expenses (tax provision)
Effect of assets or liabilities due to deferred taxes of the year
Effect of amortization of complementary accounts of deferred tax assets and liabilities
Effect of assets or liabilities for deferred taxes due to changes in the valuation allowance
Other charges or credits to the account
Total
2008 ThUS$
(57,968)
53,441
114
2,117
117,336
115,040
2007 ThUS$
(47,825)
(8,335)
(60)
(6,633)
(62,853)
Other charges or credits
In the account In accordance with Ordinance No. 602 issued on June 30, 2008 by the Finance Ministry, which authorized the capitalization of retained
earnings in Enap Refinerías S.A. and in Enap Sipetrol S.A., the Company reversed the “Prior year tax provision balance” which amounted to ThUS$126,359.
In addition, the amount of ThUS$9,022 was charged, for the income tax paid in the reliquidation associated with the recovery of the Stamp Tax.
The effect on earnings related to income tax and deferred tax, taking into account the First Category Tax rate established in the “Ley del Impuesto sobre
la renta” (“The Income Tax Law”) and the tax rate included in Regulation No. 2 of Decree Law No. 2,398 is as follows:
(LOSS) INCOME BEFORE INCOME TAX AND DEFERRED TAX
2008 ThUS$
2007 ThUS$
(1,072,831)
112,485
(17,725)
(10,289)
16,604
(4,482)
(Loss) income before income tax and deferred taxes according to article No.2 of D.L. No.2,398
(1,073,952)
97,714
39,068
(10,546)
77,093
(37,536)
(957,791)
49,632
Net (loss) income for the
NOTE 8 | PROPERTY, PLANTS AND EQUIPMENT
Property, plants and equipment and its respective accumulated depreciation are as follows:
2008
Land
2007
Gross
balance
ThUS$
1,676
Accumulated
depreciation
ThUS$
Net
balance
ThUS$
1,676
Gross
balance
ThUS$
1,676
Accumulated
depreciation
ThUS$
-
Net
balance
ThUS$
1,676
2,057,809
(1,736,229)
321,580
2,032,416
(1,705,050)
327,366
37,984
(24,178)
13,806
36,408
(20,794)
15,614
Other property, plant and equipment
44,622
(4,059)
40,563
50,915
(2,845)
48,070
2,142,091
(1,764,466)
377,625
2,121,415
(1,728,689)
392,726
Total
INDEX
195
1 96
•
ANNUAL REPORT 2008
The detail of construction and infrastructure is as follows:
Oil fields
Oil rig
Refineries and fuel plants
Oil and gas pipelines
Maritime facilities and storage plants
Production facilities
Reinjection systems
Buildings, settlements and camps
Investment and exploration projects
Total
Net value
2008 ThUS$
2007 ThUS$
1,181,671
223,045
80,403
300,112
26,216
15,382
116,370
29,731
84,879
2,057,809
(1,736,229)
321,580
1,155,835
223,045
79,037
285,413
26,067
12,459
115,435
30,260
104,865
2,032,416
(1,705,050)
327,366
The detail of other property, plants and equipment is as follows:
2008 ThUS$
2007 ThUS$
Leased assets (1)
16,370
16,370
Materials in warehouse (2)
23,231
27,633
5,021
6,912
Total
Furniture, office equipment and tools
44,622
50,915
(4,059)
(2,845)
Net value
40,563
48,070
(1) This item includes corporate offices acquired through a lease contract with a call option with Banco Santander Chile. At December 31, 2008 the net value is ThUS$15,350
(ThUS$15,672 in 2007). This contract pays monthly installments and ends in August 2018.
(2) The materials in warehouse for property, plants and equipment are shown net of obsolescence allowance of ThUS$6,609 in 2008 (ThUS$7,276 in 2007).
The charge to income for depreciation of the fixed assets included in operating costs and administrative expenses is as follows:
Operating costs
Administrative expenses
Totales
NOTE 9 | SALE AND LEASEBACK AGREEMENT
On October 28, 2005 the Company signed a sale
The obligations for this contract are included in
and leaseback agreement for the offices in the
current liabilities for ThUS$1,172 (ThUS$1,323 in
corporate building for UF498,165.17. This agree-
2007) and in miscellaneous payable under long-
ment is denominated in UF (inflation- indexed
term liabilities for ThUS$12,182 (ThUS$15,645 in
units of account), maturing within 154 months
2007).
and at an annual interest rate of 3.6871%.
2008 ThUS$
2007 ThUS$
56,826
63,463
1,334
636
58,160
64,099
INDEX
COMPAÑIA LATINOAMERICANA PETROLERA S.A. CHILE
EMPRESA NACIONAL DE GEOTERMIA S.A. (3)
ENAP REFINERIAS S.A. (1) (2) (11) (16)
ENAP SIPETROLS.A. (1) (2) (6) (11)
ENERCON S.A. (3)
ENERGÍA ANDINA S.A. (15)
ETERES Y ALCOHOLES S.A.
GAS DE CHILE S.A.
GEOTERMICA DEL NORTE S.A. (8) (14)
GNL CHILE S.A. (3) (4) (13)
GNL QUINTERO S.A. (3) (5) (12)
INNERGY HOLDING S.A.(10)
MANU PERU HOLDING S.A. (3) (9)
NORGAS S.A.
OLEODUCTO TRASANDINO (ARGENTINA) S.A.
96668110-1
99577350-3
87756500-9
96579730-0
99519820-7
76039634-6
96913550-7
96694400-5
96971330-6
76418940-K
76788080-4
96856650-4
Foreign
78889940-8
Foreign
PETRO SERVICIO CORP S.A.
PETROPOWER ENERGIA LTDA
PETROSUL S.A.
PRODUCTORA DIESEL S.A. (3)
ENAP SIPETROLARGENTINA S.A.
Foreign
78335760-7
96969000-4
99548320-3
Foreign
Total
OLEODUCTO TRASANDINO (CHILE) S.A. (7)
96655490-8
(7) (17)
COMPAÑÍA DE HIDROGENO DEL BIO-BIO S.A. (3) CHILE
99519810-K
ARGENTINA
CHILE
CHILE
CHILE
ARGENTINA
CHILE
ARGENTINA
CHILE
PERÚ
CHILE
CHILE
CHILE
CHILE
CHILE
CHILE
CHILE
CHILE
CHILE
CHILE
CHILE
I.CAYMAN
A&C PIPELINE HOLDING (7)
2008
%
5.00000
2,973,170 50.00000
2,087 20.87000
6,000,000 40.00000
176,749 17.50000
83,376,759 99.61000
175,090,668 99.98000
1,539,865 49.00000
22,112 20.00000
50,000
US$
US$
US$
US$
US$
Chilean Peso
US$
Chilean Peso
US$
Chilean Peso
US$
Chilean Peso
0.00001
7.50000
75,146
0.50000
2,219,987 10.00000
1,579 15.79000
-
199,800 99.90000
6,225,293 35.83000
27,206,350 35.79000
420,000 42.00000
1
16,247,025 25.00000
200 20.00000
4,000,000 33.33000
2008
1,244
9,166
10,792
466
ThUS$
2007
3,152
12,137
10,364
467
ThUS$
-
-1,436
-713
1,948
ThUS$
2008
-
-3,527
18,166
554
14,137
14,928
30,179
16,000
-3,439
4,591
61
12,237
-
27,028
13,029
13,246
64,966
1,599
8,051
13,287
4,866
62,360
10,996
12,850
93,284
1,641
9,512
24,517
7,378
57,478
0.5000 255,354 253,875
10.0000
15.7900
7.5000
99.9000
35.8300
35.9300
42.0000
0.0000
25.0000 -28,548 -18,259
20.0000 192,688
33.3300
45.3700
50.0000
20.8700
-
17.5000
99.6100 281,043 268,829
-1,535
-992
ThUS$
2008
-
2008
2007
the year
Income for
-
-
-
ThUS$ ThUS$ ThUS$
2007
fair value
-
-
-
-
-
-
-
-
-
-
-72
-3,527 -3,439 -3,088
-
-
-
-
-
-830
-
-
-
-
-
-
-
1,489
2,033
816
-
-143
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-518
-
-
-
-
2,232 13,029 10,996 2,033 2,232
809
-
-
-563 25,007 24,766
-713 13,287 4,871
2,713
38,856 30,263
-42
-270
-516
533
5,007 15,790 62,360 57,478 5,007 15,790
-
97
-
-704
-143
ThUS$
2008
-752
-198
104
-
ThUS$
2007
Accrued income
-296
-277
-772
-
392
-
228
9,129
7
203
129
2,914
-42
-49
-93
224
-
-3
223
128
2,270
-142
-102
-129
1,139
-
-8,801 -6,183
-343
-1,029
-810
-2
397
-29
168
12,486
- -1,095,702 20,682
959 1,305
-
-
-1,480 192,688 16,000 -1,714 -1,480
-830
-1,704
-
-
- 14,928
1,876
-
1,244 3,152 -1,436 -1,535
-
1,305 30,179 27,028
8,963
-35,203 -24,730
-1,714
-3,088
-1,784
-5
1,900
-72
959
12,587
Equity of
companies at
2,080 10,792 10,364 1,948 2,080
ThUS$
2007
at fair value
Equity of companies
99.9600 336,423 659,463 -1,096,171 20,823
49.0000
20.0000
5.0000
36.2500
2007
%
ownership
326,250 36.25000
shares
Number of
Equity of
companies
Percentage of
Chilean Peso 6,809,098,842 45.37000
Chilean Peso
US$
US$
US$
US$
US$
Chilean Peso
Chilean Peso
US$
US$
investment
origin
Foreign
Currency of
Country of
Company
Tax I.D. N°
NOTE 10 | INVESTMENTS IN RELATED COMPANIES
85
704,738
1,277
1,303
2,092
4,872
1,597
5,901
4,776
2,044
-
1
38,538
1
8,242
277
2,950
5,971
5,281
279,958
336,589
610
1,833
540
ThUS$
2008
85
971,724
1,269
1,100
2,029
6,996
1,640
6,122
5,304
3,099
-
1
3,200
1
2,083
31
2,554
-
4,730
267,791
659,199
1,545
2,427
518
ThUS$
2007
VP / VPP
-
-
-
-
-7,752
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-483
-7,269
ThUS$
2008
-
-
-
-
2,441
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,441
ThUS$
2007
Unrealized income
85
712,490
1,277
1,303
2,092
4,872
1,597
5,901
4,776
2,044
-
1
38,538
1
8,242
277
2,950
5,971
5,281
280,441
343,858
610
1,833
540
ThUS$
2008
2007
1,545
2,427
518
85
ThUS$
969,283
1,269
1,100
2,029
6,996
1,640
6,122
5,304
3,099
-
1
3,200
1
2,083
31
2,554
-
4,730
267,791
656,758
investment
Book value of
•
ANNUAL REPORT 2008
197
198
•
ANNUAL REPORT 2008
(1) Unrealized income corresponds to sale of
subsidiaries’ annual dividends to ENAP, for the
its legal entity status at the moment the merger
crude oil and products by ENAP to its subsidiary
2006 and 2007 financial years; this was ratified
was formalized and all the stipulations of the
Enap Refinerías S.A. and to the services rendered
by the Enap Sipetrol S.A. Extraordinary Meeting
General Corporate Law and all other legal require-
by ENAP to its subsidiary Enap Sipetrol S.A.
Nº19 held on December 28, 2007.
ments in force in Peru. The merger was performed
(2) Under accrued subsidiaries income are includ-
On August 16, 2007, was held the 18th Enap Si-
ed: - Unrealized income derived from to sales of
petrol S.A.’s Extraordinary Shareholders Meet-
incorporated into Manu Perú Holding S.A.. The
crude oil from its subsidiary Enap Sipetrol S.A. to
ing, with the previous authorization from the
merger became effective on December 1, 2007.
in a single, complete or universal act, that is to
ENAP, which amounts to ThUS$330 at December
Ministry of Finance, which is set in the official
31, 2008 (ThUS$276 in 2007).
letter Ord. Nº745 of August 14, 2007, an increase
say, that all company’s assets and liabilities were
in the company's capital for ThUS$56,000, by the
holders of Innergy Holdings S.A., held on January
Unrealized income derived from sales of finished
issuance of 19,060,977 new shares, all of which
8, 2008, it was agreed to increase the corporate
products from its subsidiary Enap Refinerías S.A.
were subscribed and paid by Empresa Nacional
capital, divided into 54,723,148 shares, to 57,964,065
to ENAP, which amounts to ThUS$103 at Decem-
del Petróleo by capitalizing credits in that sub-
shares. ENAP committed to subscribe and pay in
ber 31, 2008 (ThUS$134 in 2007). Both unrealized
sidiary’s checking account.
810,229 of these shares, which were considered fully
paid in by capitalizing the current account associat-
income are stated in Inventories (see Note 6).
Enap Refinerías S.A. did not take part in this
ed with the cash calls of November and December
(3) The assets and liabilities of Manú Perú Hold-
subscription of shares, decreasing its ownership
of 2007 and the balance paid for the contributions
ing S.A. (Peruvian company), Energía Concón S.A.,
interest to 0.39% and increasing ENAP’S owner-
made in January and February of 2008.
Productora de Diesel S.A., Cía. de Hidrógeno del
ship interest to 99.61%.
At the Extraordinary General Meeting of Share-
Bío Bío, Empresa Nacional de Geotermia, GNL
Chile S.A. y GNL Quintero S.A. were valued at fair
(7) On December 10, 2007, Empresa Nacional del
holders of Innergy Holdings S.A., held on March
value, as provided for in Technical Bulletin 72 of
Petróleo purchased shares of Oleoducto Trasan-
10, 2008, it was agreed to increase the corporate
the Chilean Institute of Accountants and Circular
dino (Chile) S.A., Oleoducto Trasandino (Argen-
capital to 72,152,772 shares. ENAP subscribed
Nº1697 and Nº1699 of the Superintendence of Se-
tina) S.A. and A&C Pipeline Holding, increasing its
3,547,177 shares, and to date ENAP has paid in
curities and Insurance. This valuation showed no
ownership interest to 35.83%, 35.93% and 36.25%,
1.756,008 of them.
significant differences with book value.
respectively. These purchases were valued at fair
value, according to the methodology established
(11) On June 30, 2008, in accordance with the re-
(4) In an Extraordinary Shareholders Meeting
in Technical Bulletin N° 72 of the Chilean Institute
spective Extraordinary Shareholders’ Meetings
held on August 2, 2006, GNL Chile S.A increased
of Accountants and Circulars Nº 1697 and Nº 1699
of Enap Refinerías S.A. and Enap Sipetrol S.A.,
its Paid - in capital in 2,000,000 shares, equiva-
issued by the Superintendence of Securities and
and according to Instruction No. 602 issued by
lent to 2,000,000 pesos; Empresa Nacional del
Insurance.
the Finance Ministry on June 27, 2008, the capital of both companies was increased through the
Petróleo subscribed and paid on April 2007,
666,667 Shares, maintaining its 33.33333% owner-
(8) In the sixth Extraordinary Shareholders Meet-
capitalization of 100% of the earnings retained at
ship interest.
ing of Geotérmica del Norte S.A., held on July
March 31, 2008, which amounted to ThUS$399,476
3, 2007, the company’s Paid - in capital was in-
in Enap Refinerías S.A., and to ThUS$86,244 in
(5) On March 9, 2007, GNL Quintero S.A. was
creased. ENAP subscribed 671,555,929 Series A
Enap Sipetrol S.A., without issuing new shares.
constituted, from which ENAP subscribed and
or ordinary shares, representing the capital in-
paid 200 shares, which represents a 20% of total
crease agreed in this meeting, for a total price of
(12) At the Extraordinary General Meeting of
company’s capital.
Ch$731,728,333 (US$1,388,847.96).
Shareholders of GNL Quintero S.A., held on July
(6) On April 27, 2007, Enap Sipetrol S.A. Ordinary
(9) The Manu Perú Holding S.A. and Inversiones
capital by capitalizing accounts receivable held by
Shareholders Meeting agreed to distribute divi-
y Proyectos Humboldt S.A. General Shareholders
the shareholders against the company. ENAP con-
dends equivalent to 100% of net income for the
meeting held on November 15, 2007, approved
tributed ThUS$35,680.
15, 2008, it was agreed to increase the Paid - in
year ended December 31, 2006. Through ORD.
the Merger Project presented by the Board of
Nº1272 of December 28, 2007, the Ministry of Fi-
Directors and consequently approved the merger
nance temporarily
by absorption of both companies, for which In-
Shareholders of GNL Chile S.A., held on August
versiones y Proyectos Humboldt S.A. will be dis-
20, 2008, it was agreed to increase the Paid - in
solved without liquidation, totally extinguishing
capital by capitalizing accounts receivable held
suspended the policy of transferring 100% of the
(13) At the Extraordinary General Meeting of
•
ANNUAL REPORT 2008
by the shareholders against the company. ENAP
it was agreed to increase the paid - in capital by
as was agreed at point 7 regarding Capital Contri-
contributed ThUS$1,000. cuentas por cobrar que
ThUS750,000 through the issuance of 93,591,135
bution, in the Shareholders’ Meeting.
tienen los accionistas contra la sociedad, aportan-
shares. The subscription and payment of these
do ENAP MUS$35.680.
shares, with ENAP’s favorable vote and CORFO’s
(17) In September 2008, Oleoducto Trasandino (Ar-
abstention, occurred as follows:
gentina) S.A. capitalized Ordinary and Preferred
ers of Geotérmica del Norte S.A., held on August
a) Issuance of 93,553,456 new shares, subscribed
Capital by ThUS$10,714 (Th$33,000 Argentine pe-
28, 2008, the corporate capital was increased by
and paid in by ENAP through a noncash contribu-
sos), causing a change in the number of shares in
8,543,623,042 shares. ENAP subscribed and paid in
tion consisting in the capitalization of a portion
OTA S.A., diminishing its interest to 35.79%.
4,186,374,913 shares.
of the credits held by ENAP against the Company,
Capital adjustments and reduced the Preferred
(14) At the Extraordinary Meeting of Sharehold-
Investments abroad:
which total the equivalent of ThUS$749,698.
(15) The company Energía Andina S.A. was formed
For the Company investments abroad at Decem-
on October 20, 2008. ENAP subscribed and paid
b) The remaining ThUS$302, relating to 37,679 new
ber 31 2008, and 2007, there are no dividends for
6,000,000 shares, which correspond to 40% of
shares associated with the capital increase, can
potential profit remittances.
this company’s capital.
be subscribed within a year from the date of the
abovementioned Shareholders’ Meetings, prefer-
(16) At the Extraordinary Shareholders’ Meeting of
ably by CORFO or, instead of the latter, by ENAP,
Enap Refinerías S.A. held on December 31, 2008,
During 2008 and 2007, the Company and its subsidiaries ha ve not undertaken on liabilities for
hedging these investments abroad.
NOTE 11 | INVESTMENTS IN OTHER COMPANIES
On May 2006, the Company reclassified from Investments in related companies to Investments in other companies, in accordance with Technical Bulletin Nº
72 of the Chilean Institute of Accountants, the following investments: Gasoducto del Pacífico (Chile) S.A., Gasoducto del Pacífico (Argentina) S.A., Gasoducto
Cayman Ltd., Sociedad Nacional de Oleoducto S.A., Sociedad Nacional Marítima S.A., Inversiones Electrogas S.A. and Electrogas S.A..
Tax I.D. N°
Company
Number of
shares
30
Percentage
of ownership
0.0076
Book value
of investment
2008
ThUS$
2
9,100
18.20
5
5
2007
ThUS$
2
96806130-5
ELECTROGAS S.A.
Foreign
GASODUCTO CAYMAN LTD.
Foreign
GASODUCTO DEL PACIFICO (ARGENTINA) S.A.
15,900,586
18.20
14,051
14,051
96762250-8
GASODUCTO DEL PACIFICO (CHILE) S.A.
38,592,313
18.20
20,217
20,217
96889570-2
INVERSIONES ELECTROGAS S.A.
150
15.00
5,130
5,130
81095400-0
SOCIEDAD NACIONAL DE OLEODUCTOS S.A.
10,061,279
10.610
12,705
12,705
76384550-8
SOCIEDAD NACIONAL MARITIMA S.A.
12,965,340
12.9650
1,668
1,668
53,778
53,778
Total
NOTA 12 | OTHER ASSETS
The detail of long-term other assets is as follows:
Deferred credit costs
Expenses for issue of bonds and discount in placement (Note 21)
Interest rate swaps deferred loss (Note 23)
Cross currency swap on leasing fees (Note 23)
Cross currency swap on bonds fees (Note 23)
2008 ThUS$
2007 ThUS$
1,825
2,397
7,472
10,366
47,057
17,342
226
3,741
-
58,324
Other
350
350
Total
56,930
92,520
INDEX
199
20 0
•
ANNUAL REPORT 2008
NOTA 13 | LIABILITIES WITH BANKS AND
The interest rate applied to the operation
The loan has a 7-year term and will be amortized in
FINANCIAL INSTITUTIONS - SHORT-TERM
was LIBOR+0.20% for the first fo ur years,
6 equal installments, the first due on June 14, 2011.
LIBOR+0.225% for years five and six and LIThe detail of short-term liabilities with banks and
BOR+0.25% for year seven.
The annual interest rate applied to the operation is LIBOR+0.175% for the first three years,
financial institutions is as follows:
The change in the credit’s term, which originally
LIBOR+0.20% for years four and five and LI-
(1) J.P. Morgan Chase Bank:
included amortizations between 2006 and 2009,
BOR+0.225% for years six and seven.
On June 15, 2006, ENAP refinanced 220 million
meant freeing funds to finance ENAP invest-
dollars of the Syndicated loan, with effective
ments for the coming years. The interest rate
(3) As of December, 2008, ENAP holds short-term
date as of September 5, 2006.
spread remains practically unaltered regarding
loans totaling US$579.84 million with tenors rang-
the original credit (LIBOR+0.20% between 2006
ing from 120 to 180 days. These short term loans
Through this operation, ENAP signed a contract
and 2006 and LIBOR+0.225% in 2009). Since it
were undertaken with Scotiabank, JP Morgan,
with fifteen international banks under the laws
is a refinancing of liabilities, this transaction did
ABN AMRO Bank N.V., Calyon, and BNP Paribas,
of New York called Second Amended and Re-
not affect ENAP’s liability level.
at annual rates ranging from 3.65% to 6.8%.
(2)CALYON NEW YORK BRANCH
In addition, ENAP has overdraft lines of credit
a previous August 29, 2003, contract. The cur-
In December 2006, the Company obtained a
available for US$60 million. At December 31,
rent modification refers to: (i) the consolidation
US$150,000,000 syndicated loan from a group of
2008, US$10.7 million had been drawn.
of principal due from 2007 to 2009 of the cur-
banks, with Calyon Bank New York Branch as agent.
stated Term Loan Agreement that modifies the
August 31, 2004 credit contract, which modified
rent credit’s two existing tranches (Tranche 1 and
Tranche 2), and (ii) the modification of principal
Through this operation, ENAP signed a syndicated
maturity dates into a 7 year term single payment
loan contract with 12 international banks under the
("bullet"), with maturity date September 2013
laws of New York (called Term Loan Agreement).
maturity date.
LIABILITIES WITH BANKS AND FINANCIAL INSTITUTIONS - SHORT-TERM
Tax I.D. N°
Foreign
Foreign
Foreign
Foreign
Foreign
TOTAL
% Obligations in foreign currency
% Obligations in local currency
ABN AMRO BANK N.V.
CALYON
BNP PARIBAS
SCOTIABANK
JP MORGAN
Currency US Dollar
2008
ThUS$
186,540
101,198
101,850
45,068
145,181
579,837
574,792
5,11%
100,00%
0,00%
Total
2007
ThUS$
-
2008
ThUS$
186,540
101,198
101,850
45,068
145,181
579,837
574,792
2007
ThUS$
-
•
ANNUAL REPORT 2008
LIABILITIES WITH BANKS AND FINANCIAL INSTITUTIONS - Long-term current portion
Tax I.D. N°
Foreign
Foreign
Otros
TOTAL
Monto capital adeudado
% Obligations in foreign currency
% Obligations in local currency
Currency US Dollar
2008
2007
ThUS$
ThUS$
2233
4,132
149
383
0
2382
4,515
0
0
3,02
5,42
100,00%
0,00%
J.P MORGAN CHASE BANK (1)
CALYON N.Y BRANCH (2)
Total
2007
ThUS$
4,132
383
4515
2008
ThUS$
2,233
149
2382
NOTE 14 | LIABILITIES WITH BANKS AND FINANCIAL INSTITUTIONS - LONG-TERM
The detail of long-term liabilities with bank and financial institutions is as follows:
LIABILITIES WITH BANKS AND FINANCIAL INSTITUTIONS - LONG-TERM
Years to maturity
Currency or More than More than More than More than
indexation 1 Up to 2 2 Up to 3 3 Up to 5 5 Up to 10
Tax I.D. N°
Foreign
J.P. MORGAN CHASE BANK (1)
Foreign
CALYON N.V. BRANCH (2)
TOTAL
Obligations foreign currency (%)
Obligations local currency (%)
Dollars
Dollars
2008
Total
Interest rate
long term average annual
ThUS$
ThUS$
ThUS$
ThUS$
ThUS$
%
-
50,000
50,000
220,000
100,000
320,000
-
220,000
150,000
370,000
4,04%
3,76%
0%
2007
Total
long term
220,000
150,000
370,000
100%
0.00%
NOTA 15 | BONDS PAYABLE
The detail and maturities of bonds payable is as follows:
BONDS PAYABLE
Registration number of
Serie
instruments or identification
Nominal amount Indexation
issued current
Unit of Interest
the bond rate %
Long-term Bonds - current portion
Nº 303
A-1
1.000.000
Nº 303
A-2
2.250.000
Type 144-A
Single 290.000.000
Type 144-A
Total - porción corto plazo
Long-term bonds
Nº 303
Nº 303
Type 144-A
Type 144-A
Total long term
Final
maturity
Par value
Interest
payment
Timing
Repayments
2008
ThUS$
2007
ThUS$
Placement
local/foreign
UF
UF
US$
4.25% 01/10/2012 Semi-annual At maturity
358
806
2,528
429
965
2,528
Local
Local
Foreign
Single 150.000.000
US$
2,174
5,866
2,161
6,083
Foreign
A-1
A-2
Single
Single
UF
UF
US$
US$
4.25%
4.25%
6.75%
4.875%
33,706
75,840
290,000
150,000
549,546
39,491
88,855
290,000
150,000
568,346
Local
Local
Foreign
Foreign
1.000.000
2.250.000
290.000.000
150.000.000
01/10/2012
01/10/2012
15/11/2012
15/03/2014
INDEX
Semi-annual
Semi-annual
Semi-annual
Semi-annual
At maturity
At maturity
At maturity
At maturity
2 01
2 02
•
ANNUAL REPORT 2008
a) ENAP Bonds I-2002 Serie A Subseries A-1 and A-2
semi-annual interest, at a annual rate of 4.25%,
The maturity for both placements is 10 years.
On October 4, 2002, the Company registered in
and principal amortization at maturity.
With semi-annual interest payments and principal amortization at maturity
the Securities Register of the Superintendency of
Securities and Insurance, under No. 303, the issu-
b) International Bonds
ance in the local market of bonds readjustable in
On November 5, 2002, the Company issued and
c) Discount in bond placements
UF, which took place on October 22, 2002. This
placed bonds under regulation 144A in the US
Discounts in bond placements have been de-
placement was issued in two sub-series, A1 and
market for US$290 million, at an annual interest
ferred over the periods equal to those for the
A2, whose characteristics are as follows:
rate of 6.75%.
corresponding placement. The balance is shown
in “Other current assets, short and long-term”,
The placement of bonds in the local market was
On March 16, 2004, the Company issued and
for UF3,250,000. Maturity is at ten years, with
placed 144A type bonds for US$150 million in the
including other expenses for bond placement.
US market, at an annual interest rate of 4.875%.
NOTE 16 | ACCRUALS AND WRITE-OFFS
The detail of accruals is as is follows:
ACCRUALS AND WRITE-OFFS
2008 ThUS$
2007 ThUS$
Vacations
8,633
9,418
Compensation and personnel's benefits
3,379
5,125
Negative equity Innergy Holdings (Note 10)
8,315
5,713
168
168
-
455
SHORT-TERM
Maritime concessions
Barge and tug-boat careening provision
17,700
-
Other
Price adjustment (2)
3,457
1,985
Total
41,652
22,864
5,015
126359
59,173
75,255
and environmental remediation (1)
51,814
56,988
11,073
14,274
LONG-TERM
Income tax (Note 7)
Severance indemnities (Note 17)
Provision for the removal of rigs, normalization of wells
Other long term provisions
Total
729
588
127,804
273,464
(1) Accrual to cover the Company’s expenses for the removal of oil rigs in the Magallanes Strait, normalization of oil wells and environmental remediation.
(2) Accrual to adjust for of the annual reliquidation of the selling price of gas for Methanex, in accordance with the related contract (Train 1). It also includes the invoicing of
the gas delivered by ENAP during 2008, according to an agreement that awaits final approval by both companies.
Write-offs - At December 31, 2008, ENAP wrote - off ThUS$25,599 (ThUS$0 in 2007), related to exploration projects.
•
ANNUAL REPORT 2008
NOTE 17 | SEVERANCE INDEMNITIES
The change in the accrual for severance indemnities is summarized as follows:
SEVERANCE INDEMNITIES
2008 ThUS$
2007 ThUS$
Opening balance at January 1st
75,255
63,687
Increase in accrued
10,340
7,390
-470
-737
-8,689
0
Payments for the year
Effect of switch from current value to actual value (Note 19)
Exchange differences (price-level restatement)
-17,263
4,915
Total
59,173
75,255
NOTE 18 | CHANGES IN EQUITY
a. Changes in equity:
Changes in equity recorded between January 1 and December 31, 2008 and 2007, are as follows:
Changes in equity
Capitalization of reserves and/or profit
Prior year final dividend
Capital increase through issuance of shares
Equity adjustment in investee
Net loss for the year
Paid-in47 capital
Other reserves
Retained earnings
876,701
55,999
932,700
932,700
250,000
1,182,700
(69,167)
1,058
(68,109)
(68,109)
(3,163)
20,943
(50,329)
80,550
50,799
(55,999)
75,350
75,350
49,632
(38,252)
86,730
Through Decree Nº545 of April 20, 2007, the Min-
tion of ThUS$50,799 which corresponded to the
istry of Finance set the program for the transfer
financial net income for the year 2006.
Net income (loss)
for the year
50,799
(50,799)
49,632
49,632
49,632
(49,632)
(957,791)
(957,791)
Total ThUS$
938,883
1,058
49,632
989,573
989,573
(38,252)
250,000
(3,163)
20,943
(957,791)
261,310
Treasury scheduled for December 2007, the Ministry of Finance accepted, to avoid further company indebtedness, compensate these resources
to the Country’s general revenue of part of Enap’s
with the accumulated balance in favor of ENAP
2005 and 2006 net income for a total amount of
Through Ord. Nº1.272 of December 28, 2007, the
ThUS$40,036 (equivalent to ThCh$21,619,278) and
Ministry of Finance transitorily suspended for the
as of June 30, 2007 of the oil price stabilization
ThUS$5,321 (equivalent to ThCh$2,873,340), respec-
year 2007, the transfe r of ENAP’s net income to
Fund, for ThUS$38,044.2, for which a decree was
tively. Subsequently, decree Nº686 of December 18,
the Treasury. At the same time, it transitorily an-
issued, according to current legal regulations in
2007, of the Ministry of Finance, annulled what was
nulled for that year, the transfer of net income for
this respect. Likewise, it authorized the capital-
stipulated by the previous decree.
any reason, to complete the 14% return on equity
ization net income for ThUS$5,200 to finance the
with retained earnings from previous periods.
pipeline Pecket Esperanza, which had previously
been accepted through Ord. Nº915, of October 3,
On May 14, 2007, the Ministry of Finance,
through Ord. Nº 430 authorized the capitaliza-
In relation to the ThUS$45,357 transfer to the
INDEX
2007, due to its social benefits. The difference,
2 03
2 04
•
ANNUAL REPORT 2008
b) To temporarily suspend for 2009, the policy
which is ThUS$2,111.8 will be maintained as a bal-
Petróleo in the amount of ThUS$250,000, which
ance in favor of the Treasury.
will be financed with resources available in the
form of financial assets of the Treasury. This capi-
Through Decree No. 148, effective as of August
tal contribution was completed through Supreme
13, 2008, the Ministry of Finance authorized the
Decree No. 1389, dated October 29, 2008, whereby
reduction of retained earnings by ThUS$38,252,
the Ministry of Finance proceeded to modify the
that ENAP must transfer a minimum level of
which was classified as the distribution of earn-
budget of the Treasury, thus enabling the capital
resources to the State, whether as income tax
ings relating to year 2005 and thus the net bal-
contribution to occur on November 10, 2008.
(40%) and/or as advanced profit sharing consisting of 14% of profitability over equity, calculated
ance owed by the State to ENAP was reduce in
compliance with Law No. 20,063, updated by Law
No. 20,115, which created the fund for stabilizing
with retained earning from prior periods.
the fuel prices derived from petroleum.
of transferring to ENAP 100% of the subsidiar-
Article 2 of Law No. 20,278 authorized the Ministry of Finance to make a one time, extraordinary
ies’ annual dividends, relating to the year ended
capital contribution to Empresa Nacional del
December 31, 2008.
b. Other reserves:
Movements in other reserves are as follows:
Other reserves
Accumulated adjustment for translation of foreign subsidiaries
2008 ThUS$
2007 ThUS$
(76,029)
(76,029)
632
3,795
25,068
4,125
(50,329)
(68,109)
Net shareholders' equity changes
Other reserves
Total
c. Translation adjustments of foreign subsidiaries
This item primarily consists of the reserve for translation adjustments of foreign subsidiaries as a result of changes in foreign investment and from the
valuation of the respective liabilities obtained to acquire this investment until December 2004.
Translation adjustments of foreign subsidiaries
Balances at
Annual net variation
01-01.2008
ThUS$
Enap Sipetrol S.A.
Other related companies
TotaL
Balances at
Investment
Liability
2008
2007
ThUS$
ThUS$
ThUS$
ThUS$
(72,666)
-
-
(72,666)
(72,666)
(3,363)
-
-
(3,363)
(3,363)
-
(76,029)
(76,029)
(76,029)
-
•
ANNUAL REPORT 2008
d. Net changes in equity
From January 2005 changes in equity of investees that kept their accounting in local currency are recorded in the line net changes in equity. The changes
in the period are as follows:
Balances at
01-01-2008
ThUS$
574
Electrogas S.A.
Empresa Nacional de Geotermia S.A.
Investment
Liability
ThUS$
ThUS$
(452)
-
Balances at
2008
ThUS$
122
2007
ThUS$
574
1
-
-
1
1
270
(231)
-
39
270
713
(7)
-
706
713
Enap Sipetrol S.A.
(10)
(371)
-
(381)
(10)
93
-
-
93
93
3
2
-
5
3
Enercon S.A.
Gas de Chile S.A.
Geotérmica del Norte S.A.
62
(1,600)
-
(1538)
62
(114)
-
-
(114)
(114)
Innergy Holding S.A.
157
(102)
-
55
157
Inversiones Electrogas S.A.
231
-
-
231
231
Norgas S.A.
431
(230)
-
201
431
Oleoducto Trasandino (Chile) S.A.
206
(172)
-
34
206
Petrosul S.A.
232
-
-
232
232
Sociedad Nacional de Oleoductos
893
-
-
893
893
53
-
-
53
53
3,795
(3,163)
-
632
3,795
Balances at
01.01.2008
Investment
Liability
Balances at
2008
2007
ThUS$
ThUS$
ThUS$
ThUS$
4,125
-
-
4,125
4,125
-
20,943
-
20,943
-
4,125
20,943
-
25,068
4,125
GNL Chile S.A.
Sociedad Nacional Marítima
TotaL
e. Other reserves
Other reserves are as follows::
Other reserves
Technical revaluation of fixed assets of investee SONACOL S.A.
Equity adjustment in investee PETROPOWER ENERGIA LTD.
Totales
INDEX
2 05
206
•
ANNUAL REPORT 2008
NOTE 19 | OTHER NON-OPERATING INCOME AND EXPENSES
The detail of other non-operating income and expenses is as follows:
2008
ThUS$
2007
ThUS$
-
5,544
A. OTHER INCOME:
Gain on sales of property, plants and equipment
Revenue from miscellaneous services
2,001
2,109
Dividends received
5,579
10,700
11,075
-
8,689
-
Extraordinary revenue from payment of bonds to partners under Oil Operations Special Contract (CEOP)
(Note 32)
Effect of switch from current to actual value (1)
Tax recovery (2) - 26,189
Other income
Total
-
26,189
2,372
1,029
29,716
45,571
-
(2,981)
B. OTHER EXPENSES:
Provision for valuation of investments
Lower Stamp Tax refund (2)
Fixed assets write-offs
Expenses for severance indemnitie plan
(5,485)
-
(26)
(47)
(138)
(126)
Other expenses
(1,026)
(2,381)
Total
(6,675)
(5,535)
(1) Effect of changing the methodology for valuing severance indemnities from the current value to accrued value (See N ote 17).
(2) In December 2008 the Chilean Internal Revenue Service calculated the Stamp Tax, resulting in a lower refund for the Company as compared to 2007.
•
ANNUAL REPORT 2008
NOTE 20 | EXCHANGE DIFFERENCES
The detail of exchange differences credited (charged) to income is as follows:
Assets (charges)/credits
Cash
Trade and miscellaneus receivables
Notes and accounts receivable from related companies - current portion
Other assets
Liabilities (charges)/credits
Accounts payable
Notes and accounts payable to related companies - current portion
Accruals current portion
Notes and accounts payable to related companies - long-term
Accruals in long-term
Net foreign exchange difference (loss)
Currency
Chilean peso
Chilean peso
Chilean peso
Chilean peso
Chilean peso
Chilean peso
Chilean peso
2008 ThUS$
(-2,029)
1,266
(86)
(27,363)
61
(368)
(2,029)
(30,548)
2007 ThUS$
1,249
1,962
71
4,002
75
478
1,729
9,566
Chilean peso
Chilean peso
Chilean peso
Chilean peso
Chilean peso
Chilean peso
Chilean peso
3,042
163
(288)
3,468
518
19,284
(15,509)
10,678
(19,870)
(664)
(45)
(3,209)
(1,241)
(157)
(4,931)
(18,495)
(28,742)
(19,176)
The currency column indicates Chilean pesos, as since January 2005 ENAP keeps its accounting in US dollars, in accordance with Note 2 c.
NOTE 21 | EXPENSE ON ACCOUNT OF ISSUE AND PLACEMENT OF SHARE CERTIFICATES AND DEBT INSTRUMENTS
The detail of expenses for bond issuance shown in others current assets and other in other assets is as follows:
Short term
2008
ThUS$
218
Disbursement on bond issue - local
Increase in discount on bond issue - local
Disbursement on bond issue - international
Increase in discount on bond issue - international
Total
INDEX
Long term
2007
ThUS$
254
2008
ThUS$
599
2007
ThUS$
957
562
658
1,546
2,471
1,339
1,340
4,469
5,808
272
273
858
1,130
2,391
2,525
7,472
10,366
2 07
20 8
•
ANNUAL REPORT 2008
NOTA 22 | STATEMENT OF CASH FLOWS
The detail of cash and cash equivalents are is follows:
STATEMENT OF CASH FLOWS
2008 ThUS$
2007 ThUS$
8,522
3,538
Cash
Time deposits
-
6,281
-
17,119
Other current assets (1)
56,583
-
Total cash and cash equivalents
65,105
26,938
(1) Corresponds to the following resale agreements:
FINANCIAL INSTITUTION
Banco Santander Chile
START
END
CURRENCY
30/12/08
5/1/09
$
SUBSCRIPTION
THUS$
23,843
RATE
%
0,50%
BOOK VALUE
THUS$
23,576
23,578
Banco de Chile
30/12/08
5/1/09
$
23,843
0,52%
Banco de Crédito e Inversiones
30/12/08
5/1/09
$
9,537
0,49%
57,223
TOTAL
9,429
56,583
Financing and/or investment transactions that did not generate cash flows
In December 2008, the account receivable from Enap Refinerías S.A. was capitalized in part (See Note 10 (16) ).
During 2007 the account receivable from Enap Sipetrol S.A. was partially capitalized (See Note 10 (6)).
NOTE 23 | DERIVATIVE INSTRUMENTS
1.- Cross-currency swaps:
In order to hedge UF - US dollar fluctuation risk
and US$5,130,000, respectively. The new swap
2003 and 2005, ENAP entered into several interest
related to a 10-year, UF3,250,000 bond issued
for UF2,956,916.23 was entered into with ABN
rate swaps for 100% of the principal of such loans.
in the local market on October 22, 2002, ENAP
AMRO whereas the new swap for UF293,083.77
entered into two cross currency swaps. The first
was entered into again with Citibank.
In order to hedge against the risk of the variable
interest rate of the US$150,000,000 syndicated
one was entered into with JP Morgan on October 22, 2002, for a total of UF2,956,916.23 which
ENAP maintains a third UF/USD Cross Currency
loan obtained in December 2006, ENAP entered
is equivalent to 91% of the principal. The second
Swap, entered into on July 13, 2005 with ABN
into three interest rate zero-cost collars.
one was entered into with Citibank on May 11,
AMRO, with a maturity of August 25, 2018, aimed
2004 for UF293,083.77 which is equivalent to 9%
at hedging UF - US dollar fluctuation risk related
Also, to hedge against the risk of fluctuations
of the principal.
to a 13-year mortgage lease on the ENAP corpo-
in the 3- month Libor interest rate for short-
On May 30, 2008, both swaps were terminated
rate building. This lease was obtained from San-
term notes and accounts payable, in 2005
tander bank on June 28, 2005.
ENAP entered into an interest rate swap for
US$150,000,000 maturing in December 2010.
early, and two new swaps were entered into for
the same amounts in order to hedge the bond
2.- Interest rate swaps y zero-cost collars:
mentioned in the preceding paragraph. The early
In order to mitigate the interest rate risk of its
termination generated a gain of US$60,896,888
long-term syndicated loans obtained between
The detail of derivative contracts is as follows:
21,017
50,000
CROSS CURRENCY SWAP CCPE
CCTE
CCTE
CCTE
CCTE
CCTE
CCTE
CCTE
CCTE
CCTE
S
S
S
S
INDEX
S
S
ZERO COST COLLAR
ZERO COST COLLAR
ZERO COST COLLAR
50,000
50,000
50,000
80,000
70,000
70,000
150,000
50,000
12,256
contract ThUS$
contract
123,652
Value of
Type of
Type of derivative
DERIVATIVE INSTRUMENTS
IV Quarter 2013
IV Quarter 2013
IV Quarter 2013
III Quarter 2013
III Quarter 2013
III Quarter 2013
IV Quarter 2010
III Quarter 2009
III Quarter 2009
III Quarter 2018
IV Quarter 2012
IV Quarter 2012
or expiry
Due date period
Interest rates
Interest rates
Interest rates
Interest rates
Interest rates
Interest rates
Interest rates
Interest rates
Interest rates
Exchange rate
& interest rates
Exchange rate
& interest rates
Exchange rate
Specific Item
C
C
C
Purchase / Sale
institutions
50,000
50,000
50,000
40,000
40,000
40,000
term liabilities
50,000 Other assets / long
term liabilities
term liabilities
term liabilities
term liabilities
term liabilities
long term liabilities
current liabilities /
3,704
2,796
3,672
12,245
10,459
10,465
4,477
1,019
1,019
252
-
-
-
-251
-250
-251
-9
-174
-174
-
-3,797
-37,429
37,429
3,797
ThUS$
-3,704
-2,796
-3,672
-11,994
-10,209
-10,214
-4,468
-845
-845
252
-
-
ThUS$
Unrealized
Effect on income
Realized
ThUS$
Amount
Accounts affected
•
banks and financial
Obligations with
institutions
banks and financial
Obligations with
institutions
banks and financial
Obligations with
institutions
banks and financial
Obligations with
institutions
banks and financial
Obligations with
institutions
banks and financial
Obligations with
payable
150,000 Other assets / Other
liabilities
150,000
institutions
Notes and accounts
/ other current
banks and financial
50,000 Other current assets
liabilities
50,000
institutions
Obligations with
/ other current
50,000 Other current assets
banks and financial
50,000
term liabilities
Obligations with
long term
13,354 Other current assets/
term liabilities
other assets / long
term liabilities
other assets / long
other assets / long
13,354
9,879
99,668
ThUS$
Amount
Value
of item Asset / Liability
hedged Name
vct. and creditors in
Long term Obligations
Bonds
Bonds
Name
Transactions hedged
Position
ANNUAL REPORT 2008
2 09
21 0
•
ANNUAL REPORT 2008
NOTE 24 | CONTINGENCIES AND RESTRICTIONS
In addition, the Company has been sued for al-
As a result of the oil spill in San Vicente Bay on
leged breach of contract in 2 civil lawsuits in-
May 25, 2007, at terminal B of Bio Bio refinery
a. Lawsuits:
volving approximately ThUS$5,228. In one of
owned by Enap Refinerías S.A., on December
Currently, the Company has 14 labor lawsuits
these lawsuits the lower court ruling denied
2007 and January 2008, respectively, two law-
which involve approximately ThUS$3,932 (in 8
completely the plaintiff’s claims, but the plaintiff
suits (cases Nos. 4-2007 and 17-2007) were
of them the amount involved can not be deter-
appealed. ENAP answered the other lawsuit and
served to ENAP seeking payment of damages.
mined so far). This figure includes 10 lawsuits
both parties agreed to postpone a conciliation
Regarding the first of these lawsuits the Val-
where ENAP is being sued for its subsidiary lia-
hearing for March 2009. No provision has been
paraiso Court of Appeals has yet to pass a ruling
bility. No provision has been recorded in connec-
recorded in connection with these lawsuits, as
on a resolution that denied the accumulation of
tion with these lawsuits, as ENAP’s management
ENAP’s management and lawyers believe it is
these lawsuits into a single one (case No. 931-
and lawyers believe that it is unlikely that they
unlikely they will cause the Company to make
2008 at Valparaiso Court of Appeals). Regarding
will cause the Company to make any significant
any significant disbursement.
the second one, a lawsuits accumulation petition
The Company has been sued in 3 civil lawsuits,
quested to be sent this case, in connection with
was denied (the Valparaiso Court of Appeals re-
disbursement.
The Company is being sued in 2 lawsuits (in 1
one involving ThUS$11 and seeking the court to
the denial of a lawsuits accumulation petition as-
of them the amount at stake can not be deter-
rule that the statute of limitations has expired for
sociated to case No. 4-2007). ENAP alleges that
mined) for environmental remediation and regu-
the Company to auction off a property for non-
it has no liability because the pipeline and other
larization of easements, as well as for payment of
payment of a mortgage and other obligations;
installations involved in the oil spill are owned by
damages, involving approximately ThUS$19,798.
and two seeking payment of damages worth
Enap Refinerías S.A..
The fact that no lawsuit ruling can be predicted
ThUS$471. No provision has been recorded in
prevents the Company from accurately assessing
connection with these lawsuits, as ENAP’s man-
On October 13, 2008, ENAP sued Mr. Julio Rojas
the outcome of this lawsuit. However, ENAP’s
agement and lawyers believe that it is unlikely
Peñaloza with the 34th Criminal Court of San-
management and lawyers believe it is unlikely it
that they will cause the Company to make any
tiago, alleging that the defendant repeatedly
will cause the Company to make any significant
significant disbursement.
committed fraud against the Chilean State prior
to June 16, 2005. Also on October 13, 2008, the
disbursement. For this reason, no provision has
been recorded in the financial statements.
A lawsuit is still in progress in connection with
criminal court presented the charges to the
the establishment and use of easements for the
ENAP, as plaintiff, has filed 10 lawsuits, involving
Concón-Maipú pipeline, operated by the entity
accused but claimed it had no jurisdiction, send-
approximately ThUS$4,907, in connection with
Sociedad Nacional de Oleoductos. Whether act-
ing the case to the 32nd Criminal Court of Santi-
easements (in 7 of them the amount involved
ing as defendant of plaintiff, ENAP will not be
ago. At the same time, the Centro-Norte District
can not be determined so far). No provision has
affected by the outcome of this lawsuit in its
Attorney office of Santiago began to investigate
been recorded in connection with these lawsuits,
finances, because in agreements entered into
similar charges, but occurred after June 16, 2005,
as ENAP’s management and lawyers believe that
with Sociedad Nacional de Oleoductos it is stat-
under case No. RUC 0800910804- 2.
it is unlikely that they will cause the Company to
ed that the latter has to bear any payments that
make any significant disbursement.
may arise in cases like this.
of works inpector - Temporary
Company
ENAP
INDEX
ENAP
ENAP
territorio marítimo
Company
Parent
Dirección general del
ENAP
Company
Parent
Aeronáutica Civil
Dirección General de
well. Maturity in December 2009;
January 2009; for ThUS$26.
construction of works. Maturity in
Guarantees cost of removal and
1,452
matures in January 2010; for UF
de Pascua (Easter Island), which
"Aeropuerto Mataveri", in Isla
Guarantees concession in
for UF 150.
CH - 257". Cachapoal exploratory
project"Temporaryaccess to road
Chilena.
Guarantees the correct executionof
Company
Vialidad, Región de
Parent
in December 2009; for UF 72.
Dirección Regional de
access to road CH - 257". Maturity
execution of project "Temporary
Chilena.
Guarantees civil liability in
Company
UF 43
Parent
Cachapoal exploratory well.
Maturity in December 2009; for
access to road CH - 257".
of signaling in project "Temporary
Chilena.
Guarantees the correct application
Company
Parent
in December 2009; for UF 43.
Chilena
access to road CH - 257. Maturity
ENAP
Guarantees compliance with orders
Parent
ENAP
Dirección Regional
Relationship
Debtor
Name
Description
Direct Guarantees
b. Direct Guarantees
Performance bond
Performance bond
Performance bond
Performance bond
Performance bond
Performance bond
Type of guarantee
Type
Book value
Committed assets
2008
2007
at December
Outstanding balances
2008
ThUS$26
ThUS$49
ThUS$5
ThUS$2
ThUS$1
ThUS$1
after
2009 and
Assets
Assets
•
ANNUAL REPORT 2008
21 1
Enap Sipetrol
Methanex
Petropower Energía Ltda.
Subsidiary
Subsidiary
Subsidiary
Type of
S.A. established in several contracts entered
are valid up to year 2018.
not be cash -valued in advance. Guarantees
complied with. The remaining obligations can
obligation of capital contribution has been
or omissions by Enap Refinerías S.A.. The
Contract for dishonest and negligent actions
land for the project, and (iii) Indemnity
(15% ownership), (ii) Contract for use of
for Capital Contribution to the company
into for the Petropower project (i) Contract
Several
liability
Guarantee for obligations of Enap Refinerías
services for approximately ThUS$18,000 a year.
teed obligation is the payment of processing
Petropower, in force until 2018. The guaran-
Several
liability
S.A. in the processing agreement signed with
liability
Several
guarantee
Guarantees the obligations of Enap Refinerías
08.08.2016.
to the methane price) and valid up to
a base price of 0.75 US$/MM Btu (indexed
to 2,375,250,000 SCM(9,300 Kcal/m3), at
contract). The remaining obligation amounts
and Methanex (equivalent to 30% of the
for Sale of Gas between Sipetrol/YPF
of Sipetrol established in the Contract
Guarantee for compliance with obligations
Relationship Description
Book VALUE
Committed assets
2008
2007
balances
Outstanding
2008 Assets
after
(*)
(*)
(*)
2009 and
Assets
•
Petropower Energía Ltda.
Debtor
Argentina S.A.
NAME
Indirect guarantees
c. Indirect guarantees
21 2
ANNUAL REPORT 2008
INDEX
(Etalsa)
Eteres y Alcoholes S.A.
Banco KfW
S.A. (Etalsa)
Eteres y Alcoholes
Gasoducto del Pacífico S.A. Innergy Holding S.A.
the creditors of the guarantee.
This is subject to the effective gas supply by
nually adjusted up to ThUS$12,750 in 2019;
equivalent to ThUS$6,000 in 2004, and is an-
in effect until 2019. The 25% guarantee is
agreement obligation started in 2004 and is
Agreement with YPF- Bridas - Pluspetrol. The
readjusted up to ThUS$15,000 in 2019.
approximately ThUS$8,000 in 2002, annully
2019. The 25% guarantee is equivalent to
obligaton is in effect from 1999 and until
with Gasoducto del Pacífico. The agreement
tions of Innergy in Gas Transport Agreement
(PSA), which is valid until 2017.
stipulated in the Process Services Contract
Garantees obligations of Enap Refinerías S.A.
finance the project, valid until 2012.
ENAP to guarantee payment of loan to
liability
Several
shares
Pledge on
liability
Several
Several
liability
obligations of Innergy in Gas Purchase
Investee Pledge on shares of Etalsa S.A. owned by
Subsidiary
Type of
guarantee
Guarantees (25%) compliance with the
Investee Guarantee (25%) compliance with obliga-
Innergy Holding S.A. Investee
YPF y Panamerican
NAME
Debtor
Indirect guarantees
Etalsa
shares in
2.087
ThUS$ 2.950
Book VALUE
Committed assets
2008
2007
balances
Outstanding
2008 Assets
after
(*)
(*)
(*)
(*)
2009 and
Assets
2.087 shares in Etalsa
•
ANNUAL REPORT 2008
21 3
Société Généralé
del Bio Bio S.A.
Compañía de Hidrógeno
(Prodisa)
project, current up to year 2015.
repayment of credit obtained for funding of
Bío S.A.
Pledge of shares in Compañía de Hidrogeno
(PSA). Expires in the year 2015.
S.A. stipulated in the Processing Contract
(PSA) 2005, and expires in the year 2020.
del Bío Bío S.A. owned by ENAP, to guarantee
Investee
Subsidiary
Subsidiary
project until 2016.
payment of the loan obtained to finance the
de acciones
comercial
Prenda
liability
Several
liability
Several
de acciones
comercial
Prenda
stipulated in the Process Services Contract,
which is valid until 2018.
Several
liability
Garantee obligations of Enap Refinerías S.A.
Hidrogeno del Bío
Compañía de
shares owned by ENAP, guaranteeing the
S.A. (Prodisa)
Productora de Diesel S.A.
Pledge of the Productora de Diesel S.A.
Productora de Diesel Investee
Banco BNP Paribas
Subsidiary
de acciones
obtained to finance the project, which is
S.A..
del Bío Bío
Hidrogeno
de
Compañía
shares in
50.000
S.A.
de Diesel
Productora
shares in
2,219,987
S.A.
Petrosul
ThUS$ 540
ThUS$ 1.303
ThUS$ 2.092
2008
2007
balances
Outstanding
2008 Assets
after
(*)
(*)
(*)
(*)
(*)
(*)
2009 and
Hidrogeno del Bío Bío S.A..
50.000 shares in Compañía de
Productora de Diesel S.A.
2,219,987 shares in
1.579 shares in Petrosul S.A.
Assets
•
shares in
1.579
Book VALUE
Committed assets
valid until 2012.
Prenda
comercial
ENAP to guarantee the repayment of credit
Type of
guarantee
Pledge on shares of Petrosul S.A. owned by
Petrosul S.A.
Investee
Petrosul S.A.
Banco KfW
NAME
Debtor
Indirect guarantees
21 4
ANNUAL REPORT 2008
Energía Concón S.A.
Banco BNP Paribas
GNL Quintero S.A.
Investee
Investee
Subsidiary
Type of
Contract and Construction Contract
under the Engineering Contract, Procurement
ENAP’s ownership interest in that company,
contracted by GNL Quintero S.A. prorata of
Guarantees the payment obligations
rent up to year 2020.
liability
Several
de acciones
credit obtained for funding of project, cur-
Prenda
comercial
owned by ENAP, to guarantee repayment of
Pledge of shares in Energía Concón S.A.
2008) and expires in the year 2020.
plant is accepted (estimated for October
(PSA). The obligation originates once the
Several
liability
guarantee
(*) The release of these guarantees is related to compliance with contracts that gave rise to those guarantees.
Company
Chicago Bridge & Iron
Energía Concón S.A.
(ENERCON)
NAME
Debtor
Indirect guarantees
S.A.
Concón
Energía
shares in
176.749
ThUS$.281
Book VALUE
Committed assets
2008
2007
balances
Outstanding
2008 Assets
after
(*)
(*)
(*)
2009 and
Concón S.A.
176.749 shares in Energía
Assets
INDEX
•
ANNUAL REPORT 2008
21 5
21 6
•
ANNUAL REPORT 2008
d. Commercial Commitments:
US$32 million in the construction of a hydrogen
between US$4.7 million and US$5.7 million for
The Company has the following commercial
plant in the Bío Bío Refinery in Hualpén, which
the di- iso-propyl-ether plant. This agreement
commitments related to its operations:
started to operate in 2005. All the hydrogen pro-
expires in 2017. At the end of the agreement,
duced by the plant is used by Enap Refinerías
ENAP Refinerías S.A. may exercise its option to
(1) PETROPOWER
S.A. in its facilities.
purchase the plant for approximately US$ 2.6
million. At the date of delivery of the plant (Sep-
The Company, through its subsidiary Enap Refinerías S.A., in 1994 entered into an agreement
Therefore, there is a 15 year Processing Service
tember 2002), the Enap Refinerías S.A. recorded
with Petropower providing for the payment of an
Contract between the Compañía de Hidrógeno
a transaction in a manner similar to a purchase
annual processing fee of approximately US$17.4
del Bío Bío S.A. and Enap Refinerías S.A. which is
of a fixed asset (leasing). ENAP guarantees the
million for the right to operate its delayed coking
extensible for an additional year in cases specified
obligations of Enap Refinerías S.A under the
Processing Service Contract.
and hydrotreatment plant and an annual fee of ap-
in the same contract, under which the company
proximately US$9.9 million for the supply of cer-
pays a net US$4.7 million annual plant operating
tain energy products. This agreement is subject to
fee. At the end of this period, Enap Refinerías S.A.
(5) PETROSUL
annual increases until its expiration in 2018.
will purchase the plant at its residual value.
ENAP, through its subsidiary Enap Refinerías
Other conditions in the agreement require that,
At the date of delivery of the plant, Enap Re-
agreed to invest US$27 million to build two sulfur
in case of a reduction in the annual income de-
finerías S.A. recorded a transaction in a similar
plants. These plants started operating in the last
fined in the processing contract and business
manner to a purchase of a fixed asset (leasing).
quarter of 2003. ENAP Refinerías S.A. is obligat-
S.A., in conjunction with other shareholders, has
agreements and after the Operator of the plant
ed to pay an annual operating fee for the plants
has contributed with 10% of such shortfall ENAP
and its subsidiary Enap Refinerías S.A. participate
erías S.A. under the Processing Service Contract.
in 50% and Foster Wheeler in 50% of the balance
of between US$3.9 million and US$4.6 million.
This agreement expires in 2018. At the expiration
of the agreement, the subsidiary is obligated to
of such shortfall, which should not exceed US$1.4
(3) INNERGY HOLDING S.A.
purchase both plants for the contract’s nominal
million per year.
ENAP has committed to contribute US$48.43 mil-
amount. At the date of delivery of both plants,
lion as a capital participation in the related com-
the subsidiary recorded this transaction in a way
In addition, Enap Refinerías S.A. is obligated to ei-
pany Innergy Holding S.A., of which US$44.70
similar to the purchase of a fixed asset (leasing).
ther purchase or arrange for the sale of assets of
million have been paid as of December 31, 2008.
Petropower Energía Ltda. for not less than US$43
ENAP guarantees the obligations of Enap Refinerías S.A under the Processing Service Contract.
million at the expiration of the agreement (2018)
Innergy Holding S.A. and its subsidiaries have a
or on any other date agreed by the parties.
negative equity, net losses and operating losses
(6) PRODISA
for the year. In this respect, the shareholders are
studying new business alternatives to ensure the
together with other shareholders, had invested
erías S.A under the Processing Service Contract.
company's operating continuity.
US$110 million in the construction of a Gas Oil
(2) HYDROGEN PLANT AT THE BIO BIO RE-
(4) ETALSA
cracking ) in the Bío Bío Refinery in Hualpén,
FINERY
The Company, and its subsidiary Enap Refinerías
which began operating in 2005.
S.A., has entered into an agreement with ETAL-
together with other shareholders, have invested
SA for the payment of an annual operating fee
Mild Hydrocracking plant ( MHC - Mild Hydro-
•
ANNUAL REPORT 2008
The plant is operated and maintained by Enap Re-
and Man Ferrostaal and the Chilean company
Enap Refinerías S.A. a supply of 2.2 million cubic
finerías S.A., (Refinerías Bío Bío ). There is a 15-year
Construcción e Ingeniería FIM Chile Ltda. The
meters of natural gas per day. It is estimated that
Processing Service Contract between Prodisa y
project started operating in July 2008, and is cur-
the delivery of natural gas will take place in the
Enap Refinerías. After this period, Enap Refinerías
rently in preliminary operations.
second quarter of 2009. ENAP guarantees the
der the contract, the Company pays a net annual
The project is financed through the partners’
subsidiary under the natural gas sales contract.
plant-operating fee of US$13.3 million. At the date
capital contributions (5% of the total investment)
of delivery of the plant, Enap Refinerías S.A. re-
and a syndicated loan arranged by BNP Paribas,
corded a transaction in a manner similar to a pur-
Citigroup and Calyon (95%). Enap Refinerías S.A.
cial contracts of the LNG Project that were defi-
chase of a fixed asset (leasing). ENAP guarantees
together with its parent company ENAP jointly
nitely signed on May 31, 2007. This project has
the obligations of Enap Refinerías S.A. under the
own 49% of the company’s capital and the re-
the purpose of purchasing liquefied natural gas
Processing Service Contract.
maining 51% is owned by Técnicas Reunidas S.A.,
(LNG) abroad, storing it and regasifying it in the
obligations contracted by its Ena p Refinerías S.A.
S.A. will acquire the plant at its residual value. Un-
(7) ENERGIA CONCON S.A.
Man Ferrostaal A.G. and Foster Wheeler Iberia
Regasifying Plant that will be located in the mu-
S.A. in equal participations..
nicipalities of Quinteros and Punchuncaví in the
(8) GNL QUINTERO S.A.
to the central zone of the country.
country’s Region V, and the supply of natural gas
The subsidiary Enap Refinerías S.A. and ENAP have
entered into agreements with Foster Wheeler Ibe-
This sale contract is part of a series of commer-
ria S.A. from Spain, Man Ferrostaal A.G. from Ger-
ENAP jointly guarantees the payment obliga-
many and Técnicas Reunidas S.A. from Spain for
tions contracted by GNL Quintero S.A. prorata
e. Restrictions:
the financing, construction and operation of a de-
of ENAP’s ownership interest in that company
On November 2007, the restrictions stipulated as
layed coking facility in the refinery located in Con-
(20%), under the Engineering Contract, Procure-
covenants in the syndicated loans were released.
cón. This project represents a total investment of
ment Contract and Construction Contract signed
approximately US$430 million. The owner Com-
with CB&I UK Limited, with Southern Tropic
As of December 31, 2008, the company has no re-
pany of the project is a corporation incorporated
Material Supply Company Limited and with CBI
strictions or covenants to comply with its credi-
under Chilean laws under the corporate name of
Montajes de Chile Limitada, respectively, dated
tor banks and public bonds.
Energía Concón S.A. (ENERCON). The aforemen-
Ap ril 30, 2007 for the construction of the LNG
tioned plant will be operated and maintained by
project. The guarantee is for a maximum monthly
Enap Refinerías S.A., (Aconcagua Refinery). There
amount of US$ 26.15 million.
NOTE 25 | GUARANTEES FROM THIRD PARTIES
by Enap Refinerías S.A. and Energía Concón S.A.
(9) GNL CHILE S.A.
As of December 31, 2008, ENAP has received cer-
for a 20 year operating period. After this period,
On May 31, 2007, Enap Refinerías S.A. signed a natu-
tificates of deposit from suppliers or
Enap Refinerías S.A. will purchase the plant at its
ral gas sales contract with GNL Chile S.A. that guar-
residual value. ENAP guaranteed the obligations
antees the necessary supply for the operation of its
contractors to guarantee compliance of service
of Enap Refinerías S.A. under the processing ser-
Aconcagua Refinery in the locality of Concón.
and construction contracts, for ThUS$25,731.
is a processing services agreements entered into
vice agreement.
This contract is for a 21- year period under the
This plant is being built by the trust formed by
mode of “deliver or pay” and for a maximum
Unión Temporal de Empresas (UTE) comprising
contract volume of gas equivalent to a third of
Foster Wheeler Iberia, Initec Plantas Industriales
1.7 million tons a year of LNG, which means for
INDEX
21 7
21 8
•
ANNUAL REPORT 2008
NOTE 26 | LOCAL AND FOREIGN CURRENCY
Assets and liabilities in foreign currency and those assets and liabilities that are readjusted in US dollars at December 31, 2008 and 2007, are as follows:
Assets
Item
Currency
Amount
2008
2007
ThUS$
ThUS$
CURRENT ASSETS:
Cash and banks
US dollars
6,889
371
Non-indexed Ch$
1,633
3,167
Time deposit
US dollars
-
6,281
Indexed Ch$
-
17,119
Trade receivable
US dollars
Non-indexed Ch$
Miscellaneous receivable
US dollars
Non-indexed Ch$
Indexed Ch$
UF
1,840
1,795
46,097
35,335
-
6,013
9,699
9,332
735
1,247
1
28
2,020,964
2,748,435
US dollars
1,315
-
Inventories
US dollars
70,738
113,752
Recoverable taxes
US dollars
-
21
Recoverable taxes
Non-indexed Ch$
7,826
50,234
Prepaid expenses
US dollars
844
929
Deferred taxes
US dollars
35,621
-
US dollars
4,385
5,893
Non-indexed Ch$
UF
780
916
56,584
-
US dollars
377,625
392,726
Investments in related companie
US dollars
712,490
969,283
US dollars
53,778
53,778
US dollars
186,144
200,480
Deferred taxes
US dollars
17,250
3,243
US dollars
-
1,000
4,478
5,431
Indexed Ch$
Property, plants and equipment-net
OTHER ASSETS:
Indexed Ch$
Non-indexed Ch$
Other
US dollars
UF
15
-
54,759
89,085
2,171
3,435
3,543,327
66,585
61,797
2,952
4,593,085
98,068
23,797
4,379
Total Assets
US dollars
Non-indexed Ch$
Indexed Ch$
UF
•
ANNUAL REPORT 2008
Current liabilities:
Item
Up to 90 days
90 days up to 1 year
2008
Currency
2007
2008
2007
Amount
Average annual
Amount
Average annual
Amount
Average annual
Amount Average annual
ThUS$
interest rate %
ThUS$
interest rate %
ThUS$
interest rate %
ThUS$
interest rate %
US dollars
315,332
4.09%
-
-
264,505
4.24%
-
-
Long-term liabilities with banks and
US dollars
2,233
4.44%
4,132
5.42%
149
4.44%
383
5.56%
US dollars
-
-
2,161
4.87%
4,688
6.75%
2,525
6.75%
UF
-
-
-
-
1,178
4.20%
1,397
4.20%
Long-term liabilities current portion
UF
289
3.70%
326
3.70%
883
3.70%
997
3.70%
Accounts payable
US dollars
1,252,360
4.04 %
2,031,372
5.83%
-
-
125,319
6.00%
Non-indexed Ch$
5,850
-
5,108
-
-
-
-
-
Miscelaneous payable
US dollars
1,012
-
1,020
-
-
-
75
-
US dollars
11,228
4.45 %
20,933
5.96%
-
-
-
-
Accruals
US dollars
29,642
-
2,441
-
-
-
5,881
-
Non-indexed Ch$
625
-
11,370
-
11,385
-
3,172
-
Withholdings
Non-indexed Ch$
11,228
-
10,986
-
-
-
-
-
Income tax
US dollars
-
-
-
-
43,065
-
35,088
-
US dollars
3,745
-
765
-
-
-
-
-
Notes payable
US dollars
117,725
3.79 %
145,221
5.16%
187,253
3.79%
-
-
Deferred taxes
US dollars
-
-
-
-
-
-
6,043
-
financial institutions - current portion
Bonds - current portion
TOTAL CURRENT LIABILITIES
US dollars
UF
Non-indexed
Ch$
1,733,277
2,208,045
499,660
175,314
289
326
2,061
2,394
17,703
27,464
11,385
3,172
INDEX
21 9
220
•
ANNUAL REPORT 2008
Long-term liabilities - 2008:
Item
1 up to 3 years
Currency
Liabilities with banks and
3 up to 5 years
5 up to 10 years
More than 10 years
Amount
Average annual
Amount
Average annual
Amount
Average annual
Amount
Average annual
ThUS$
interest rate %
ThUS$
interest rate %
ThUS$
interest rate %
ThUS$
interest rate %
4.44%
320,000
4.44%
-
US dollars
50,000
US dollars
-
-
290,000
6.75%
150,000
UF
-
-
109,546
4.25%
-
-
-
-
6.75%
-
-
-
-
financial institutions
Bonds payable
Notes payable, long-term
US dollars
UF
649 LIBOR 180 + 1.5%
4,092
-
1,065
LIBOR 180 + 1.5%
3.70%
5,631
3.70%
-
-
-
1,843
-
-
-
-
-
-
-
-
51,814
-
-
2,782
-
25,733
-
30,658
-
84,100
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
151,566
-
610,433
-
152,925
-
52,879
-
4,092
-
-
5,631
-
-
-
-
30,658
-
-
-
16,817
-
2,731
1,082 LIBOR 180 + 1.5%
-
Notes and accounts payable to related US dollars
3.70%
433 LIBOR 180 + 1.5%
companies, long-term
Accruals
US dollars
Non-indexed Ch$
US dollars
US dollars
UF
$NOREAJUSTABL
-
112,277
-
2,782
-
25,733
Long-term liabilities - 2007:
Item
Liabilities with banks and
Currency
US dollars
1 up to 3 years
3 up to 5 years
5 up to 10 years
More than 10 years
Amount
Average annual
Amount
Average annual
Amount
Average annual
Amount
ThUS$
interest rate %
ThUS$
interest rate %
ThUS$
interest rate %
ThUS$
-
-
Average annual
interest rate %
100,000,00
5.48%
270,000
5.48%
-
-
4.87%
-
-
-
-
-
financial institutions
Bonds payable
US dollars
-
-
290,000,00
6.75%
150,000
UF
-
-
128,346,00
4.25%
-
Notes payable, long-term
US dollars
UF
Non-indexed Ch$
Notes and accounts payable to
649 LIBOR 180 + 1.5%
4,444
3.70%
433 LIBOR 180 + 1.5%
3,269,00
3.70%
1,082 LIBOR 180+1.5%
7,977
1,281 LIBOR 180 + 1.5%
3.70%
-
-
329
-
-
-
-
-
-
-
US dollars
-
-
-
-
2,360
-
-
-
US dollars
126,359
-
-
-
-
-
71,851,00
-
-
-
2,009,00
-
25,733
-
47,512,00
-
79,407
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
206,415
-
390,433
-
423,442
-
73,132
-
4,444
-
131,615
-
7,977
-
-
-
Non-indexed
Ch$
329
-
-
-
-
-
-
-
Indexed Ch$
-
-
2,009
25,733
-
47,512
-
related companies, long-term
Accruals
Indexed Ch$
US dollars
US dollars
UF
-
•
ANNUAL REPORT 2008
NOTE 27 | SANCTIONS
During the years ended December 31, 2008 and
2007, neither the Company nor its directors or
managers were subject to sanctions from the
Superintendency of Securities and Insurance.
NOTE 28 | SUBSEQUENT EVENTS
On January 15, 2009 ENAP issued bonds of UF
política de traspasos del 100% de los dividendos
9,750,000 over 10 years, with a maturity date of
anuales de las filiales a ENAP, correspondientes al
January 12, 2019 with interest payments due every
ejercicio terminado el 31 de diciembre del 2008.
that ENAP must transfer minimum of resources
as profit sharing consisting of 14% of profitability
to the State, whether as income tax (40%) and/or
six months, at an annual rate of UF+4.33%.
The bonds were placed at 101.72% over par value.
over equity, calculating equity as retained earning
The proceeds from this issuance will be allocated
from prior periods.
to restructure ENAP liabilities.
cember 31, 2008.
b) To temporarily suspend for 2009 the policy
ments have occurred between January 1, 2009,
Ministry of Finance authorized the following:a)
and the date of issuance of these stand-alone fi-
Suspender temporalmente para el año 2009, la
nancial statements.
No other events affecting the financial state-
NOTE 29 | ENVIRONMENT
During the year ended December 31, 2008, ENAP have incurred environment related disbursements as shown in the following tables:
ENVIRONMENT
2008
Conceptos
ThUS$
Environmental impact projects, mitigations and monitoring of environmental commitments
9,145
Environmental approval of projects by SEIA and specific associated studies
595
Effluent treatment and disposal system
891
Solid waste handling and treatment system
127
Environmental incidents mitigate systems
110
Other environmental projects expenses
62
Total
10,930
INDEX
2 21
222
•
ANNUAL REPORT 2008
NOTE 30 | PETROLEUM OPERATION CONTRACTS
The contract is for the exploration and develop-
cial Petroleum Operations Contracts, designed
ment of hydrocarbon fields in the Lenga area,
to explore and develop hydrocarbon fields, the
ENAP and its subsidiary, Enap Sipetrol S.A., have
located in Chile’s Magallanes Region and in the
Caupolican area, which is located in the Magal-
various current exploration and explotation con-
Chilean Antartic. This contract is documented
lanes Region and in the Chilean Antartic, was
tracts, within the framework of its activities in
granted exploration and development by (Reso-
Chile and abroad.
will be formed by a 50% interest by Apache Chile
lution No. 1766 of 2007) an entity formed by
Energia SPA and a 50% interest by ENAP. During
Greymouth Petroleum and ENAP. However this
ENAP’S JOINT OPERATION AGREEMENTS
2008, Apache Chile Energia SPA paid ThUS$6,075
contract has not yet received approval from the
IN CHILE
to ENAP as bond to formalize the Special Opera-
Chilean government.
tion Contract.
NOTE 31 | ADOPTION OF IFRS
Dorado Riquelme Area:
On May 5, 2008, ENAP signed an agreement with
Coirón Area
Methanex Co. to accelerate gas exploration and
Resolution No. 15, dated June 4, 2008, the Mining
Chile is committed to developing a convergence
production in the Dorado Riquelme Area and to
Ministry approved a Special Operation Contract
plan aimed at fully adopting International Finan-
establish a new source of natural gas. Under this
to be entered into by the Mining Ministry on be-
cial Reporting Standards (IFRS). In accordance
agreement, Methanex Co. is expected to con-
half of the Chilean State and an entity formed by
with the Chilean Institute of Accountants and
Circular No. 427 issued on December 28, 2007 by
tribute US$100 million as capital, over the next
Pan American Energy Chile Limitada (PAE) and
3 years. Ownership of this area will be 50% for
ENAP. The contract is for the exploration and
the Superintendence of Securities and Insurance,
Enap and 50% for Methanex Co. This agreement
development of hydrocarbon fields in the Coiron
the Company and its subsidiaries will adopt the
is subject to the approval the Chilean govern-
area, located in Chile’s Magallanes Region and in
IFRS beginning on January 1, 2009.
ment. At December 31, 2008, Methanex Co. had
the Chilean Antartic. This contract is documented
of contributed US$32.6 million to an escrow ac-
As a result of adoption, changes will occur in eq-
count, and is awaiting the final approval of the
will be formed by a 50% interest by Pan Ameri-
uity balances at January 1, 2009 and the determi-
Chilean government.
can Energy Chile Limitada and a 50% interest by
nation of results in future years will be affected.
ENAP. During 2008, Pan American Energy Chile
Also, in 2009, for comparison purposes, the 2008
Lenga Area
Limitada paid ThUS$5,000 to ENAP as bond to
financial statements will have to be presented
Resolution No. 19, dated June 4, 2008, of the
formalize the Special Operation Contract.
under IFRS, and thus they could differ from these
financial statements.
Mining Ministry approved a Special Operation
Contract to be entered into by the Mining Min-
Caupolicán Area
istry on behalf of the Chilean State and an entity
As a result of a Mining Ministry launched na-
formed by Apache Chile Energia SPA and ENAP.
tional and international bidding process for Spe-
•
ANNUAL REPORT 2008
223

report

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