MercoPress. South Atlantic News Agency

Record oil prices benefit Magallanes development

Oil record prices are having a positive impact for Magallanes Region through the Regional Development Fund, Fondema that is financed with duties on hydrocarbons local production.

In spite of declining oil and gas production in Magallanes, Chile's government owned company ENAP has been paying into Fondema an average 3 million US dollars annually during the last three years, but this is forecasted to reach between 4 and 5 million US dollars in 2004 if international oil prices stabilize at their current level.

The Fondema creation bill dates back to 1994 and since then an estimated 27 million US dollars should have been pumped into the local economy through several projects.

"Actually the money goes to the Finance Ministry and once they approve a project, the funds appear. So far since 1994 over 15 million US dollars have been reinvested in the Magallanes economy", said Miguel Palma, local representative of the Chilean Finance Ministry.

The rest of the funds are deposited in a bank and are only available when viable projects are assessed and approved.