SOFAZ to fund new projects soon

By Gulgiz Dadashova

Azerbaijan's state oil fund SOFAZ has already invested about 70 million manats in the construction of a new generation floating drilling rig in Azerbaijan, SOFAZ head Shahmar Movsumov said.

Some 388.575 million manats are envisaged to be allocated from SOFAZ under the project.

The construction of the new generation drilling rig to be built for SOCAR's needs is due to start by late 2013.

The cost of the new floating drilling rig together with the taxes will amount to more than $1 billion.

Movsumov told Trend news agency that the financing of the new projects will be carried out by SOFAZ soon.

The new projects to be funded by SOFAZ include the construction of the Trans Anatolian gas pipeline TANAP, construction of a new oil refinery of the Azerbaijani state energy company SOCAR in Turkey, creation of a new oil and gas refining and petrochemical products complex in Azerbaijan, as well as the project on the development of broadband internet in the country.

Movsumov said that of all the new projects, the money transfer process started only within the framework of the drilling rig project.

"These are not allocations but the process of financing, that is, the money does not leave, but remains in the Fund's portfolio," Movsumov said.

He said further that the Fund will be the co-owner of the new drilling rig, which will be operated by Caspian Drilling Company (CDC) where SOCAR holds 92.44 percent participating interest.

Keppel FELS Limited has been chosen as the contractor for the drilling rig's construction. CDC signed an agreement with the Singaporean company on carrying out the construction work.

The new drilling rig will be designed for the drilling of 8,000 meters deep wells at a sea depth of 1,000 meters. The construction of the drilling rig is planned to end in 2016.

The rig will be used for drilling at Azerbaijan's prospective structures and fields, such as Umid, Babek, Karabakh, Ashrafi and others.

Azerbaijan needs to construct four new floating drilling rigs, taking into the consideration the extensive projects in the Azerbaijani sector of the Caspian Sea, in particular, drilling at the prospective Babek structure, the development of Absheron gas-condensate field, implementation of the second phase of the development of Shah Deniz gas-condensate field, etc.

SOFAZ was established in December 1999 by a presidential decree. Its primary objectives are to help maintain macroeconomic stability in the country and to generate wealth for present and future generations.

Projected total cost (average amount) of the SOFAZ investment portfolio for 2013 was set at 25.2 billion manats, while the figure was projected at the level of 23 billion manats in late 2012.