Azernews.Az

By Aynur Jafarova

Azerbaijani state energy company SOCAR attracted borrowings worth $1 billion in 2013, Trend news agency quoted SOCAR Vice President Suleyman Gasimov as saying.

"Recently, we often attract loans from different banks given that the amount of each loan does not exceed $200 million," Gasimov said. "We planned to attract $1 billion this year and we have already attracted it, up to $600 million of which will be directed to repay previous bank debt and $400 million to fund various projects such as the development of the Umid gas field, increasing production at the Guneshli and Oil Rocks fields and construction of a shipyard."

The limit of foreign debt for SOCAR is $2 billion, which the company will comply with for six months under the loan covenant with BNP Paribas. The liabilities of the company cannot exceed this limit until full repayment of the loan portfolio of the bank.

Gasimov also said SOCAR continues to work with local banks -- such as the International Bank of Azerbaijan (IBA), XalqBank and Kapitalbank -- in the area of fundraising.

"Loans borrowed from abroad are cheaper. The Central Bank of Azerbaijan's interest rate is at the level of 4.75 percent. That is, our banks cannot provide us with loans at a below-five percent rate while foreign banks lend funds at the rate of Libor plus 2.3-2.5 percent, which is even lower than 0.5 percent. Therefore, we are not so interested in attracting funds from our banks," Gasimov said.

SOCAR is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in domestic and international markets, and supplying natural gas to industry and the public in Azerbaijan. Three production divisions, two oil refineries and one gas processing plant, an oil tanker fleet, a deep water platform fabrication yard, two trusts, one other institution, and 22 subdivisions are operating as corporate entities under SOCAR.

SOCAR includes Azneft production association, which runs onshore and offshore oil producing companies, Azerkimya production association, and Azerigas production association.

SOCAR is the only producer of oil products in the country and also owns gas-filling stations in Azerbaijan, Georgia, Ukraine and Romania. SOCAR has a network of gas stations in Switzerland as well.

SOCAR is also a co-owner of the largest Turkish petrochemical complex, Petkim.

SOCAR has representative offices in Georgia, Turkey, Romania, Austria, Switzerland, Kazakhstan, Britain, Iran, Germany and Ukraine as well as trading companies in Switzerland, Singapore, Vietnam, Nigeria, and other countries.