SOCAR attracts additional funds from IBA

6 April 2016 17:35 (UTC+04:00)

1 789

By Fatma Babayeva

SOCAR, the state energy company of Azerbaijan attracts 200 million manats ($131.7 million) from the International Bank of Azerbaijan (IBA) for 2016.

The funds that SOCAR will get is the next tranche of loans allocated for the drilling works in the Caspian Sea and modernization of the Baku Oil Refinery named after Heydar Aliyev, SOCAR vice-president on economic issues Suleyman Gasimov said on April 5.

SOCAR received the first tranche of the loan in October, 2015. The remaining 400 million manats ($263.4 million) will be paid according to the schedule.

“We plan to attract additional 200 million manats during this year, and the remaining 200 million manats will be issued after the use of the funds of the second tranche”, the vice-president of SOCAR added.

The total amount of the loan is 1.86 billion manats ($1.78 billion). The Finance Ministry will act as the guarantor.

Out of the total amount of the loan, 1.26 billion manats will be directed to modernize the oil refinery named after Heydar Aliyev, while 600 million manats will go to drilling at the 'Bulla Deniz' field and at the shallow part of the Gunashli field

The loan for the modernization of oil refinery is intended for around 13 years, the first three years will be paid back at a discounted rate, and it will be repaid over 10 years in equal amounts from the state budget and SOCAR’s authorized capital.

The loan for drilling operations designed for five or six years, and the source for repayment of the loan is revenues from the sale of produced hydrocarbons.

The process of modernization of the Baku Oil Refinery named after Heydar Aliyev will be completed by the end of 2018. Refinery processing capacity after reconstruction will increase from six to 7.5 million tons of oil per year.

SOCAR announced the elimination of the refinery Azneftyag and combining it with the Baku Oil Refinery named after Heydar Aliyev in January 2015. The decision was taken as part of work to improve and optimize the structure of the State Oil Company.

---

Fatma Babayeva is AzerNews’ staff journalist, follow her on Twitter: @Fatma_Babayeva