SOCAR to pay off foreign debts from 2010

Oil&Gas Materials 4 June 2009 15:18 (UTC +04:00)

Azerbaijan, Baku, June 4 / Trend I. Khalilova /

SOCAR (the State Oil Company of Azerbaijan) does not consider reasonable to draw foreign borrowings in terms of world crisis, SOCAR vice-president on economic affairs Suleyman Gasimov said. 

"Drawing of foreign loans was difficult because of expensive terms on the world financial markets," Gasimov said.

SOCAR plans to complete loan deal by getting $100 million within designing of gas condensate field Shakh Deniz by late June, he said. The first trench in the amount of $100 million was received in December. Cost of the second stage realization on different estimation hits $16-20 billion.

The contract on development of offshore field Shakh Deniz was signed on June 4, 1996. Participants of the agreement are BP (technical operator) - 25.5 percent, Statoil Hydro (commercial operator) - 25.5 percent, NICO - 10 percent, Total - 10 percent, LukAgip - 10 percent, TPAO - 9 percent, the state oil company of Azerbaijan - 10 percent. 

"We plan to negotiate on Azeri-Chirag-Guneshli project with foreign banks - BNP Paribas S.A, JP Morgan, City Bank, etc. with whom we cooperate for a long time and establish relations on long-term basis," vice-president said.

SOCAR will also pay off foreign lends from 2010. Roughly $420 million will be returned.

"SOCAR has no problems with paying off loan resources. We intend to return loans without be behind schedule," Gasimov said.

The agreement on giving syndicated loan was signed between Azerbaijan ACG Ltd and French bank BNP Paribas S.A was signed on March 24, 2006. The agreement concerned 100 percent of SOCAR and its share (10 percent) in PSA contract on bloc of offshore fields Azeri-Chirag-Guneshli.

Sum of loan hit $750 million. Role of BNP Paribas was to grant loan and distribute it between participants of syndication consisting of 15 leading world and European banks.  

SOCAR (AzACG Ltd) succeeded in returning cost-is-no-object oil that it can sell independently due to syndicated loan. Earlier ExxonMobil and TPAO were drawn to finance obligations of SOCAR on PSA in 1994. They financed share of the state oil company.

The agreement with BNP Paribas S.A. concluded without state guarantees or nay other pawn allowed SOCAR to draw funds from the world markets of capital on acceptable rates in future. 

SOCAR plans to pay off loans to Azerbaijani banks - Xalq Bank and the International Bank. Lends were drawn from these banks for a year, vice-president said. Roughly $80 million was drawn from the International Bank of Azerbaijan but $40-50 million from Xalq Bank. Loans were drawn from local banks for construction of underwater gas pipeline. 

Do you have any feedback? Contact our journalist at [email protected]