SOCAR prefers foreign borrowing

Oil&Gas Materials 3 May 2013 15:48 (UTC +04:00)

Azerbaijan, Baku, May 3 / Trend A.Akhundov /

In 2013, SOCAR (the State Oil Company of Azerbaijan) attracted borrowings of $1 billion, SOCAR Vice-President for Economic Affairs Suleyman Gasimov told reporters on Friday.

"Recently, we often attract loans from different banks given that the amount of each loan does not exceed $200 million. We plan to attract $1 billion this year of which up to $600 million 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," Gasimov said.

According to him, SOCAR is continuing to work with local banks in the area of fundraising such as the International Bank of Azerbaijan, XalqBank, Kapitalbank.

"Loans, attracted from abroad, are cheaper. The Central Bank's rate is at a level of 4.75 per cent. That is our banks cannot provide us with loans at below five per cent rate while foreign banks provide funds at a rate of 2.3-2.5 per cent plus Libor which is even lower than 0.5 per cent. Therefore, we are not so interested in attracting funds from our banks," Gasimov said.
According to him, a loan from the IBA was brought under the state guarantee, so the rate on it was 3.15 per cent. "At that moment, the rate was acceptable to us," Gasimov said.