SOFAZ reveals volume of investments in construction of new floating drilling rig

Baku, Azerbaijan, July 21

By Maksim Tsurkov – Trend:

Azerbaijan’s State Oil Fund (SOFAZ) has allocated $770.1 million for the project for construction of a latest generation floating drilling rig in the country since the start of the construction work, SOFAZ told Trend July 21.

SOFAZ said that $74 million was allocated for this project in H1 2016.

The project’s cost is around $1.117 billion.

Earlier, SOCAR President Rovnag Abdullayev said that SOCAR managed to save around $60 million in the process of construction of a new latest generation large floating drilling rig.

SOFAZ is the owner of 90 percent of shares in Azerbaijan Rigs LLC that was created for constructing a new platform. This is while 10 percent of shares in Azerbaijan Rigs LLC is owned by SOCAR.

The first latest generation drilling rig is being constructed for SOCAR’s needs.

Caspian Drilling Company (CDC), where SOCAR owns 92.44 percent of shares, will be the operator of the rig. Singaporean Keppel FELS Limited, with which the CDC signed an agreement in June 2015 for carrying out construction work, has been selected the contractor of the rig’s construction.

The rig’s construction will be fully completed by March 2017. The new rig is meant to drill wells with a depth of up to 8,000 meters at a sea depth of 1,000 meters.

The drilling rig can be rented to the French company Total for drilling work at Azerbaijan's Absheron gas and condensate field, or to BP for using it in the third stage of development of the Shah Deniz field. The decision will be made before the completion of the rig’s construction.

The assets of SOFAZ have increased by 4.6 percent as of July 1, 2016 and stood at $35.1 billion, as compared to $33.57 billion as of early 2016.

SOFAZ was established in 1999 with assets of $271 million. Based on SOFAZ's regulations, its funds may be used for construction and reconstruction of strategically important infrastructure facilities, as well as solving important national problems.

The main goals of the State Oil Fund are accumulation of resources and placement of the Fund’s assets abroad in order to minimize the negative effect on the economy, prevention of "Dutch disease" to some extent, promotion of resource accumulation for future generations, and supporting current social and economic processes in Azerbaijan.

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Follow the author on Twitter: @MaksimTsurkov

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