SOCAR to receive int'l loan for Shah-Deniz at efficient rates

Oil&Gas Materials 3 July 2006 16:43 (UTC +04:00)

The interests of credit that the State Oil Company of Azerbaijan will obtain to cover its share in Shah-Deniz project will take to finance its stake in Shah-Deniz, will be less than 1%, the SOCAR that owns a 1%-stake in the project told Trend.

Based on the model of issue of the first credit by a group of European banks for repayment of financing of SOCARs stake in the Azeri-Chirag-Gunashli project the bank understood the efficiency of such investing and proposed low interests in the loan, the SOCAR noted.

This is an evidence of international financial institutions trust in SOCAR.

At present the SOCAR continues talks with some banks to receive credit, which will be directed to repayment of funds Total and EBRD issued to Azerbaijan to cover SOCARs stake in this project. Three out of nine European banks have been selected to date and are currently being talked to. В"The credit is suggested to be syndicated. It will enable the SOCAR to receive a balance in black with respect to repayment of interests to the French company Total and the EBRD.

Earlier, Azerbaijan (ACG) Limited (AzACG) obtained a syndicated credit in amount of $750mln. This credit was issued without a governmental security. Upon receiving this credit, SOCAR redeemed its entitlement to invest in ACG project. Before, Exxon Azerbaijan Limited and Turkiye Petrolleri A.O. shared 10% entitlement for investment in ACG

. The companies invested in total $1.15bn. Having obtained the $750mln credit, AzACG redeemed this entitlement from Exxon Azerbaijan Limited and Turkiye Petrolleri A.O. ЧасС'СЊ средсС'РІ уже направР"ена РЅР° выкуп права, другая - Р±СѓРґРµС' РёСЃРїРѕР"ьзована РЅР° непосредсС'венное инвесС'ирование РІ проекС'Рµ В"РђР§Р"В". In accordance with the credit agreement, oil earlier exported by Exxon Azerbaijan Limited and Turkiye Petrolleri A.O., will be sold by AzACG to two companies Glencore and Select Energy Trading (SET). Revenues from cost oil will be placed at special accounts at BNP Paribas, which acted as organizer and warranty of a loan for AzACG, that will be further iinvested in the ACG project on base of cash call.

The credit is issued on terms Libor +1.7%. It shall be repaid in 3 to 5 years depending on global oil price.

In compliance with the terms set by Exxon Azerbaijan Limited and Turkiye Petrolleri A.O., the funds invested were repaid at interest rates of 4%. Thus, the loan enabled the SOCAR to get a balance in black in the amount of 2.3%.