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SOCAR consolidates its position to be an international company

30 April 2007 13:33 (UTC +04:00)

SOCAR will establish a direct sales office in London by this yearâ€™s end. Vice-President Elshad Nasirov says the process of tax, administrative and staff issues are under way.
â€œRegistration process doesnâ€™t take long time,â€ he added.
The state-owned company also intends to open an office in Greece. The aim of establishing representative offices abroad is to penetrate the international market. The group has already opened its offices in Georgia and Romania.
Besides, SOCAR purchased Kulevi Terminal on the Black Sea (Georgia) to expand oil shipments. The company president Rovnag Abdullayev says they have received favorable syndicated loans from the international banks for reconstruction works in the terminal.
â€œWe are deeply interested in Georgiaâ€™s market. Kulevi Terminal will open our way to the Black Sea,â€ says Abdullayev.
â€œWe plan to start operations at the terminal in the second quarter.
The annual capacity of 10 million tons in the first phase, and reaching 20 million tons per year later,â€ he underscores.
The company will also build a refinery at Kulevi.
The capacity of the refinery will be 5 million to 10 million tons of oil annually. Some 300 hectares will be allotted to the construction.
Azerbaijan is supplying 75% of Georgiaâ€™s oil imports. New refinery in Georgia will reduce transport expenses and cost price of oil products.
SOCAR also takes great interest in Turkeyâ€™s market.
In early December, 2006 the President of the State Oil Company of Azerbaijan (SOCAR), Rovnag Abdullayev, and the Chairman of the Management Board of Turkeyâ€™s Turcas, Erdal Aksoy, signed an agreement on establishment of SOCAR & Turcas Energy Joint Venture to ensure investment-making in oil processing in Ceyhan Port, gas import and wholesale selling of gas and Turcasâ€™s participation in the exploration activities on the Caspian.
SOCAR & Turcas Energy JV will be engaged in implementation of the project on establishment of an Oil Refinery in the Ceyhan Port at an annual capacity of 10 million to 20 million tons, and marketing of transportation of Shah Deniz gas to Turkey and Europe.
Construction of an oil refinery and necessary infrastructure requires investment of US$5 billion.
â€œAzerbaijan will own 80% of oil production in Azeri-Chirag-Guneshli field in 2009. The throughout capacity of the BTC is 50 million tons, of which 40 million tons will belong to Azerbaijan. So, we plan to build an oil refinery in the Ceyhan, the outfall of the pipeline, to refine Azeri oil there,â€ Rovnag Abdullayev says.
Te prospects of refining Azeri crude in Turkey were discussed and it was concluded that Turkey and the Mediterranean Sea markets are very prospective. Turkish Minister Hilmi Guler hailed influx of Azeri investments to the country.
SOCAR is also interested to take part in privatization of the largest Turkish petrochemical maker PETKIM.
Turkish Energy and Natural Resources Minister Hilmi Guler welcomed the SOCARâ€™s intent to take a controlling stake, adding that after these plans will make Azerbaijan one of the important shareholders in Turkey.
SOCAR also shows keen interest in the market of former soviet region (Commonwealth of Independent States). It has unveiled a plan to export Azeri oil to Belarus, to refine and sell around there.
Ukraine ,too, wants to import Azeri oil via Odessa-Brody pipeline. Azerbaijanâ€™s Energy and Industry Minister Natig Aliyev says Azeri oil can be pumped into the pipeline in the Black Sea for delivery to Ukraine.
As to Azerbaijanâ€™s direct participation in this project, we would like to acquire a stake in one of the refineries in Ukraine. If Azerbaijan owns or takes a stake in any refinery, it is possible to refine and sell Azeri oil by creating chain filling stations there,â€ he insists.
It turns out that Azerbaijan is planning to deliver its oil to the end-users in not too distant future. It is cheaper for Azerbaijan to export crude oil than oil products so it has made its mind to establish refineries near the buyer. In the short run, SOCAR will give up selling crude oil through regular competitions and will win long-term contracts. SOCAR Vice-President Nasirov says Azerbaijan so far signed only one long-term oil export agreement with Thailandâ€™s PTT Public Company Ltd.
As per the one-year agreement for exportation of crude oil of Azerbaijan,
SOCAR will be delivering 1 million barrels of Azeri Light crude oil a month to the Thailandâ€™s companies under FOB or CFR conditions.
Besides, Indian and South Korean companies also show interest in refining Azeri oil in their own refineries. Azerbaijan will also sign an oil offtake contract with Palmali Group of Companies. All the moves imply that SOCAR will be able to consolidate its position overseas. /APA-Economics/