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In quarter 2, 2014 construction of drilling rig was not funded from Oil Fund

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In quarter 2, 2014 the State Oil Fund of Azerbaijan (SOFAZ) did not allocate funds to fund construction of floating drilling rig of sixth generation of State Oil Company of Azerbaijan (SOCAR), according to the semi-annual report of SOFAZ.

            According to the report, the item of expenses does not have the column “construction of floating drilling rig of SOCAR.”

            SOFAZ started funding of the project last year. During 2013 169.14 million AZN has been allocated. This year it is forecasted to spend 285.2 million AZN for this project. However, during quarter 1, 2014 only 67.3 million AZN has been allocated from SOFAZ.

            Singaporean Keppel FELS Limited company has been building the new generation drilling rig. It has committed itself to complete construction by the end of 2016. After that the drilling rig will be handed over to Caspian Drilling Company (92.44% is owned by SOCAR). Using this drilling rig SOCAR plans to start exploration works on Umid (deep-water section) and Babek fields and then the drilling rig will be used to drill the second exploration well on the Absheron field.

The contract for construction was concluded between CDC and Keppel FELS in June 2013. Total cost of the drilling rig will be over 800 million AZN (about $1.1 billion).

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