Turkish media reported that Turcas Petrol company, one of the shareholders of Star oil refinery which will be built in the Izmir province of Aliaga, could leave the project.
The same source said that at present the Turkish company has been negotiating sale of its entire share in the project. Turcas Petrol earlier planned to sell only 13.5% of its share and leave 5% share to itself.
SOCAR Turkey Enerji A.S., daughter company of State Oil Company of Azerbaijan (SOCAR), is the main contender for Turcas Petrol’s share in the project.
Turcas Grupu earlier announced its intention to sell 13.5% of its share in Star to Azerbaijan. SOCAR Turkey has expressed interest in purchasing all shares of the company.
Rafinery Holding A.S. owns 41.5% shares of the oil refinery, 18.5% shares are owned by Turcas Grup and 40% shares by the State Oil Fund of Azerbaijan (SOFAZ).
Why did Turcas Petrol decide to leave STAR project? The experts believe that during the past year the margin in the oil refinery has gone down significantly. Therefore, small and medium companies leave this area. At the same time some other risks, such as marketing ones caused by unstable prices, ecological and insurance risks, have increased and the banks have toughened the conditions of funding.
* Star oil refinery construction started in 2013. According to SOFAZ, during 2013 372.6 million AZN (about $476 million at the average annual rate) has been spent to fund STAR oil refinery construction. The international financial institutions, such as European Bank for Reconstruction and Development (EBRD), have postponed funding of the project, as cost of the works went up from $5.1 to 5.3 billion. Turkish banks, however, are not in a hurry to fund the project as well. SOCAR has extended the term of acceptance of the tender proposals for funding till March 31, 2014. SOCAR’s representatives have recently said that private Turkish Denizbank has expressed its intention to fund the oil refinery construction and other SOCAR’s projects in Turkey. 99.85% shares of Denizbank are owned by the state-run Saving Bank.
