SOCAR has completed talks with the banks on funding of construction of the Star oil refinery in Turkey, SOCAR President Rovnag Abdullayev told journalists on Saturday.
“The construction works go on, in particular all ground works have been completed,” Abdullayev added.
Total cost of construction of SOCAR’s oil refinery in Turkey is estimated at $5.3 bilion, of which about $2 billion SOCAR is going to borrow as a credit.
At the end of last year the European Bank for Reconstruction and Development (EBRD) and the International Financial Corporation (IFC) refused to fund the project. Early this year SOCAR invited a tender to fund Star oil refinery. Till March 23, 2014 all banks and interested people should have submitted their final proposals on involvement in funding of the project.
According to Turkish media, Turkish Deniz Bank, 99% shares of which were bought by the Russia state-run Saving Bank last year, expressed ready to allot $500 million for construction of SOCAR’s oil refinery.
According to Azerbaijan President Ilham Aliyev’s decree on the measures to support Azerbaijan’s share in construction of Star oil refinery in Turkey, SOCAR Turkey Yatirim joint stock company was established with 40% share of the state and authorized capital of $1.9 billion. On the basis of the decree, the state’s share (40% worth $760 million) in the joint stock company will be funded by the State Oil Fund of Azerbaijan (SOFAZ).
$475 million has been already allocated from the SOFAZ to fund the project.
* In May 2013 SOCAR signed Engineering, Procurement and Construction (EPC) contract with the consortium of companies to build Star oil refinery. The tender for construction of Star was won by the alliance of Tecnicas Reunidas SA, Saipem SpA, GS Engineering & Construction Corp and Itochu companies.
The oil refinery will refine Azeri Light, Kerkuk and Urals types of oil. The oil refinery with the capacity of 10 million tons is planned to be put into operation in 2017.
