MAY 17 2013 (The Conway Bulletin) — SOCAR, Azerbaijan’s state-owned energy company, said it would borrow $4b to part-finance an ambitious new oil refinery in Turkey, only 10 days after figures showed slowing output at its most important oil field.

The refinery, to be built in western Turkey, will be operational by 2016 and produce 10m tonnes of oil a year. The $4b loan will cover around two-thirds of the construction costs.

SOCAR will fund the rest of the project itself.

Azerbaijan’s wealth is anchored to its energy industry and the refinery plan projects both a confidence about the future and an understanding of its most important market — Europe.

The importance of Europe as Azerbaijan’s main market was underlined when the European Commission approved plans to build a pipeline to pump gas from Azerbaijan across the Adriatic to Italy, on May 17.

A few days earlier, though, on May 7, BP announced that production at the main oil field in the Azeri sector of the Caspian Sea, Azeri-Chirag-Guneshli (ACG), was still falling. Bloomberg reported that production at ACG, which produces three-quarters of the country’s oil, had dropped to 662,000 barrels per day in Q1, a fall of 8.4% from a year earlier.

ENDS
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(News report from Issue No. 135, published on May 20 2013)