SOCAR receives first tranche of over $1.7 billion IBA loan

By: Gulgiz Dadashova

Azerbaijan’s energy giant SOCAR has received the first tranche [189 million manats] of the major loan from the International Bank of Azerbaijan.

SOCAR Vice President Suleyman Gasimov told Trend on October 27 that under the first installment of the IBA loan some 69 million manats will be directed to reconstruct the oil refinery, and about 120 million manats to conduct drilling.

The total amount of the loan will be 1.86 billion manats ($1.78 billion). The funds will be spent on the development of the processing industry and drilling new wells in the Caspian Sea. The Finance Ministry will act as the guarantor.

“Both are long-term loans. The loan for oil refinery modernization is intended for about 13 years, the first three years covering a grace period. It will be repaid over 10 years in equal installments with the help of funds from the state budget and SOCAR’s authorized capital,” Gasimov said earlier.

The loan for conducting drillings is meant for five to six years, and the proceeds from the sale of extracted hydrocarbons will be a source for this loan’s repayment.

Earlier, SOCAR’s Head Rovnag Abdullayev said that the process of modernization of the Baku oil refinery named after Heydar Aliyev will be completed by late 2018.

After the completion of the reconstruction, the processing capacity of the refinery will increase from six million to 7.5 million tons of oil per year.

SOCAR announced about liquidation of Azneftyag oil refinery on Jan. 1, 2015 and its merger with Baku oil refinery named after Heydar Aliyev.