Azerbaijan’s Socar is considering second petrochemical facility investment in Aliaga
Socar, the state-owned Azerbaijani oil company that has many strategic investments in Turkey, including Petkim, TANAP and Star Refinery, has launched a new investment strategy totaling $2 billion. “We are building a second Petkim in Aliaga which we aim to complete in 2023,” Socar Turkey CEO, Zaur Gahramanov, said. Responding to questions from daily DUNYA at the Uludag Economy Summit, Gahramanov said that TANAP will be making the first gas transit to Turkey in July. With a $6.3 billion investment, Star Refinery will start production this year. About 50 percent of Petkim’s production is exported but the STAR refinery’s production will be distributed in Turkey, he added.
Gahramanov said that 2017 was a very good year for SOCAR and that Petkim broke records in terms of production, income and profitability. “$33 billion of Turkey’s $47 billion worth of current account deficit comes from the energy sector,” he said. “In such an environment, the STAR Refinery will contribute $1.5 billion annually to help narrow the deficit. The STAR Refinery’s capacity 10 million tonnes of crude oil – will put a major dent in Turkey’s foreign energy reliance helping it reduce imports in products like diesel, jet fuel and LPG. In addition, Petkim will get all its naphtha needs from the STAR Refinery. In this regard, it will decrease costs because there will not be a freight fee for Petkim, which will increase efficiency.”
$19.5 b ll on to be nvested n Turkey
Gahramanov noted that SOCAR has already completed $12.6 billion of its investment plans in Turkey, totaling $19.5 billion. “When our ongoing projects are completed, this figure will reach $16.5 billion,” he said. “The remaining $3 billion will be invested in 2018, 2019 and 2020. We provide financing with our own resources mainly from Azerbaijan. Very soon, SOCAR Turkey will be as big as SOCAR Azerbaijan, a $20-22 billion company.”
Unaffected by exchange rate fluctuations because the company’s income and expenses are in dollars, Gahramanov added that Socar will reach an estimated $12 billion turnover when they start working at full capacity in 2019. “The number of employees in our group is approaching 5,000 and will reach 7,000 after the construction is completed,” he said.
In regards to their approach to Turkey, Gahramanov added: “We operate in 15 countries. Our biggest investment is in Turkey. Others may be exiting Turkey but despite the fact that we have postponed some of our projects in other countries, we remain dedicated to our Turkish investments. We will continue to do so. Turkey is a big market. We believe in this market. We receive great support from our partnerships in Turkey. We always come first when there is an incentive in question. As Turkey’s largest foreign investor, we don’t see ourselves as a ‘foreigner’ here.”