SOCAR asks for strategic investment zone status for petrochemi­cal plant

Dünya Executive - - BUSINESS - HAKAN GULDAG

Vagif Aliyev, Chairman of the Board of Directors of SOCAR, the state-owned oil company in Azerbaijan, announced in a meeting at its headquarte­rs in Baku that the company is seeking the ‘strategic investment zone’ status for Aliaga Petkim Peninsula. The status, Aliyev said, would accelerate investment, which has already topped $12 billion in Turkey and will reach nearly $20 billion as soon as current projects are completed.

SOCAR is one of the most important oil and natural gas producers not only in the region but globally. The company started its activities in Turkey with the acquisitio­n of Petkim from the Privatizat­ion Administra­tion for more than $2 billion in 2008 and has become the largest foreign direct investor in Turkey since.

“Our next investment will be a new petrochemi­cal plant investment that is very much needed for Turkey,” Aliyev said. «Licensing agreements with companies such as BP and Axens have been made. The final investment decision will be made in 2019. The size of the investment will become clear with the final decision but it will be between $2 billion and $3 billion.”

Aliyev noted that Azerbaijan sees itself as a strategic investor in Turkey and believes the Turkish government has the same perspectiv­e. “Wheels need be oiled for such strategic investment­s,” he said. “The strategic investment zone status given to Aliaga Petkim Peninsula will make our investment­s very easy.”

‘The status has advantages’

According to Aliyev, the status will enable the following advantages in practice: “It will speed up investment­s. Bureaucrac­y will decrease and we will not have to apply from ministry to ministry. The paper work can be processed through one channel. We will save our energy to focus more on the investment, and the delivery time will shorten. We have talked with the Turkish government. Things are being prepared on both sides.”

Aliyev also gave informatio­n about the latest stage of the Star Refinery, one of the largest investment­s in Turkey in recent years. “We are counting days,” he said. “99 percent of the constructi­on is completed. Initial production will start at the end of August or the beginning of September at the latest. The official opening will be at the beginning of October.”

In terms of financing, Aliyev said $3.2 billion came from the company’s core resources. “Eximbanks of several countries and a Turkish bank joined us. The total investment was $6.3 billion.”

Vy ng for top ndustry status

About 80 percent of SOCAR’s overseas investment­s are in Turkey. Following the acquisitio­n of Turkey’s first and only integrated petrochemi­cals producer, Petkim, SOCAR has invested $12.6 billion so far for projects like the Star Refinery, Petlim, Petkim Wind Power Plant Petkim and TANAP. When all its projects are completed, the total value of SOCAR’s investment­s in Turkey will reach $19.5 billion. “Investment­s will continue. We have invested an average of $100 million every year since we bought Petkim,” Aliyev said. “For 10 years we did not take one penny out of Turkey. Every penny earned is invested back in Turkey.”

SOCAR Turkey will be one of the top three holdings when the first phase of the investment is completed. Its target is to be Turkey’s “largest industrial company.”

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