SOCAR asks for strategic investment zone status for petrochemical plant
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.”