Moscow Expands Azeri Projects

Russian and Azeri companies signed three oil and gas agreements in the Black Sea resort of Sochi during a visit by the president of Azerbaijan Ilham Aliev to his counterpart Vladimir Putin September 1.

State-run companies Rosneft and Socar signed an agreement to establish a joint venture to explore the Goshadash block in the northern part of the shallow water of the Absheron Peninsula. Azerbaijan has already tried but failed to drill the block successfully owing to its geological complexity.

Rosneft and Socar had signed a memorandum of understanding (MoU) in 2014 to establish joint ventures to develop projects from the Caspian Sea to Siberia.

Socar also agreed to buy 1mn metric tons/yr of oil from Russia for its 10mn mt/yr Turkey Star refinery, expected to become operational in the coming weeks.

Socar, Gazprombank and state Vnesheconombank subsidiary Russian Export Center also agreed to finance Russian-made equipment for gas processing and petrochemical plants in Azerbaijan. Gazprombank could lend up to about $700mn.

Gazprombank has already provided the whole $750mn needed for the Socar Polymer project, whose first phase entered operations in July and the second phase will complete in October. A part of its purchased equipment was Russian-made.

Azerbaijan has also planned to modernize Karabagh gas processing unit and Azerikimya’s petrochemical plants.