SOCAR may acquire AzMeCo until late 2016

By Azernews

By Nigar Abbasova

Azerbaijan methanol plant belonging to AzMeCo Company may be transferred to the ownership of the state-owned energy company (SOCAR) till late 2016.

SOCAR’s vice-president for economic issues Suleyman Gasimov said that the court is expected to make a decision, enabling to transfer the plant to the disposal of Agrarcredit non-banking credit organization. He mentioned that the sale of the facility will be implemented at auction.

Assets of the plant have already been evaluated, but the precise cost has not yet been disclosed.

The need to transfer AzMeCo to the balance of SOCAR was triggered by the debts of the enterprise to the International Bank of Azerbaijan.

The government, by this means, plans to cover the debt of 344 million manats ($209.8 million), which Azerenergy (the national energy operator) owes to SOCAR.

 The debt of Azerenergy to SOCAR stood at 416 million manats ($253.8 million) as of January 2015, the state, however, covered it by means of subsidies.

Azerenergy’s new debt of 314 million manats ($209.8 million) emerged during 2015. Moreover, some 30 million manats ($18.3 million) were added to the debt during the first quarter of 2016.

Gasimov said that the transfer of AzMeCo will improve the efficiency of SOCAR. The plant, which is considered to be one of the largest investments made in the non-oil sector of Azerbaijan will also operate on SOCAR’s gas.

The enterprise, with the capacity of 720,000 tons, produced methanol for the first time in Azerbaijan using natural gas as a raw material.

Gasimov also said that SOCAR attracted 100 million manats ($61.01 million) from the International Bank of Azerbaijan to provide gas supplies across the country, mentioning that it was earlier planned to attract some 198 million manats ($120 million) in this regard.  

“We have already attracted 100 million manats. The issue on the attraction of the remaining sum still remains open and mainly depends on the capacity of banks operating in the country,” he said, mentioning that the sum may be attracted in 2017. 

The loans are expected to be directed to modernization of the oil refinery named after Heydar Aliyev, drilling operations at the 'Bulla Deniz' field and at the shallow part of the Gunashli field.

SOCAR conducts credit transactions with leading banks of the world, which is considered to be the evidence of confidence of international financial institutions in the company.

Gasimov earlier said that SOCAR does not tend to borrowing and tries to borrow the loan from domestic sources.

SOCAR is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, as well as oil and chemical products in domestic and international markets, and supplying natural gas to the industry and the public in Azerbaijan.