September 14, 2015 / 11:47 AM / 4 years ago

UPDATE 1-Azeri SOCAR says oil price fall halves revenue

* SOCAR to ask cenbank for $1.7 bln for petrochemical plant

* Suggests $50-$55 oil price for 2016 state budget (Adds details, background)

BAKU, Sept 14 (Reuters) - Azeri state energy company SOCAR said on Monday it would transfer less money to the state next year as its revenues had halved due lower oil price.

The former Soviet republic has had to devalue its currency following a sharp decline in the Russian rouble.

“The decline in the oil price has affected our financial condition. Our revenues fell two times,” Rovnag Abdullayev, the company’s president, said.

Abdullayev did not say to what level the company’s revenue fell. Oil and gas account for 95 percent of Azeri exports and 75 percent of government revenues.

The SOCAR president also suggested that next year’s state budget should be calculated based on an estimated oil price of $50-$55 per barrel, down from $90 this year.

The 2015 budget anticipates revenues of 19.4 billion manats ($18.5 billion) based on an estimated oil price of $90 per barrel, down from $100 last year. Brent crude is now trading around $50.

SOCAR’s Vice-President Suleiman Gasymov told Reuters in February that an average oil price of $60 per barrel would reduce the company’s revenues by $510 million this year. In March, SOCAR placed $750 million worth of Eurobonds.

According to SOCAR officials and independent analysts, the production cost of oil for SOCAR is estimated at $15 per barrel, while the oil production cost for BP, which operates some big energy projects in Azerbaijan, is $12 per barrel.

SOCAR will also ask the central bank for a 1.8 billion manats ($1.7 billion) loan, mainly for building its $16.5 billion oil, gas and petrochemicals processing plant, Abdullayev said.

Last year, it had delayed the completion of the complex, outside the capital Baku, by four years until 2030 due to a lack of funds.

“We intend to get 1.8 billion manat worth of credit in the central bank,” Abdullayev told reporters.

He said 1.2 billion manats would be used for modernisation of the oil, gas and petrochemical plant, while the rest was expected to be used for current drilling projects.

The first stage of the project, intended to replace SOCAR’s ageing oil refinery as well as the Garadagh gas processing plant and facilities of chemicals firm Azerikimya, is estimated to be worth $2.1 billion.

$1=1.05 manats Reporting by Nailia Bagirova; Writing by Margarita Antidze; Editing by William Hardy

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below