Latest news with #SOCAR
Business Recorder
13-06-2025
- Business
- Business Recorder
ECC rejects MTT-WOP over flawed financial assumptions
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has refused to approve Machike-Thallian-Tarrujabba White Oil Pipeline (MTT-WOP) in its present form, expressing concern over the fact that any tariff based on debatable financial assumptions could ultimately impact the consumers adversely in the form of higher tariffs, sources close to Petroleum Minister told Business Recorder. Recently, the Petroleum Division briefed the ECC that during the visit of Ilham Aliyev, the President of Azerbaijan to Pakistan on 11-13th July, 2024, Pakistan side presented several projects to Azerbaijan for investment including establishment of Joint Trading Company, investment in Petrochemical Refinery, upgradation of PRL, underground gas storage, Machike-Thallian-Tarru-jabba White Oil Pipeline (MTT- WOP) etc. The Azerbaijan side showed interest in these projects. Much progress has been made since then. On December 9, 2024, SAPM on Foreign Affairs stressed upon the need to address all outstanding issues with Azerbaijan and underscored that preparations be made for the visit of the Prime Minister of Pakistan to Azerbaijan which was scheduled in February 2025, with one of the project listed in the said letter was the MTT- WOP. MoU signed on consortium formation for White Oil Pipeline project In line with the urgency of the subject matter, technical team from Frontiers Works Organization (FWO) visited Baku from 23rd to 27th December, 2024 and carried out in-person meetings with their SOCAR counterparts to progress on the White Oil Pipeline Project. As the follow up, the Prime Minister deputed a high level delegation under the leadership of Minister for Communication/ Privatization who visited Baku on January 31, 2025. During a meeting of the Minister with the President of SOCAR, SOCAR put across the condition of 'Ship or Pay' for investment in the project. Subsequently, the project was also discussed during the visit of the Prime Minister to Azerbaijan on 23rd to 24th February 2025. In light of interactions and consultations, FWO and PSO (joint consortium partners) through their project company Frontier Oil Company-I (FOC-I) and in consultation with all stakeholders have developed an alternate option of 'Ship or Pay' to address the concerns of SOCAR. According to the agreed mechanism, OGRA will design a regulatory framework to ensure optimal utilization of pipeline by declaring it a default mode of transportation. Accordingly, FOC-1 submitted a revised tariff petition to OGRA for Machike to Thallian section of White Oil Pipeline which has been acceded to by OGRA whereas work on tariff petition for Thallian to Tarrujabba section was in progress. The Petroleum Division further briefed the forum that OGRA had requested Petroleum Division to obtain necessary approval from ECC on the following key terms and conditions, which were submitted by FWO and have been agreed between stakeholders for the said project and provisional tariff has been approved based on the said terms. The ECC being the competent authority was requested to approve the following regulatory framework/ policy guidelines proposed by OGRA for Machike- Thallian section, which would also be applicable for Thallian to Tarrujabba Section: (i) tariff shall be US dollar based instead of Rupee based. OGRA has already determined the provisional tariff in US dollar;(ii) a regulatory framework shall be developed by OGRA to ensure optimal utilization of pipeline by declaring it a default mode of transportation;(iii) OGRA may be authorized to develop a commercial framework which will require OMCs to commit minimum annual pipeline volumes ;(iv) if committed volumes thresholds will not be met, the shortfall will be covered/ adjusted by OGRA through existing IFEM of each OMC ; and (v) if the committed volumes for the year are below the minimum volumes required, the shortfall will be met through IFEM mechanism of the country. OGRA may be authorized to develop mechanism for enabling above provision. During the ensuing discussion the ECC deliberated upon the issue in detail and noted that though the project is of vital importance in the overall context of the economy and needs to be initiated at the earliest, however, the dollarized tariff that is being sought for the project is a significant area of concern given the fact that Government is trying to discourage payment of tariff in foreign exchange with fiscal constraints being faced. The ECC also noted that instead of calculating the Internal Rate of Return for the project on the basis of existing relevant regulations of OGRA, the same has been calculated on assumptions that require further clarity. It was also observed that though foreign investment was welcome, which is only 25% of the total cost and rest was the local component but dollarized tariff was recommended for local partners as well, which was not tenable. The ECC also took into consideration the observations raised by the Finance Division and Planning, Development and Special Initiatives Division and found that the proposal needs to be resubmitted after due deliberations and calculations in the presence of Ministers of Petroleum and PD&SI. The ECC expressed concern over the fact that any tariff based on debatable financial assumptions could ultimately impact the consumers adversely in the form of higher tariffs. After detailed discussion, the ECC did not approve the proposal with the directions that a committee Co-Chaired by the Secretary Finance and Secretary Petroleum and including representatives from OGRA and Ministry of Planning, Development and Special Initiatives review and finalize the financial modalities of the project and ensure that the proposed tariff has been calculated correctly on the basis of realistic financial assumptions. Copyright Business Recorder, 2025
Reuters
12-06-2025
- Business
- Reuters
Decision on oil refiner Italiana Petroli's sale expected around end-June, sources say
MILAN, June 12 (Reuters) - Italiana Petroli, which is currently in talks with three suitors interested in buying the oil refiner, is expected to take a decision on the potential 3 billion euro ($3.5 billion) deal around the end of this month, two sources with knowledge of the matter said on Thursday. Global commodity trader Gunvor, State Oil Company of Azerbaijan (SOCAR) and Abu Dhabi-based Bin Butti Group have all presented binding offers to buy the 100% of the privately-held group, sources previously said. One of the two sources told Reuters that other industrial groups from the Middle East have reached out to the Italian company to signal their interest in case ongoing negotiations fall through and the seller decides to re-open the process. One of the sticking points in current talks is the valuation, the sources said, adding the seller - the Brachetti Peretti family - is seeking around 3 billion euros. Italiana Petroli and Gunvor declined to comment. SOCAR and Bin Butti Group were not immediately available to comment on negotiations. The refiner last year posted an adjusted core profit of nearly 500 million euros and had net cash of 408 million euros at end-December. The group, which is being advised by UniCredit, has a total refining capacity of around 200,000 barrels per day. It also has a network of 4,600 fuel stations. It increased its refining and fuel storage capacity in late 2023 when it finalised the acquisition of Exxon Mobil's (XOM.N), opens new tab Italian assets. It currently owns a refinery in Ancona, eastern Italy; the SARPOM refinery in Trecate in the north; and has a tolling contract for the Alma refinery in Ravenna, towards the north east. Trecate deals with the production of different kinds of fuel, including aviation propellant, while the other two plants produce bitumen. SOCAR is being advised by Italy's Intesa Sanpaolo IMI CIB. Rothschild is working with Gunvor. ($1 = 0.8633 euros)
Yahoo
06-06-2025
- Business
- Yahoo
BP expands oil and gas interests in Azerbaijan with new deals
BP and its partners have sanctioned a new phase of development for the Shah Deniz gas field and gained access to two new exploration blocks in Azerbaijan. The agreements, which also include terminal electrification and solar power projects, signal bp's commitment to growth and emissions reduction in the region. During Baku Energy Week, bp, in collaboration with its partners, finalised investment decisions for the Shah Deniz Compression project, which is set to enhance the production capabilities of the giant Shah Deniz gas field. BP EVP for production & operations Gordon Birrell said: 'We are deeply proud of the long and successful partnership that bp has built with Azerbaijan over more than 30 years. As can be seen by the agreements we signed this week, we continue to see many opportunities for further development and growth. As we deliver our strategy of growing our upstream, we will build on our strong positions in regions like Azerbaijan, and on the deep relationships we have with the government and our partners.' Additionally, bp has committed to two sustainability-focused projects aimed at reducing operational emissions through terminal electrification and solar power initiatives. The agreements also allow bp to explore and potentially develop two new licences in the Caspian Sea, further cementing its presence in Azerbaijan. BP has also introduced a new partner to expedite exploration activities on a third licence. For more than three decades, the energy giant has played a pivotal role in Azerbaijan's oil and gas sector. The company led the development and operation of key projects including the Azeri-Chirag-Deepwater Gunashli oilfield, the Shah Deniz gas field and the Sangachal terminal. BP's involvement extends to the Baku-Tblisi-Ceyhan oil pipeline and the Southern Gas Corridor gas pipeline network. The Shah Deniz Compression project is one of eight to ten major projects bp expects to begin between 2028 and 2030. The project is set to contribute to an increase in bp's global upstream production to 2.3–2.5 million barrels of oil equivalent per day (mboe/d) by 2030, with potential for further growth until 2035, all within bp's financial framework. In addition to project approvals, the company has finalised an agreement with SOCAR, acquiring a 35% working interest and operatorship in two blocks in the Caspian Sea, the Karabagh oilfield and the Ashrafi-Dan Ulduzu-Aypara area, with SOCAR holding the remaining 65%. The partnership has also greenlighted the Shafag solar and Sangachal terminal electrification projects, linking sustainable energy development with operational advancements. SOCAR has also inked fresh deals with ExxonMobil and bp for hydrocarbon exploration in Azerbaijan, aiming to maintain the nation's oil production at around 582,000 barrels per day for the next five years. "BP expands oil and gas interests in Azerbaijan with new deals" was originally created and published by Offshore Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Trade Arabia
05-06-2025
- Business
- Trade Arabia
MOL Group, Socar agreed on terms for Azerbaijan onshore exploration
MOL Group and Socar have signed key terms for an exploration, development, and production sharing agreement for a new onshore area covering the Shamakhi-Gobustan regions of Azerbaijan. Following the signing of a memorandum of understanding (MoU) with the State Oil Company of the Republic of Azerbaijan (SOCAR) last September to evaluate further potential cooperation opportunities in the area of hydrocarbon exploration in the Shamakhi-Gobustan region in Azerbaijan, the new agreement marks further progress in MOL's strategic partnership with Socar. The agreement was signed by MOL Group Chairman and CEO Zsolt Hernádi and Socar President Rovshan Najaf during the Baku Energy Forum. 'I'm proud to sign this new agreement with Socar, reinforcing our commitment to deeper cooperation and future exploration in Azerbaijan. As MOL Group celebrates its 5th anniversary in Azerbaijan this year, stepping up with our strategic partnership is an evidence of great cooperation and shared visions," said Hernádi. "This agreement reflects the growing economic ties between Azerbaijan and Hungary too, supported by excellent governmental relations. MOL's other project, the offshore ACG is a cornerstone of our international operations, already contributing to Central Europe's energy security and our regional refining flexibility. "I'm positive that the Shamakhi-Gobustan joint exploration project will not just be a great addition to our international production portfolio but it will be an important puzzle to securing Central-Europe's energy supply. We will have the flexibility to decide to sell or to ship the oil produced to MOL Group's core region to contribute to the security of energy supply,' said Hernádi. This new agreement builds on the momentum of the earlier cooperation and reflects the parties' shared commitment to expand their collaboration in Azerbaijan's upstream sector. The discussions in relation to this exploration opportunity have progressed constructively, reaffirming MOL Group's long-term strategic presence in the Caspian region and Socar's role as a reliable partner in the development of Azerbaijan's hydrocarbon resources. According to the companies' intention, MOL would be the operator and 65% shareholder in the project and Socar would hold 35%. The finalisation of a fully termed exploration, development, and production sharing agreement will be subject to further negotiations and regulatory approvals. MOL Group entered Azerbaijan in 2020 by acquiring a 9.57% stake in the Azeri-Chirag-Gunashli (ACG), one of the world's largest oil fields, and an effective 8.9% stake in the Baku-Tbilisi-Ceyhan (BTC) pipeline that transports the crude to the Mediterranean port of Ceyhan. This represents 14% of MOL's total production and 25% of total reserves as of 2024. Despite being a minority shareholder, MOL actively contributes to the development of ACG with its 8 decades-long reservoir management and production optimization knowledge. The BTC pipeline plays an important role in MOL's supply of oil to MOL Group's refineries in Central and Eastern Europe. So far, 15 million barrels of MOL's crude oil have been transported from the ACG field through the BTC pipeline and cargo ships to MOL Group's refineries, including Slovnaft's Bratislava and INA's Rijeka Refinery. - TradeArabia News Service
Express Tribune
04-06-2025
- Business
- Express Tribune
Govt reaffirms energy reform commitment
Listen to article Federal Minister for Petroleum Ali Pervaiz Malik reaffirmed Pakistan's commitment to a resilient and sustainable energy future during his keynote address at the Ministerial Plenary session titled 'Global Cooperation for a Resilient and Sustainable Energy Future' at the 30th Baku Energy Forum. According to a statement released on Tuesday, in his speech, Malik congratulated Azerbaijan's Energy Minister Parviz Shahbazov and pledged Pakistan's full cooperation with the forum's transition agenda, which aims to shift from a fossil fuel-driven framework to a balanced energy mix. He emphasised Pakistan's strategic realignment under Prime Minister Shehbaz Sharif's leadership towards a more sustainable, inclusive, and coherent energy paradigm. Highlighting Pakistan's ongoing industrialisation, Malik noted that the country's rising energy demand must be met by integrating renewable energy sources and technology. To support this, he announced the revival of the Cabinet Committee on Energy, chaired by the prime minister, to enhance coordination between the Petroleum and Power Divisions and ensure cohesive policy evolution. The minister also detailed Pakistan's efforts to expand its gas infrastructure by encouraging local exploration, acknowledging the assistance of Azerbaijan and other partner countries in developing indigenous gas resources. He said conservation measures and reform initiatives are underway to dismantle inefficiencies and ensure long-term sustainability of the gas sector. "Despite economic challenges, Pakistan is committed to making the gas sector sustainable by dismantling inefficiencies and implementing reforms," Malik stated. "Reform is the cornerstone of the prime minister's vision for a resilient energy future." Attendees at the plenary included Azerbaijan's Energy Minister Parviz Shahbazov, the Turkish Deputy Minister of Energy, and Director of Energy at the European Commission Cristina Lobillo. Separately in Islamabad, Malik held a bilateral meeting with Rovshan Najaf, President of the State Oil Company of Azerbaijan Republic (SOCAR), to enhance energy cooperation between the two countries. The discussion focused on deepening bilateral ties, potential joint ventures, and attracting investment in Pakistan's oil and gas sector. Malik reiterated Pakistan's intent to strengthen partnerships with leading global energy firms and stressed the government's commitment to creating an investor-friendly climate. Najaf praised Pakistan's progress in the energy sector and reaffirmed SOCAR's interest in expanding cooperation with Pakistani stakeholders.
