Kenan Yavuz: Foreign investment will turn SOCAR into a global company

Istanbul. 13 May. REPORT.AZ/ Report News Agency presents an interview with CEO of SOCAR Turkey, Kenan Yavuz:

- In one of your previous interviews you said that, SOCAR Turkey will become the second largest company in Turkey. How do you assess the current position of SOCAR Turkey in the market, and when this goal will be achieved?

- Following the acquisition in 2008 Petkim SOCAR became one of the ten industrial companies in Turkey. We plan to complete the construction by the Star refinery project and TANAP in 2018 to become the second largest industrial company in the country.

- How is the works in regard with the construction of Star oil refinery, and what is its future role in the economic development of Turkey?

- The project should be seen not only in terms of the economic benefits of Turkey, but through the prism of the economy of Azerbaijan. As you know, Azerbaijan is a country-exporter of natural gas and oil, but considering the current situation in the world, we can see that the rich hydrocarbon resources of the country reaches a high level of economic development not only by exports but also by the development of the oil and gas industry. Azerbaijan also adheres to this strategy and would have to be an industrial country. This project will have a tremendous impact on the economy of Turkey and Azerbaijan. The project, whose foundation in 2011 was laid by President Ilham Aliyev and President of Turkey, Recep Tayyip Erdogan, will be completed in March-April 2018.

- SOCAR Turkey invested a certain amount in the construction of Petlim port. Could you please tell us about the importance of the port for SOCAR and Turkey.

- During the period of the acquisition by SOCAR Petkim petrochemical company that was operating in the Peninsula Petkim. SOCAR starts work on its transformation into one of the largest centers of production of petrochemical products in Europe. We invest in the sphere of petrochemistry, logistics, energy, distribution and thus expand. It is through this work we build the port, which will be the third largest container port in the region, Turkey and the Aegean Sea. Construction is carried out by our own funds in the amount of 250 million. Dollars, but the management and provision of equipment to carry out one of the largest container companies in the world APM Terminals. As you know, a 30% share (300 million dollars) in the project belongs to the American company Golden saks. In September and October of this year, completed investment in the construction of the port. Perhaps this fall will take his discovery.

- Another joint project of Turkey and Azerbaijan is the TANAP. Recently, some media reported that the "Turkish Stream" will compete with TANAP, which will reduce the value of this project. Your position in this regard so interesting...

- The cost of the project TANAP - the Southern Gas Corridor is estimated at 45 billion dollars. Investment has already begun. Come work on the project "Shahdeniz-2", the South Caucasus Pipeline, TANAP, TAP. There are both sellers and buyers in this project, contracts were signed. Therefore, the effect of any other project it is possible. At the initial stage 6 billion cubic meters of gas from the planned 16 billion cubic meters will buy the company BOTAŞ, which owns 30% of the project. Annual gas consumption in Turkey is 60 billion cubic meters and controls the amount of BOTAŞ.

- What is the current market value of Petkim and investment volume of SOCAR Turkey in the Turkish economy following the acquisition of Petkim?

- Of course, the acquisition of Petkim has developed and deepened the Azerbaijani-Turkish relations. Petkim acquisition helped to build an oil refinery and port promotion TANAP. Processes up to TANAP, strategic cooperation and fraternal relations, frequent meetings of the presidents of the two countries, the development of these projects, in general, to accelerate economic development of both countries. From this perspective, the purpose of SOCAR Turkey in 2018 to take second place in the national economy with GDP of 800 billion dollars and takes 17th place in the world, it's an unprecedented success in the history of the world. Second place in the economy for 10 years - is a great success. Some companies operate in the country for the past 50, 60, 100, even 200 years. As for investments, I can say that most of the funds went to finance projects. We will not finance all of its own sources. For example, the cost of the project is estimated at a refinery 5,6-6 bln dollars, most of which are borrowed from banks. Without government guarantees, we funded a project worth 3.5 billion dollars. From this perspective, an investment of 20 billion dollars in Turkey will implement our shareholders, such as BOTAŞ, TANAP and BP. We finance part of its own funds, but most take a loan, which will return from income. Our main goal is to turn SOCAR into the largest company of Turkey in accordance with the request of Mr. President.

- As a company that has invested the highest amount in the history of Turkey, which areas are most SOCAR Turkey invests 20 billion manats?

- We are investing these funds only in relation to us having orb - oil refining, petrochemical, power generation, port and TANAP. In the Caspian Sea we have large gas field "Shah Deniz" with reserves of natural gas in the volume of 3-3.5 trillion cubic meters. This gas must be sold to consumers and the only way is the construction of pipelines. TANAP will supply gas through Georgia and Turkey to Europe. All this contributes to the enrichment of the Azerbaijani people and raise the country's prestige in the world. All our projects contribute to the development of the two countries and the transformation into a global company SOCAR. This is very important from a political, strategic and economic point of view. Turkish and foreign investment will turn into a global company SOCAR. Thus, it will play a big role in the economic development of Azerbaijan, and after 2018 will bring an annual profit of 1.5 billion manats.

- What impact can have on the economy of Azerbaijan and Turkey the recent decline in oil prices?

- Economy of Turkey and Azerbaijan is stable, and the political situation also stable. I think that the time of the fall or rise in the price of oil does not matter. Moreover, as we can see, the price went up again. The positions of the Azerbaijani economy, both in terms of structure and sources of replenishment of the State Oil Fund and the state budget, a very strong and pre-calculated.

Therefore, I don't expect that the low oil price will have a significant negative impact. The main thing is that Turkey and Azerbaijan, despite the oil wealth should be advanced industrial countries, where production should not be oriented only to meet domestic demand. For example, in Germany, Japan have not oil or gas. Therefore, it is important condition for industrialization, production organization, as a whole, is constantly striving for the development of society with advanced technologies. All this is necessary for the development of our countries, their economic progress and resolution of political problems. We should not be heavily dependent on oil prices. Particular attention should be given to the production sector to take its worthy place in the world economy. It's necessary to develop the own production. Thus, SOCAR is investing heavily in the implementation of similar projects for the development of real economy.