Ilham Aliyev sets task to SOCAR: after three years oil refineries must produce Euro-5 petrol

We are going to upgrade our oil refinery and the project has been already submitted. I do not want to speak about the project in details now. We will, possibly, discuss it separately, Azerbaijani President Ilham Aliyev said at the session of the Cabinet of Ministers devoted to the socio-economic development of the country during 6 months, 2014 on July 10.

“We plan to produce Euro-5 standard petrol at the oil refinery and I have set the goal: we must solve this issue within three years,” said Azerbaijani President.

The Centre of Oil Studies Caspian Barrel has commented on the president’s statement for Turan.

At first, president said upgrade of “our oil refinery,” which is in singular. SOCAR has two oil refineries and this means that Heydar Aliyev oil refinery, which produces fuel, will be upgraded.

Secondly, this also means that Azerneftyag oil refinery will most likely be dismantled. In May 2014 President of State Oil Company of Azerbaijan (SOCAR) told journalists that the fate of this oil refinery is unknown yet.

Thirdly, new installations must be installed at the Heydar Aliyev oil refinery to produce Euro-5 standard fuel. This will require multi-million investments. SOCAR will go for such costs if the bitumen installation is moved from Azerneftyag oil refinery to the Heydar Aliyev oil refinery.

Having focused its efforts at one oil refinery, by 2018 SOCAR will be able to expand production and sell oil products (petrol and diesel fuel) as well as reduce oil refinery’s staff (one oil refinery will be shutdown) to optimize the industrial process. As a result of that the company’s costs must go down and the incomes must go up.

On the other hand, if the events keep developing this way, during 2-2.5 years the government will have a chance to fully dismantle the oil refinery and expand the Baku Boulevard and develop White City on its place.

What is going to happen to construction of SOCAR’s new oil refinery in Garadag region? Caspian Barrel’s analysts believe that this is a very wide-scale project, which envisages construction of gas chemical and gas refining plants first. The new oil refinery will be built only in the middle of the next decade. Therefore, SOCAR thought that the best way out of this situation is to upgrade the Heydar Aliyev oil refinery, which could last about ten more years.—0-