SOCAR not going to build oil refinery in Russia jointly with Rosneft, says governmental source

None of the investments projects in the oil refining industry, in   particular, SOCAR involvement in construction of the oil refinery in Kuban, have been discussed with Rosneft President Igor Sechin in Baku, a source from the Azerbaijani government in charge of the fuel-energy sector told Turan’s correspondent.

Asked by Turan agency what was the Azerbaijani Energy Minister Natig Aliyev’s statement based on, the same source said that “Minister told TACC’s correspondent that he is not informed about result of the talks of Rosneft’s President in Baku, but he added his own suppositions. It looks like mass media have presented this statement as a result of the meeting.”

The same source added that since August 2013 SOCAR has considered various options of cooperation with Rosneft in fields of oil transportation and refining. However, the first option was related to reverse transportation of Russian oil via the Baku-Novorossiysk pipeline and refining of the additional volume of oil at the oil refineries in Baku. As SOCAR’s oil production goes down,  filling of local oil refineries with raw materials will become urgent very soon (oil extracted from the Azeri-Chirag-Guneshli oil fields and condensate from the Shah Deniz field are fully exported).

A source from SOCAR’s Investments Department told Turan that construction of small oil refineries is unprofitable. As far as big oil refineries are concerned, SOCAR has no plans to implement such projects at present. “We have been building oil refinery with refining capacity of 10 million tons of oil a year in Turkey and this is our strategic refining project. Even Azerbaijan is not going to build new oil refinery in the coming years. Only in the future it will become part of a wide-scale project of the Garadag petrochemical and oil refining complex,” a source from SOCAR explained.

* According to Turan, from January to September 2014 SOCAR has shipped 762,582 tons of oil from the Novorossisk port, down 42.6% against the same period last year. This year it is planned to ship 1 million tons against 1.75 million tons in 2013.

** In 2013 Rosneft extracted 206 million tons of oil and refined 90 million tons. The company has nine oil rfeineries. According to the Ministry of Energy, at present Russia has 68  oil refineries with the capacity of primary oil refining of 299 million tons a year.

According to the Krasnodar Ministry of Industry and Energy, in 2014 the volume of oil and oil products refining in Kuban must increase by 30% up to 19.5 million tons a year. In 2013 the volume of oil refining increased by 13% up to 15 million tons against 2012.

 At present Krasnodar region has five oil refineries. The biggest one Tuapse oil refinery has the capacity of 15 million tons of oil a year. Upgrade of the Afip oil refinery is  currently in progress and it will allow increasing the annual refining capacity up to 6 million tons.—0-