SOFAZ issues over $770 for floating drilling rig project

/By Azernews/

By Nigar Abbasova

Azerbaijan’s state oil fund SOFAZ has so far allocated $770.1 million to fund construction of a new generation floating drilling rig in Azerbaijan.

The Fund told Trend that some $74 million was issued for the project in the first half of 2016. Overall cost of the project is about $1,117 billion.  

Earlier, SOCAR President Rovnag Abdullayev said that the Fund has managed to save about $60 million in the process of construction of the drilling rig. The rig is being constructed for SOCAR’s needs.

Caspian Drilling Company (CDC) will act as operator of the new drilling rig. CSC is considered to be the first international rig construction, repair and conversion yard in the Caspian Sea region servicing the offshore oil and gas industry. SOCAR owns 92.44 percent of share capital in the company. The Singaporean Keppel FELS Limited was chosen as the contractor of the drilling rig's construction. CDC and SOCAR signed an agreement on the implementation of construction works in 2015.

The new rig will be designed to drill wells up to 8,000 meters at the depth of 1,000 meters. The new rig is expected to be commissioned in March, 2017.  

Two leasing options are currently being considered. The rig may be leased to the French Total Company to implement drilling operations on Azerbaijani Absheron gas-condensate or to BP for the use within the framework of the third phase of development of “Shah Deniz”. The decision is expected to be taken before the completion of the construction process.

SOFAZ was established in 1999 with assets of $271 million. Based on SOFAZ's regulations, its funds may be used for construction and reconstruction of strategically important infrastructure facilities, as well as solving important national problems. 

So far, SOFAZ has funded many strategic projects for Azerbaijan including the construction of Baku-Tbilisi-Ceyhan pipeline, Baku-Tbilisi-Kars railway, Oil and Gas processing and Petrochemical Complex, as well as, Samur-Absheron irrigation system, Oguz-Gabala water pipeline and State Program on education Azerbaijani youth abroad.

The assets of SOFAZ increased by 4.6 percent as of July 1, 2016 and stood at $35.1 billion as compared to $33.57 billion in early 2016.