SOCAR may open new network of fuel stations in Turkey

By Azernews

By Nigar Abbasova

Azerbaijan’s state energy major SOCAR, which has earlier reached an agreement on the purchase of one of the assets belonging to Austrian oil group OMV in Turkey, may consider alternative options, should the deal is not successful.

 SOCAR Turkey Energy Director General Zaur Gahramanov told Sabah newspaper that the company will consider two options – creation of a new network of fueling stations or acquisition of a company engaged in the sphere.  

“The acquisition of OMV Petrol Ofisi [a leading company in the Turkish oil products retail and wholesale market] is the most suitable option for SOCAR, but we have alternatives. We can launch talks on the acquisition of another company or create a new network in Turkey” he said.   

In early 2016 Austrian company announced its intention to sell the whole packet of shares of OMV Petrol Ofisi A.S. to optimize its own costs.  The company operates 1,785 refueling station throughout Turkey and owns the country’s largest fuel storage and logistics business.

Participants of the tender on the acquisition of OMV assets are SOCAR, Aramco and Petromium-C consortium and Vitol. Within the scope of its strategy, the company is intended to be focused on the extractive enterprises as well as on the oil processing activities.

Head of SOCAR Rovnag Abdullayev earlier said that the interest of the company in the assets is pegged to the Star Petroleum refinery in Izmir.  

STAR Rafineri A.S., majority owned by Azerbaijan’s state energy company SOCAR, will be capable of refining Azeri Light, Kirkuk, and Urals oil grades. Once completed, the Star refinery will be the first refinery to start operations in Turkey since 1972.

The annual naphtha production volume, used by Petkim as the main raw material, will hit 1.66 million tons at the Star refinery. Along with naphtha, the new oil refinery will produce diesel fuel with ultra-low sulfur to the amount of 5.95 million tons, aviation kerosene - 500,000 tons, reformate - 500,000 tons, petroleum coke - 630,000 tons, liquefied gas - 240,000 tons, mixed xylene - 415,000 tons, olefin LPG - 75,000 tons and 145,000 tons of sulfur. The refinery will not produce petrol and fuel oil.

Gahramanov further spoke about SOCAR investments in Turkey, noting that the company occupies a lion’s share in the total volume of investments made by Azerbaijan in Turkey.

He said that the company has already invested some $9.5 billion out of planned $18 billion of investments.

“Every year, SOCAR invests some $150 million in Petkim. Without these investments our participation in the market will drop from 17 to 10 percent. One of the obstacles for Petkim is free trade deals of Turkey with Iran and South Korea. Petrochemical production imported from these countries reduces competitiveness of Petkim production. We hope that Turkey will set taxes on such goods. Otherwise, activity of Petkim will not be steady enough,” he mentioned.

The company produces plastic packages, fabrics, detergents, and is the sole Turkish manufacturer of such products, a quarter of which is exported.

Petkim shareholders are: SOCAR Turkey Petrokimya A.?. – 51 percent, SOCAR Turkey Energy – 1.32 percent and 47.68 percent – in free float.