SOCAR - SHAH DENIZ GAS CONDENSATE FIELD DEVELOPMENT

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Project ID 15937

Status Complete

Location

Azerbaijan

Business Sector

Natural Resources

Notice Type

Public

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Project ID 15937

Status Complete

Location

Azerbaijan

Business Sector

Natural Resources

Notice Type

Public

Environmental Category

Approval Date

09 Mar 2004

Disclosure date

10 Dec 2003

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

The proposed financing is to fund a portion of the State Oil Company of Azerbaijan Republic's (SOCAR's) share of cash calls relating to the development of the off-shore Shah Deniz gas/gas condensate field (SD) in Azerbaijan in accordance with the SD PSA. SOCAR holds a 10% interest in SD field via its subsidiary, AzSD.

Financing is being sought for stage 1 of a 4-stage field development (volume target is 11.9 Tcf gas-in-place). Initially 9 wells will be drilled from a fixed offshore platform. After processing onshore, gas will be sold to Azerbaijan at the gates of the Sangachal terminal and via the South Caucasus Pipeline (SCP) exported to Georgia and Turkey. Condensate will be exported to the world market via the BTC pipeline.

Transition Impact

The country strategy for Azerbaijan (BDS/AZ/02-1) calls for the Bank to enhance co-operation with SOCAR and to promote its commercialisation through the provision of commercial financing. The key transition impacts of the AzSCP financing are:

Commercialisation of SOCAR - the proposed financing of SOCAR's subsidiary will provide the Bank with the opportunity to assist with SOCAR's corporatisation and commercialisation. Based on the agreed conditionality, which has been defined in close co-operation with the World Bank and the IMF, the envisaged financing and a complementary technical assistance operation will lead to improved financial transparency, the implementation of commercialisation and restructuring measures. It will also clarify the relationship between the State and the state-owned commercial company SOCAR.

Competition - the realisation of the SD project will substantially increase competition in the Azerbaijani, Georgian, Turkish and, in the medium-term, the gas markets in south-eastern Europe.

Demonstration Effect - the SD operator BP is setting standards in governance and business conduct in such areas as operational management, technology, financial transparency, disclosure of payments to the government, health, safety, environmental protection and procurement practices.

The Client

AzSD is SOCAR's 100% subsidiary holding its 10% interest in the SD PSA. SOCAR is the state-owned joint stock company responsible for the development of Azerbaijan's petroleum sector. According to terms of the SD Joint Operating Agreement, BP has been appointed as operator for the upstream development of SD.

EBRD Finance

US$ 110 million, senior loan (of which up to US$ 40 million will be syndicated post-signing).

Project Cost

Total SD stage 1 project cost estimate is US$ 2,263.8 million.
AzSD stage 1 project cost estimate is US$ 256.5 million.

Environmental Impact

The Project was classified as A/1, requiring the completion of Environmental Impact Assessments (EIAs). The EIA has been approved by the Azerbaijan government, and is consistent with EBRD environmental Policies and Procedures. The EIA contains the details for hundreds of environmental mitigation measures that will be implemented to minimise environmental impacts caused by construction and operation of the project.

The EBRD has received the right to sit on the Board of Directors (as a non-voting observer) to ensure that AzSD abides by its environmental undertakings as outlined in the Term Sheet and detailed in the Environmental and Social Action Plan which has formed part of the environmental documentation available to the public for review and comment. EBRD has worked with the sponsor to develop a rigorous monitoring program using in house staff and independent environmental consultants to ensure adequate implementation of the measures. The Team continues to work towards the introduction of a National Oil Spill Response Plan.

The ESIA, ESAP and other related documents can be viewed at www.caspiandevelopmentandexport.com/ASP/PD_SD.asp or on the EBRD website.

There is an Environmental and Social Impact Assessment available for this project.

Technical Cooperation

TC project (TCS ID 13188) - Commercialisation and restructuring of SOCAR - was initially approved by TC Com on 9 April 2003 and re-approved, with 2-stage approach, on 5 November 2003.

Company Contact

State Oil Company of Azerbaijan Republic
73 Neftchilyar pr.
Baku 370004
Azerbaijan

Mr. Raymond Conway
Senior Banker
EBRD
e-mail: conwayr@ebrd.com

Transition impact

ETI Score:60

PSD last updated

01 Feb 2019

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Project ID 15937

Status Complete

Location

Azerbaijan

Business Sector

Natural Resources

Environmental Category

Disclosure date

18 Aug 2003

Purpose of the Environmental and Social Impact Assessments

Financing, via a special purpose vehicle, of a portion of the State Oil Company of Azerbaijan Republic's (SOCAR) share of the development costs of the Shah Deniz Gas Condensate Field.

The Shah Deniz Gas/Gas Condensate Field is located off shore of Azerbaijan in the Caspian Sea and is estimated to have approximately 30 trillion cubic feet of gas-in-place and condensate-in-place of over 1.5 billion barrels.

There is a project summary document available for this project.

ESIA Summary

EIA summary (2MB - PDF)

Full ESIA availability

Web site: www.caspiandevelopmentandexport.com/ASP/Socar.asp

Full ESIA documentation is available locally at:
EBRD Headquarters in London, environmentandsocial@ebrd.com

And

Enterprise Centre
Icheri Sheher
99, Mirza Mansur St.
Baku Azerbaijan,370004
Tel: +994 12 979 624 or +994 12 979 124
Fax: +994 12 979 654
Contact: Fira Mamedova

And

EBRD Office in Baku
Landmark Building 1
96 Nizami St,
Baku, Azerbaijan
Tel: +994 12 971 014
Contact: Raymond Conway

Enquiries

Comments on the EIA can be sent by 18 December 2003 to: caspianoilandgasprojects@ebrd.com

SOCAR
73, Neftchilar ave.,
Baku, Azerbaijan
Tel: +994 12 921 130
Contact: Agamahmud Siradjev

And

BP Office in Baku
2 Neftchilar Prospekti
Villa Petrolea, Baku
Tel: +994 12 979 000
Fax: +994 12 979 602
Contact: Yuliy Zaytsev

This document was prepared at an early stage of project development, before consideration by the EBRD Board of Directors. Details of a project may change following disclosure.

Environmental and Social Impact Assessments and ESIA summaries are produced by project sponsors, and the EBRD makes them available without any comment or implied endorsement. Any views expressed or statements made in the Environmental and Social Impact Assessment or the ESIA Summary do not necessarily reflect the views or opinions of the EBRD.

Last updated 25 June 2014

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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SOCAR - SHAH DENIZ GAS CONDENSATE FIELD DEVELOPMENT

Project timeline

Project Description

Transition Impact

The Client

EBRD Finance

Project Cost

Environmental Impact

Technical Cooperation

Company Contact

Transition impact

PSD last updated

Business opportunities

General enquiries

Public Information Policy (PIP)

Purpose of the Environmental and Social Impact Assessments

ESIA Summary

Full ESIA availability

Enquiries