The groundbreaking ceremony of one of the major investment projects in Turkey “SOCAR Turkey Ege” Oil Refinery Complex (“STAR” Oil Refinery Complex) took place on the 25th of October 2011, with the participation of the President of the Republic of Azerbaijan Ilham Aliyev and the President of Turkey Recep Tayyip Erdogan.
The refinery will have the capacity of processing 10 million tons of crude oil and SOCAR will be the main supplier of raw materials. The refinery will produce approximately 1.6 million tons of naphtha, which will in return decrease Turkey’s petrochemical industry’s dependence on foreign countries, reduce the current account deficit of diesel and jet fuel and will act as a source of raw materials for petrochemical products.
The State Oil Fund of the Republic of Azerbaijan (SOFAZ) finances the project in accordance with the Decree No. 2698 of the President of the Republic of Azerbaijan dated February 4, 2013 “On additional measures for supporting the Azerbaijan in “SOCAR Turkey Aegean” Oil Refinery (STAR) project”. According to the Decree a joint stock company was founded with the statutory capital of USD 1.9 billion and financing of the 40% of its shares was assigned to SOFAZ.
According to the Decree, dividends on state-owned shares must be transferred to SOFAZ.
Regardingly, based on the current financial model, received capital will firstly be directed to pay off debt and cover the maintenance expenses of STAR. Then, payment of dividends to SOFAZ is considered.
The statutory capital of the Company was increased from USD 1.9 bln. to USD 2 412.0 mln. and the Company’s 40% share price stood at USD 964.8 mln. According to the Presidential Decree No. 3136 dated July 31, 2017 statutory capital of the Company was increased from USD 2 412.0 mln. to USD 3 482.0 mln. and the Company’s 40% share price stood at USD 1 392.8 mln.
In accordance to the SOFAZ's budget execution SOFAZ has allocated USD 1 392.8 million to the project.
Considering SOFAZ fulfillment of its commitments on financing of the state's share in the ‘Star oil refinery complex construction” project, expenditure item for this project have not been included to SOFAZ”s 2018 budget.
The Opening ceremony of The Star oil refinery was held in İzmir city of Turkey on October 19 2018.
President of the Republic of Azerbaijan Ilham Aliyev and President of the Republic of Turkey Recep Tayyip Erdogan attended the ceremony.
The total price of the project is USD 6.3 billion.