Yukos Enters Talks with Socar on Acquiring Stake in BTC Pipeline

Yukos, one of Russia's largest oil producers, has initiated talks with Azerbaijan's state oil company Socar regarding the possible acquisition of a stake in the Baku-Tbilisi-Ceyhan (BTC) oil pipeline. This development comes after Lukoil, another Russian oil major, expressed interest in buying a 7.5% stake in the pipeline. The talks involve Yukos's potential involvement in the Azeri upstream, including the Guneshli oil field, and may pave the way for Russian participation in the project.

Key Takeaways:

• Yukos has entered talks with Socar on acquiring a stake in the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, valuing $2.9 billion.
• The discussions also include possible participation of the Russian oil company in the Azeri upstream, including the shallow water Guneshli oil field.
• Lukoil president Vagit Alekperov has expressed interest in buying a 7.5% interest in BTC out of the 45% stake currently held by Socar.
• The Russian government's engagement in the region is believed to be a key factor in Lukoil's and Yukos's increased interest in the project.
• Wood Mackenzie estimates that the pipeline guarantees an annual rate of return of 12.5%, making it a viable project.
• Socar is in talks with the World Bank and the European Bank for Reconstruction and Development (EBRD) for funding the project.

Statistics:

• The BTC pipeline has an estimated annual rate of return of 12.5%, calculated by Wood Mackenzie.
• The project's estimated value is $2.9 billion.
• Socar is seeking a $200 million loan from the World Bank for the project.
• The project's completion of the detailed engineering study is expected around March 2022.

Sources:

• NC (Noticias Classicas or equivalent), October 18, p8
• NC (Noticias Classicas or equivalent), November 8, p8
• Industry sources and reports, including Wood Mackenzie.