Socar subsidiaries may issue corporate bonds
BAKU. June 5 (Interfax) - Subsidiaries of State Oil Company of the Azerbaijani Republic (Socar) may issue corporate bonds to finance investment projects, Socar Vice President for Economic Issues Suleiman Gasymov told journalists on Wednesday.
"We are considering the possibility of issuing corporate bonds in our subsidiary Caspian Drilling Company to finance construction of a new drilling platform. Another subsidiary that might issue corporate bonds is Socar-Umid, which is developing the Umid field," Gasymov said.
He did not specify the volumes of the issues, noting that "this is also needed to revive the local securities market."
"In my opinion, the Azerbaijani market will not bear a large volume of corporate bonds. The volume of the issue, in order to test the capability of the market, should be 50 million-100 million manat ($64 million-$127 million)," Gasymov said.
Gasymov did not specify the possible maturities.
"Work to develop the Umid field is currently being financed with Eurobonds. If there is a need in future, then corporate bonds will be issued," he said.
Caspian Drilling Company (CDC) was formed by Socar and U.S.-based Global Santa Fe. CDC owns two up-to-date semi-submersible drilling platforms: Istiglal and Dede Gorgud.
The Umid-Babek block is located in the Azerbaijani sector of the Caspian, 75 kilometers from Baku. Reserves at the field are estimated at 200 billion cubic meters of gas and 30 million tonnes of condensate. Commercial production at the field began in September 2012.
The official exchange rate on June 5 was 0.7846 manat/$1.