Azerbaijan: Oil Refinery Portfolio

 British Petroleum (NYSE:BP) controls the Azeri-Chirag-Deepwater Gunashli which is the largest oilfield in Azerbaijan’s territory in the Caspian Sea. BP also found the Shah Deniz Oil Field which was one of its largest finds in the company’s history. Stage 2 of the Shah Deniz project was approved in 2013 and is currently being designed. There is great potential in this project for the production of natural gas (1). Additionally, BP’s deal with Exxon Mobil Corporation extends 30 years and should provide stability over time (2).
 
State Oil Company of Azerbaijan Republic is progressing very well into modernizing and cleaning its refineries, notably the Heydar Aliyev refinery in Baku (3). SOCAR’s investment program is aiming to integrate technology to maximize efficiency in the refineries as many are outdated (4). This will ultimately be beneficial in the long run, making the company well positioned for success in years to come.
 
Amec Foster Wheeler (NYSE:AMFW) is providing leadership and project management expertise to local production facilities in Azerbaijan. They have achieved significantly higher safety performance ratings, ultimately maximizing profits and efficiency through their work (5). They are directly benefitting from the growth and development of refineries and they have seen a significant increase in demand for their services as a result.
 
ExxonMobil (NYSE:XOM) controls nearly 8 percent of the Azerbaijan International Operating Consortium (AIOC). They have the resources and size that the majority of their competition doesn’t, which provides security, a major advantage. Their joint agreement with BP allows them to produces hydrocarbons from the Azeri-Chirag-Gunashli (ACG) field in the Caspian Sea (6). This is one of the prized locations for oil in all of Azerbaijan, this their ownership of the field further supports the company’s value (7).
 
Petronas bolstered its status in its acquisition of Azerbaijani gas-related assets in 2015, the second largest deal in Malaysia that year. They acquired over 15% of Statoil’s share in the Shah Deniz production agreement as well as 15.5% in the South Caucasus Pipeline Company (8). As the Shah Deniz project moves to Phase 2, the company is setting itself up for success.  Additionally, relations are reportedly growing with SOCAR, potentially fostering new business and agreements down the road (9). 
 
Lukoil Oil Company (OTC-LUKOY) owns a 10% share in the Shah Deniz project and would be smart investment because of their simplicity within the the Azerbaijan oil sector (10). They are involved solely with this project, a project with impressive projected results. It is one of the biggest projects the country has ever seen, with investors pouring in money from all over because of the potential returns. 
 
Heydar Aliyev Baku Oil Refinery operates its own refinery and is able to meet the country’s entire demand for petroleum products. They are owned by SOCAR and have been cutting edge in terms of advancing technology and pushing the boundaries of oil refining (11). The one billion dollar investment that was agreed upon this past year will continue to lead to success for the refinery for years to come, making the company a wise investment.
(1) "BP Declines Despite Buy Rating (BP, XOM) | Investopedia." Investopedia. N.p.,         05 July 2016. Web. 14 Aug. 2016.
 
(2) "Our History." Bp.com. N.p., n.d. Web. 12 Aug. 2016.
 
(3) "SOCAR." SOCAR. N.p., n.d. Web. 16 Aug. 2016.
 
(4) Brelsford, Robert. "SOCAR Lets Contract for Baku Refinery Modernization Program." OGJ.com. N.p., 26 Apr. 2016. Web. 16 Aug. 2016. 
 
(5) "Developing a Sustainable Oil and Gas Business in Azerbaijan." Amec Foster Wheeler. N.p., n.d. Web. 15 Aug. 2016.
 
(6) "Learn about ExxonMobil's Operations in Azerbaijan." ExxonMobil. N.p., n.d. Web. 13 Aug. 2016.
 
(7) "Doing Business in India." (2010): n. pag. Web. 16 Aug. 2016.
 
(8) "Petronas' Deal in Azerbaijan - 2nd Biggest M&A Deal in Malaysia in 2015." Trend.Az. N.p., 25 Dec. 2015. Web. 11 Aug. 2016.
 
(9) "Petronas Keen to Improve Ties with SOCAR of Azerbaijan." N.p., n.d. Web.
 
(10) "Shah Deniz - Azerbaijan - LUKOIL Overseas." Shah Deniz - Azerbaijan - LUKOIL Overseas. N.p., n.d. Web. 13 Aug. 2016.
 
(11) "Home Products & Services Company A - Z Projects Features Videos White Papers News Events Advertise With Us Report Store Heydar Aliyev Oil Refinery, Baku, Azerbaijan." Hydrocarbons - Technology. N.p., n.d. Web. 14 Aug. 2016.

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