The arbitral award dated3rd February 2021 was issued by arbitration tribunal acting in accordance with the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL) in favor of Azerbaijan (ACG) Limited, a company within SOCAR Group.
The London-seated tribunal awarded to Azerbaijan (ACG) Limited a monetary compensation exceeding USD 132,000,000 in the third arbitration between companies, belonging to SOCAR Group and Palmali Group. This was the last of three arbitration proceedings initiated by companies belonging to SOCAR Group against the companies of Palmali Group and Mubariz Mansimov due to the violation of commitments to SOCAR Group by Palmali Group and Mubariz Mansimov.
The contracts relate to the installation of three process units, necessary for the production of EURO-5 gasoline at the Heydar Aliyev Baku Oil Refinery in Baku, Azerbaijan
Milan, 03 February 2021 - State Oil Company of Azerbaijan Republic (SOCAR)’s subsidiary Heydar Aliyev Oil Refinery has signed two Engineering, Procurement and Construction contracts with Tecnimont S.p.A. and KT-Kinetics Technology S.p.A., the subsidiaries of Maire Tecnimont S.p.A., as a part of the Modernization and Reconstruction of SOCAR Heydar Aliyev Oil Refinery in Baku, Azerbaijan.
The overall contracts’ value equals to approximately USD 160 million.
SOCAR’s president Rovnag Abdullayev, Italian Ambassador in Azerbaijan H.E. Augusto Massari, Maire Tecnimont Chairman Fabrizio Di Amato and Maire Tecnimont Group CEO Pierroberto Folgiero, along with other SOCAR’s and Maire Tecnimont’s senior officials have attended the signing ceremony.
econd arbitral award was issued on 26th January 2021 under London Maritime Arbitration Association terms in favor of SOCAR Group.Arbitration Tribunal awarded US$ 63,000,000 in the second proceeding between SOCAR and Palmali.
SThe sum consists of amounts payable by Palmali and Mubariz Mansimov, as well as interest accrued and legal expenses and disbursements. Palmali's multi-million dollar counterclaim was entirely dismissed.
SOCAR and Palmali used to have commercial relations previously, although the two companies have never founded a joint venture. In 2018, due to Palmali’s violation of commitments, the companies, belonging to SOCAR Group initiated three arbitration proceedings against the companies of Palmali Group and Mubariz Mansimov.In the first one London Court of International Arbitration proceedings awarded SOCAR Overseas US$ 49,500,000. Thus, two out of three arbitration proceedings already resulted in US$ 112,500,000 in total being awarded to SOCAR.
Third dispute between SOCAR and Palmali is also the subject of arbitration proceedings. Those proceedings have been concluded now, and the Tribunal's Award is expected.
Due to the COVID-19 pandemic the year 2020 was marked as a period of global recession, which affected SOCAR too.
Under the OPEC+ agreement, SOCAR has significantly reduced both drilling operations and its oil production. The OPEC+ production cuts supported the recovery of oil and gas prices during the year. SOCAR also managed to ensure the sustainability of business operations, both within the framework of this agreement and by applying wider optimization. This is reflected in the key production figures.
In 2020, about 56 thousand meters1 of drilling work was conducted by SOCAR. The company produced 7.4 million tons2 of oil and 7.3 billion cubic meters3 of natural gas on the fields operated. The upward trend in total gas production in the country continued, while the oil production declined, mainly due to voluntary oil output cuts imposed by the OPEC+ agreement. Compared to 2019, total natural gas production increased by about 4% to 37.1 billion cubic meters4. During the year, Azerbaijan produced 34.5 million tons5 of crude oil.
The State Oil Company of the Azerbaijan Republic (SOCAR) is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate.read more
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