Turkish state-owned oil and gas explorer and producer TPAO has signed a $1.0 billion (754 million euro) loan agreement with local Isbank [BIST:ISATR] and Vakifbank [BIST:VAKBN] to finance the purchase of an additional 10% stake in the Shah Deniz gas field in Azerbaijan, Turkish media reported on Thursday.
TPAO will raise its stake in the Shah Deniz project to 19% and become the second largest shareholder in the project, Turkey’s energy minister Taner Yildiz said during the loan signing ceremony, as quoted by daily Dunya.
According to See News, the news follows the announcement of Total (EPA:FP) in May that it had agreed to divest its 10% stake in Shah Deniz and the South Caucasus Pipeline to TPAO for $1.5 billion. The Shah Deniz field is operated by British petroleum (BP) with partners SOCAR, Statoil, Lukoil, Nico, Total and TPAO.
Isbank and Vakifbank will each lend $500 million for a term of seven years with a three-year grace period. TPAO will secure the remaining financing from own resources, the daily said citing the minister.
The offshore Shah Deniz field covers approximately 860 square kilometres in the Caspian Sea. The first phase of the field exploitation started in 2006 and is currently producing 200,000 barrels of oil equivalent per day. The project entered its second development phase at the end of 2013.
