The European Bank for Reconstruction and Development (EBRD) will provide a syndicated loan to the Russian company LUKOIL for providing its share within the framework of the second stage of development of the gas condensate field Shah Deniz in the Azerbaijani sector of the Caspian Sea.
The EBRD has approved $500 million loan to Russia's second biggest oil producer, Lukoil, for participation in the development of Shah Deniz gas field in Azerbaijan
The credit is a half of $1 billion loan to be allocated to Lukoil by the EBRD and the Asian Development Bank (ADB). The EBRD and ADB were appointed by Lukoil as the mandated lead arrangers for the transaction, which is aimed at financing the company's 10 percent share in the project.
LUKOIL has 10 percent stake in the Shah Deniz field development project. The total volume of additional funding of LUKOIL within the framework of the equity in the Shah Deniz 2 project is $3 billion.
The LUKOIL Overseas Shah Deniz company also plans to raise a loan from the ADB, which is ready to allocate $450 million to the company.
The EBRD has already disbursed $380 million to Lukoil's subsidiary, Lukoil Overseas Shah Deniz Ltd (LSD), for the company's activity in the Shah Deniz project. The first tranche totalled $180 million was allocated in 2005, while the second tranche of $200 million was allocated in 2014.
Shah Deniz, Azerbaijan's biggest gas field, is being developed by BP, Azeri state energy firm SOCAR and others and is estimated to contain 1.2 trillion cubic metres of gas.