OREANDA-NEWS. May 19, 2011. Russia’s Lukoil and the EBRD announced that the financing for Shah Deniz, the largest offshore gas field development in the Caspian Sea, had achieved full completion, reported the press-centre of EBRD.

Shah Deniz is now the largest new gas field in the region, serving both the Azeri and Georgian domestic gas markets, as well as exporting large quantities of gas to international consumers.

The Shah Deniz project has been at the core of the EBRD’s efforts to promote the development of the EITI (Extractive Industries Transparency Initiative) in Azerbaijan, which has now become the first country to qualify as compliant with the industry’s transparency standards (commonly known as Publish What You Pay).

The EITI Global Secretariat in Oslo officially named Azerbaijan as the first country to be awarded the title of ‘EITI Compliant.’

"The Shah Deniz project is very important for the region, providing jobs and development opportunities not just in Azerbaijan, but more widely throughout the Caucasus region", said Kevin Bortz, Director of the EBRD’s Natural Resources Team.

"In addition, this is a new source of gas not just for the domestic markets of Azerbaijan and Georgia, but also for the region, increasing diversification and stability of supplies", Mr. Bortz added.

"We are very pleased with this result", commented Oktai Movsumov, Deputy Head of Main Division of Treasury and Corporate Finance, Head of Project and Structured Finance at the LUKOIL group. "This is the first gas project in the Former Soviet Union to achieve such important landmark as financial completion, showing the strength of what is truly world-class asset", Mr. Movsumov added.

The development of the Shah Deniz field together with Azerbaijan’s AIOC opened up the whole Azeri oil and gas sector and introduced the most advanced drilling and completion technologies.

LUKOIL’s investment in the Shah-Deniz Stage 1 project dates back to 2004. In July 2005, the EBRD provided USD 180 million in 12-year project finance for it.

LUKOIL’s share of the Project is 10 percent. The otther partners are BP (25,5 percent), Statoil (25,5 percent), Total (10 percent), NICO (10 percent), SOCAR (10 percent) and TPAO (9 percent).