Russian company Lukoil will offer $1.5bn (Rbs151.53bn) as a loan to Socar, an Azerbaijan-stated backed oil company, reported Reuters, citing sources.
The loan forms part of broader agreement that will enable Socar’s Turkey-backed oil refinery STAR to process Russian crude oil.
With the deal, Lukoil will also get another buyer close to ports in Russia.
Following Moscow’s decision to invade Ukraine in 2022, the majority of the refineries in Europe stopped importing Russian oil to comply with sanctions imposed on Russia.
Turkey continues to purchase Russian oil and gas as it has not placed sanctions on the country.
However, due to the international financial curbs on doing business with Moscow, the 200,000-barrel-per-day (bpd) STAR refinery was forced to reduce its imports of Russian crude during the summer of 2023.
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Citing LSEG data, the news agency reported that in 2022, STAR bought an average of 100,000bpd of Urals crude (Urals), which has dropped below 50,000bpd so far in 2023.
According to the sources, Lukoil will begin shipping Urals to STAR in October and is anticipated to provide around 100,000bpd of oil supplies.
Three Lukoil-sourced tankers, Azure Celeste, Ocean Faye and Sea Fidelity, each with 100,000 tonnes of Urals, are now sailing from Primorsk, Russia to Turkey.
As per one of the sources, the tankers are the first deliveries under the new supply agreement.
Despite being subject to some US sanctions on the Russian energy sector since 2014, Lukoil has avoided the more severe restrictions placed on its competitors since 2022.
In addition to having offices in Dubai and Geneva, the company’s trading arm, Litasco, continues to supply oil to its EU refineries in Bulgaria and Romania.
The 2018-commissioned STAR was built primarily to refine sour oil such as Kirkuk or Urals.
Since reducing its imports of Russian oil, STAR has relied on oil grades from Kazakhstan, West Africa and Iraq.