Transparency initiative annual report

2.6.5. Joint Ventures, associates and subsidiaries of state-owned enterpirses

Information on subsidiaries’ principal activities, country of incorporation and equity interes during 2015 are given in the tables below:

Table 3: Subsidiaries ⁴⁹

Name of subsidiaries	Principal activities	Country of incorporation	Equity interest
SOCAR Turkey Enerji A.Ş.	Refinery	Turkey	86.99%
Azerbaijan (ACG) Ltd	Oil production	Cayman Islands	100%
Azerbaijan (Shah Deniz) Ltd	Gas production	Cayman Islands	100%
Caspian Drilling Company (CDC)	Drilling operations	Azerbaijan	92.44%
SOCAR Energy Georgia LLC	Sales and Distribution	Georgia	51%
SOCAR Overseas LLC	Sales and Distribution	UAE	100%
SOCAR Trading Holding	Sales and Distribution	Malta	100%
Azerbaijan (BTC) Ltd	Sales and Distribution	Cayman Islands	100%
Cooperative Menkent U.A.	Sales and Distribution	Netherlands	99.9%
SOCAR Energy Holdings AG	Sales and Distribution	Switzerland	100%
SOCAR Energy Ukraine	Sales and Distribution	Ukraine	100%
Azerbaijan (SCP) Ltd	Sales and Distribution	Cayman Islands	100%
SOCAR Petroleum QSC	Sales and Distribution	Azerbaijan	100%
Baku Shipyard Company	Construction	Azerbaijan	65%
Socar Polymer LLC	Chemical production	Azerbaijan	71%
BOS Shelf LLC	Construction	Azerbaijan	90%

• 
  On 12 August 2015 the Group made a sale of newly issued shares representing its 13% equity stake in SOCAR Turkey Energy to Goldman Sachs International.
  

Table 4: Joint ventures ⁵⁰

Name of the Joint Ventures and subsidiary companies	SC participating interest (%)	Changes of participating interest during the reporting period(%)	Revenue (mln manats)	Assets (mln manats)	Liabilities (mln manats)
SOCAR KBR	51%	Changed	-	1.0	(1.0)
Azeri M.İ. Drilling Fluids	51%	Unchanged	155.0	75.0	(32.0)
Azerbaijcan Riqs	10%	Unchanged	-	706.0	(4.0)
SOCAR Fugro	51%	Unchanged	14.0	16.0	(14.0)
AZFEN	60%	Unchanged	565.0	301.0	(196.0)
AzGerneft LLC	40%	Unchanged	32.0	98.0	(39.0)
Ekol Engineering Services	50%	Unchanged	9.0	4.0	(1.0)
Caspian Shipyard Company	20%	Unchanged	142.0	97.0	(56.0)
Oil and Gas ProServis	30%	Unchanged	3.0	19.0	(9.0)
Sarmatia	27%	Unchanged	-	2.0	(1.0)
SOCAR AQS	51%	Unchanged	76.0	359.0	(186.0)
SOCAR Aurora Terminalı	50%	Unchanged	19.0	173.0	(82.0)
SOCAR Baghlan LLC	51%	Unchanged	-	15.0	(19.0)
SOCAR Foster Viler Engineering Services	65%	Unchanged	6.0	3.0	(2.0)
SOCAR CAPE	51%	Unchanged	97.0	14.0	(16.0)
SOCAR KPS	50%	Unchanged	3.0	28.0	(29.0)
SOCAR Construction	97%	Unchanged	-	12.0	(1.0)
SOCAR STQ	51%	Unchanged	-	11.0	(22.0)
SOCAR Umid	80%	Unchanged	-	489.0	(43.0)
STYAS	60%	Unchanged	-	4,802.0	(797.0)

Changes in the level of beneficial ownerships in joint ventures for 2015:

• 
  During 2015, the Group made additional contributions to share capital to its joint ventures, SOCAR Umid LLC in the amount of AZN 30 million (2014: AZN 40 million), Azerbaijan Rigs LLC in the amount of AZN 36 million (2014: AZN 14 million) and STYAS in the amount of AZN 607 million (2014: AZN 192 million), respectively; and, in addition to this, contributions in the amount of AZN 2 million were made to other joint ventures.
  

• 
  The Group signed credit agreements related to the construction of Star refinery (a subsidiary of STYAS) in 2015. The total amount of AZN 38 million including comission fees and interest was paid by the Group and accounted for as an additional investment in STYAS.
  

• 
  On 27 march 2015 SOCAR and KBR (KELLOGG BROWN & ROOT SERVICES B.V) is signed a joint venture to establish a new engineering and support services company in Azerbaijan. The purpose of the Company is to provide design, engineering, technical, procurement, construction supervision and project management service for projects across the upstream, midstream and downstream oil and gas sectors, primarily in the Republic of Azerbaijan. The share ownership of SOCAR and KBR in this company is 51% and 49 % respectively.
  

Table 5: Associates ⁵¹

Name of the Associates and subsidiary companies	SC Participating Interest (%)	Changes of participating interest during the reporting period(%)	Revenue (mln manats)		Assets (mln manats)	Liabilities (mln manats)
Ateshgah Insurance Company CJSC	10%	Unchanged		44.0	33.0	(26.0)
Azerbaijan Gas Supplier Company	28%	Unchanged		2,154.0	578.0	(578.0)
AzLab	50%	Unchanged		2.0	5.0	(4.0)
Caspian Geophysical Company BM	45%	Unchanged		26.0	49.0	(40.0)
Caspian Pipe Coatings LLC	50%	Unchanged		65.0	23.0	(8.0)
Cross Caspian Oil and Gas Logistics	34%	Unchanged		33.0	3.0	(3.0)
South Caucases Pipeline Hold Co (“SCPC Hold Co.”)	10%	Unchanged		-	87.0	(1.0)
Interfax Azerbaijan	49%	Unchanged		-	4.0	-
Tankanlagen Mellingeri AG (TAMAG)	33%	Unchanged		3.0	12.0	(3.0)
Tanklager Taegerschen AG (TLT)	21%	Unchanged		1.0	2.0	-
SOGEP AG	34%	Unchanged		4.0	2.0	(2.0)
UBAG AG	24%	Unchanged		15.0	32.0	(28.0)
SAPPRO SA	13%	Unchanged		11.0	5.0	(2.0)
SARACO SA	20%	Unchanged		14.0	17.0	(15.0)
Elektrogas Malta	33%	Unchanged *		-	293.0	(293.0)
South Caucasus Pipeline (“SCPC”)	10%	Unchanged		330.0	5,525.0	752.0
BTC Co	25%	Unchanged		1,286.0	8,212.0	3,293.0
The Southern Gas Corridor (“SGC”)	49%	Unchanged		156.0	8,133.0	5,407.0

• 
  During 2015, the Group made additional contributions to shareholders’ equity to its associates, SCPC in the amount of AZN 107 million (2014: AZN 55 million) and Southern Gas Corridor Company in the amount of AZN 665 million (2014: AZN 38 million) respectively; and, in addition to this, contributions in the amount of AZN 3 million were made to other associates.
  

• 
  In April 2015 the Southern Gas Corridor Company sold 30% of its shares in TANAP to Petroleum Pipeline Corporation for AZN 207 million and sold 12% of its own shares to BP for AZN 102 million. The Group recognized its share of loss from this transaction in profit or loss of the Southern Gas Corridor Company.
  

• 
  There was no change in the level of beneficial ownership between the Government and SOCAR during the reporting period;
  

• 
  Equity method is used to assess the accountability level of joint ventures and associates. Kapital Metodu.
  

Information on joint ventures, associates and subsidiaries of “AzerGold” CJSC was not included in this report due to fact that the company did not have any activity in 2015.