Lukoil Overseas: Shah Deniz Gas Condensate Field Develop. II

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Translated version of this PSD: Azerbaijani The proposed financing is a pre-planned increase to the existing exposure of the Bank to the Lukoil Overseas Shah Deniz Ltd (“LSD”) relating to the development of the off-shore Shah Deniz gas and condensate field (“SD”) in Azerbaijan. LSD holds a 10% interest in SD field. Financing is sought for the stage 1 extension of field development and implementation of the more advanced technologies, including on the existing terminal and platform. The transition impact potential of the proposed project is expected to derive from a significant transfer of new technologies, skills and knowledge unique for the region. The Project is also supporting a more widespread private ownership in the Azeri upstream gas market. LSD is Lukoil Overseas' 100% subsidiary. Lukoil Overseas is a holding company that manages Lukoil’s participation in exploration and production projects outside Russia. In Azerbaijan the Lukoil group has various oil and gas activities. The UK's BP is the operator for the upstream development of SD. Senior loan of US$ 200 million (not syndicated). Total SD Stage 1 extension and modernisation project cost estimate is US$ 2128 million. LSD stage 1 project cost estimate is US$ 212.8 million. The project has been assigned Category C as the environmental due diligence was completed under the original Shah Deniz project.. As this project is limited to additional financing for the existing project, and the business activity for which EBRD financing is requested was fully covered under the original project appraisal, no additional environmental appraisal is required on this project. The original appraisal of this offshore gas production project was completed as part of the comprehensive evaluation of the ACG, BTC, Shah Deniz and SCP oil and gas production and transportation, which included detailed Environmental and Social Impact Assessments and comprehensive public consultation. The ESIA, ESAP and other related documents can be viewed here or on the EBRD website. As shown here the Operator of this project prepares detailed annual EHS reports documenting activities on the project over the year and summarizing EHS performance. In addition to this, the Company is providing EBRD detailed monthly reports highlighting business activities and performance. As shown in the reports available on the web site, this project has a high level of transparency and is adhering to strict international and national standards. Numerous external and NGO auditing reports are available for the associated oil and gas projects. None. Aleksandr Karasev JSC Lukoil Sretenskiy blvd, 11 Moscow, 101000, Russia Email: mail@lukoil-overseas.com or Ms. Kseniya Solodnikova Principal Banker EBRD Tel: +4957871111