BP Plc, Statoil and Unocal Corp will guarantee loans Azerbaijan needs to finance its portion of a $2.9 billion pipeline that will carry crude oil to the Mediterranean Sea, a government official told Interfax. The government needs the backing because its own credit rating is too low to get loans from private banks.
Azerbaijan's long-term debt is rated BB- by Fitch IBCA, three levels below investment grade. No other company rates Azerbaijan. BP and its partners plan to build the 1,760-kilometre pipeline to ship one million barrels of oil daily across Azerbaijan and Georgia to the Turkish port of Ceyhan on the Mediterranean. The route was the most expensive of three alternatives to link Caspian Sea oil fields containing as much as 40 billion barrels of crude with the world market. Azerbaijan's state oil company holds 25 per cent of the venture. ©