Baku Shipyard

About Baku Shipyard

BAKU SHIPYARD

President of Azerbaijan Ilham Aliyev laid the foundation stone for Baku Shipyard on 19 March 2010 and officiated inauguration on 20 September 2013. Baku Shipyard LLC joint venture was founded on May 10, 2011 under the laws of Republic of Azerbaijan, by the State Oil Company of Azerbaijan (SOCAR) owning 65%, Azerbaijan Investment Company (AIC) 25%, and Keppel Offshore Marine (KOM) 10%, has developed and put into operation the most modern shipbuilding and ship-repair facility in the Caspian Sea. Keppel Offshore Marine (KOM), with its history of being one of the global leaders in offshore rig design, construction and repair, ship repair and conversion and specialized in shipbuilding has been appointed as the operator to manage the yard. Main activity of the Baku Shipyard consists of the construction of a variety of vessels ranging from offshore support vessels, general cargo vessels, tug boats, crane vessels, specialized vessels and passengers vessels to tankers. The yard also undertakes ship repair and conversion of such vessels.

The developed yard has the following facilities:

The yard has a capacity to produce 25,000 tons throughput per annum of steel works for new buildings and able to undertake 80 -100 vessels repairs and conversion of various types.

Currently Baku Shipyard LLC employs about 700 local workers and forecast workforce is about 1500 additional staff when the company will work at full capacity.

 

 SHAREHOLDERS

Keppel Singmarine, a renowned shipbuilder is nominated the operator of Baku Shipyard. Keppel Singmarine had delivered many prestige projects to worldwide clients.

About Keppel O&M

Keppel O&M, a wholly owned subsidiary of Keppel Corporation Limited, is a leader in offshore rig design, construction and repair, ship repair and conversion and specialised shipbuilding. Keppel O&M’s Near Market, Near Customer strategy is bolstered by a global network of 20 yards and offices in the Asia Pacific, Gulf of Mexico, Brazil, the Caspian Sea, Middle East and the North Sea regions. Integrating the experience and expertise of its yards worldwide, the group aims to be the provider of choice and partner for solutions for the offshore and marine industry.

Keppel O&M’s presence in Azerbaijan started with Caspian Shipyard Company (CSC), which was established in 1997 through a landmark partnership between Keppel FELS, a wholly-owned subsidiary of Keppel O&M, and the State Oil Company of Azerbaijan Republic (SOCAR). CSC is the most established yard in the country and has a track record of completing rigs for the Caspian Sea, having delivered the first semisubmersible (Maersk Contractors’ Heydar Aliyev), jackup rig (Transocean’s Gurtulush) and ice-class Floating Storage and Offloading vessel (LUKOIL’s Yuri Korchargin) built in-country.

About SOCAR

SOCAR, the State Oil Company of Azerbaijan Republic, is one of the world’s leading companies in the hydrocarbon industry today. The company’s activities comprise the complete value chain from search, exploration and drilling of oil and gas fields in Azerbaijan over processing, refinery and production to transportation, delivery and selling of the products to domestic and foreign markets.

About AIC

Azerbaijan Investment Company OJSC (AIC) is a state-owned joint-stock company established by the Edict of the President of Azerbaijan in 2006. The purpose of the Company’s investment activity is to ensure long term investment by acquiring shares in the charter capital of joint-stock companies and other commercial enterprises operating in the non-oil sector of the national economy.

         President  Ilham Aliyev  attended the groundbreaking ceremony of a shipyard plant

A groundbreaking ceremony of a shipyard plant, conforming to the modern standards and planned to be built next to the Baku Deep Water Jackets Plant named after Heydar Aliyev, took place. President Ilham Aliyev attended the ceremony. While viewing the model of the plant, the President was informed that the unique plant of the Caspian Basin would be capable of producing 25.000 tons of metal constructions, 4 tankers with a capacity of 15.000 tons (or “Caspian Max” type 2 tankers with a capacity of 60.000-70.000 tons), four tow-equipment ships, and renovating 80-100 various type ships.

 

While viewing the model of the plant, the President was informed that the unique plant of the Caspian Basin would be capable of producing 25.000 tons of metal constructions, 4 tankers with a capacity of 15.000 tons (or “Caspian Max” type 2 tankers with a capacity of 60.000-70.000 tons), four tow-equipment ships, and renovating 80-100 various type ships.

In November of last year, a Memorandum of Understanding was signed between State Oil Company of Azerbaijan Republic, Azerbaijan Investment Company, and Singapore’s “Keppel Offshore & Marine” company on construction and exploitation of the above-mentioned plant. SOCAR possesses 65 percent of the shares, while Azerbaijan Investment Company and “Keppel Offshore & Marine” Company hold 25 and 10 percent of shares respectively. Initial estimations show that the cost of the project will be around 300-350 million USD. The construction of the plant is intended to be completed in 2.5-3 years. After the full start of the facility, thousand workers will be employed during the first phase, and 3-5 years later, this figure will amount 1700-2000.

President Ilham Aliyev viewed the model of the plant and its project schemes at the monitor. While delivering a speech at the ceremony, the President stated that the construction of such plant, the only one of its kind, in the Caspian would play an important role in shipbuilding and in renovation of already existing ships in Azerbaijan Marine.

The foreign minister of Singapore, George Yong-Boon Yeo delivered a speech at the ceremony. Mr Tong Chong Heong, CEO of Keppel O&M, said, “The inauguration of Baku Shipyard signals the opening of a new and additional chapter in the long-standing partnership between SOCAR and Keppel O&M. Our participation in the yard demonstrates our commitment to be a long-term solutions provider for Azerbaijan“.

Ilham Aliyev attended the opening ceremony of the Baku Shipyard

The construction of the Baku shipyard, which will play an important part in strengthening the economic and industrial potential of Azerbaijan,has been one of the major infrastructure projects implemented in the country. The plant, the foundation of which was laid by President Ilham Aliyev on 19 March 2010, will carry out construction and repair of ships of any profile andengage in overall offshore engineering. President Ilham Aliyev watched a video describing the activity of the plant and the layout of the enterprise.

Speech by President of the Republic of Azerbaijan Ilham Aliyev

– Dear ladies and gentlemen, distinguished guests!

It is a very auspicious day today. We are gathered for the opening of a new shipyard in Baku. But first I want to congratulate all Azerbaijani oil workers on their professional holiday. It is a professional holiday of oil workers today.

Azerbaijani oil workers have always played a very important part in the development of Azerbaijan. The activities of oil workers in the independent Azerbaijan are worthy of approval. Thanks to the hard work and talent of oil workers, Azerbaijan has a strong economy today.

The oil industry has always been the leading sector in Azerbaijan and it still is today.

Of course, we are trying to bring our economy to a state in which it will be even less dependent on the oil factor. However, the development of the oil industry, the successful oil and gas operations in Azerbaijan have significantly enhanced the potential of our country. Therefore, taking this opportunity, I want to once again congratulate all employees of the oil company, all Azerbaijani oil workers on this beautiful holiday.

I want to note that I spent a certain part of my life, nine years, in the state oil company. I am proud to say that I have also worked with oil workers. We worked together and achieved great success in the implementation of Azerbaijan’s new oil strategy.

At the same time, it is a historic day today because the “Contract of the Century” was signed 19 years ago. The signing of the “Contract of the Century” was the most important step in the implementation of the new oil strategy of Azerbaijan.

The “Contract of the Century” has a special place in the formation of the oil strategy of Heydar Aliyev. Today it is impossible to imagine Azerbaijan without the modern oil industry. If a new oil strategy hadn’t been started by the decision of nationwide leader Heydar Aliyev in 1994, today our country would go in a completely different direction. Our luck is that at a crucial time for our country and people Heydar Aliyev came to power at the request of the nation and managed to save Azerbaijan from major disasters and catastrophes. The early years of our independence were very difficult. There was a total crisis in the country. The then authorities were unable to perform their duties and led the country into chaos and anarchy. Azerbaijan was effectively on the verge of collapse. Civil war broke out. The anti-national government which started the civil war fled in fear, practically leaving Azerbaijan decapitated. But the wisdom, courage and determination of Heydar Aliyev, as well as people’s confidence in him in the most difficult moments, gave us the chance to put an end to all the negative phenomena and take Azerbaijan along the path of development.

Since that day, Azerbaijan has been experiencing a period of rapid development. Celebrating the 20th anniversary of the Day of Salvation this year, we analyzed all these historical moments again. The foundation of the present-day successful development of independent Azerbaijan was laid exactly 20 years ago. The “Contract of the Century” has played a special role in accelerating the economic reforms taking place in our country. I would like to avail myself of this opportunity to salute the foreign companies that have worked with us for 19 years. Their investment and allegiance to Azerbaijan, and the wonderful atmosphere of cooperation led to today’s realities.

Today we are marking the start of a new project of international cooperation. The establishment of a shipyard in Azerbaijan has also been made possible through international cooperation. There is joint activity of the Azerbaijani side and Singapore’s Keppel here. Foreign experts were involved in the construction of the plant. The equipment installed here was manufactured by leading foreign companies. Azerbaijan owns 90 per cent of interest and Keppel has 10 per cent. Operatorship has been entrusted to Singapore’s Keppel. This, I think, is a perfect manifestation of a new form of international cooperation. During my last official visit to Singapore we also discussed the construction of a shipyard.

The construction of a shipyard is a historic event because Azerbaijan had never had a shipyard before. There were several shipyards in Soviet times but all the work related to the acquisition of vessels was carried out through foreign partners, including the period of independence. Over the past 10 years Azerbaijan has acquired 19 vessels abroad, including ferries, tankers and bulk carriers. It is not difficult to imagine how much has been allocated for this purpose.

But now all kinds of ships that will operate in Azerbaijan will be produced in our country.

This is a great historic achievement. The construction of this plant is the result of economic reforms ongoing in Azerbaijan. The investment made here is measured by very large numbers – $470 million. This is only the first step. Additional $160 million will be invested at the second stage, and 90 per cent of this investment falls on the share of Azerbaijan.

The plant uses advanced technology meeting the latest standards. Some 1,250 jobs have been created here. The average salary is also quite high. Considering our needs, the work that goes on and will go on further in the transport sector in Azerbaijan, we can say with full confidence that the plant will have to operate on a very busy schedule. The State Oil Company should ensure the construction of 130 ships in the coming years. Of course, all of these ships will be built at the plant. In the future, the Caspian Shipping Company will purchase some 20 vessels. All of them will also be built in Azerbaijan. As far as I know, our foreign partners working in the Azerbaijani sector of the Caspian Sea are going to order more than 20 vessels. That is, the existing orders alone should ensure the functioning of the plant around the clock. When you consider that oil and gas operations of other littoral countries are also carried out in the Caspian and that their issues related to transport also need to be resolved, it is not ruled out that our neighbors will also be able to take advantage of the operation of this plant. In short, the construction of this plant is a great historic event. Azerbaijan’s economic reforms are yielding fruit. It also fully confirms that Azerbaijan’s economic policy is carried out in the right direction. Our key economic reforms are aimed at the development of the non-oil sector and industrial production. At the same time, of course, we must ensure the development of the oil sector.

We have made historic achievements in the oil and gas sector in recent years. We can say that the construction of the Baku-Tbilisi-Ceyhan oil pipeline in 2006 and of the Baku-Tbilisi-Erzurum gas pipeline in 2007 has significantly changed the energy map of the region. The beginning of the TANAP project last year and the agreement reached on the construction of the Trans Adriatic Pipeline this year will turn Azerbaijan into a very important international energy player in the coming decades.

Azerbaijan plays an important part in addressing energy security issues. This is a great achievement, our major success and the result of the work done. At the same time, it is huge responsibility because the initiatives put forward by Azerbaijan have gone beyond the regional plane and become global. Azerbaijan’s successful oil and gas policy will contribute to resolving energy problems not only in the region but also in all of Europe. Under such circumstances, of course, our responsibility will enhance further. But we are ready for that. We have done all this work with a sense of great responsibility. So far, we have not taken a single wrong step in the oil and gas sector. Over 20 years, Azerbaijan’s oil and gas potential has considerably increased. In recent years we have turned from a country importing electricity and gas into a country that exports them. We have fully realized our oil and gas potential. In addition, the development of the non-oil sector forms a key part of our economic policy. This plant is a perfect reflection of Azerbaijan’s economic policy – the non-oil sector development and the successful continuation of the policy of industrialization.

I have noted in my earlier speeches that Azerbaijan should have a few major industrial centers: the Garadagh district of Baku, Ganja, Sumgayit and Mingachevir. Of course, other Azerbaijani cities and districts will also do work in the area of industrial development, but these are the major centers. This plant has also been built in the Garadagh district. The construction of this plant also clearly shows the way of reducing dependence on imports. Reduced dependence on imports is not limited to food. At the same time, Azerbaijan should also produce construction materials and establish industrial production.

On the example of the plant we see a renewing, upgrading and industrializing Azerbaijan. The order book of the plant, as

I said, is quite large. The scheduled work alone is worth nearly $4.5 billion. In other words, if the plant hadn’t been built, the money would have gone elsewhere. But now the money will stay here. All the orders will be fulfilled in Azerbaijan. There are many jobs here. As I said, there are 1,250 people working here, and the number of jobs will grow gradually. So this is a concentration and reflection of our successful economic policy.

Of course, the construction of the plant makes a lot of sense also because the construction of such plants today is a matter that may be in the realm of possibility only for successful and developing countries. Today, the financial and economic crisis has affected various parts of the world. But look how much is invested in Azerbaijan, how much work has been done at the facilities I inaugurated in the past weeks and months. The infrastructure is updated, gas lines are built and new industrial enterprises are emerging. A month ago I attended the opening of a large cement plant. In the Garadagh district there already operates a modern cement plant, while a second one is under construction. I am sure that we will get rid of cement imports soon.

In other words, all of the projects necessary and feasible for our country must be implemented. This means the creation of new jobs, the increasing gross domestic product and the transformation of our country into a powerful industrial center.

We have to take into account that Azerbaijan is successfully implementing a project of industrial parks, which are being set up on my initiative. In the near future we will see the first results of an industrial park. I am absolutely convinced that our political views and the concept “Azerbaijan 2020: a vision for the future” will be fully implemented and Azerbaijan will become a powerful industrial center. Today, we are a powerful economic center. We are a transport and logistical center.

We must also become a powerful industrial center because the future must be associated with industrial development.

With regard to the transport sector, I have to say that part of the oil revenue is spent on the development of the transport infrastructure. The construction of a shipyard is a contribution to the transport sector.

We have a favorable geographic location. Azerbaijan is located on natural corridors. The North-South and East-West corridors pass through Azerbaijan. But if there is no modern logistical and transport infrastructure, this location will not matter much. Therefore, along with all other areas, we have invested a lot in the development of the transport sector. This sector has received great attention. In recent years, Azerbaijan has developed all types of transport. Over the last 10 years, we have purchased 19 bulk carriers, ferries and tankers, 31 aircraft and built seven airports.

The Baku-Tbilisi-Kars railway is under construction. It is another project of strategic importance. Roads, major highways and rural roads are built and reconstructed. Such a beautiful shipyard has been built in Baku. A new international sea port, which will be the largest commercial port in the Caspian basin, is under construction in the Alat settlement. At the initial stage, its cargo processing capacity will be 10 million and reach 20 million tons in the future. The future growth of freight traffic requires new infrastructure. And we will create it – this shipyard, the new sea port, the Baku-Tbilisi-Kars railway, the new airports, etc.

Azerbaijan has now become a hub for cargo aircraft. In other words, we must strive to turn Azerbaijan into a center in different directions. We are already achieving that. Azerbaijan is an energy center, an economic center, a center of inter-religious relations, a center of tolerance, an industrial and transport center of the South Caucasus.

But Azerbaijan’s potential is so large and its growth is so rapid today that we can’t limit our work to regional issues alone.

Today, our economic views, economic policies and investment plans already go beyond the region. Today Azerbaijan allocates funds to international organizations and acts as a donor. Azerbaijan is investing heavily in the development of different economies and providing loans. So there is a completely different situation now. Twenty years ago our country could not develop without foreign investment, and a perfect investment climate was established in Azerbaijan for foreign partners. Today Azerbaijan is investing in other markets and economies in order to see even greater effect both in economic and political terms in future.

Our economic policy is developing in a new direction, of course. The estimates of international financial institutions and the ratings of the most authoritative international organizations appreciate the work under way in Azerbaijan. At a time when credit ratings of many countries were falling in the crisis years, the credit ratings of Azerbaijan were upgraded by three leading rating agencies – Fitch, S&P and Moody’s. The World Economic Forum, the Davos forum, ranks Azerbaijan 39th in the world for competitiveness. What does this mean? This means that we are on the same level with 40 leading countries of the world for economic competitiveness. It is a great result and a major achievement. We are first in the CIS.

For the volume of direct foreign investment per capita we are in first place in the CIS.

I am not saying this just to praise ourselves although there are possibilities for that, of course. I am saying this because all of these successes and achievements were made possible by a careful policy. At the same time, I am saying this because we should not be complacent with these achievements. We have to look and we are looking to the future. We plan a development strategy of the country for 20-30 years. Azerbaijan’s industrial potential, the demographic situation, our access to the markets – this is what we have to think about. Our market has increased. But the potential available in Azerbaijan is not entirely consistent with our existing market.

We need to expand into new markets. Of course, we have to access regional and global markets with finished and competitive products. All of the large enterprises created in Azerbaijan should be at this level, at the highest international level. I am sure that the issues I have raised will be resolved in the future. Next year we will adopt the third part of our program on regional development. At the same time, other initiatives related to our industrial and economic policies will be implemented next year. So we should be constantly developing and not be content with our achievements. We must constantly be in search to further strengthen our country and provide a better life for the Azerbaijani people.

I want to say once again that the construction of this plant is a major event, a historic event, a remarkable event. I want to thank everyone who has participated in the construction of the plant. I am pleased and proud that such a great industrial enterprise has already been created in Azerbaijan. I wish the plant every success. Thank you.