The Azpetrol Holding of Azerbaijan plans to conclude by end-2004 its negotiations with the Moldovan Government on the terms of obtaining the Giurgiulestii Oil Terminal in southern Moldova

The Azpetrol Holding of Azerbaijan plans to conclude by end-2004 its negotiations with the Moldovan Government on the terms of obtaining the Giurgiulestii Oil Terminal in southern Moldova, on the Danube River. The Sharg News Agency of Azerbaijan has reported that in case of a positive outcome of the talks, the construction of the Jurjulesti oil terminal and passenger port will be started already in 2005, to be followed by the building of an oil refinery there. Azpetrol seeks to obtain tax privileges and land allocation for the construction. For instance, the investor is asking 0% rates of the Customs duty and of the VAT for a 50-year period, and a 25% profit tax rate, like in Azerbaijan, although the profit tax rate in Moldova is only 20 percent, and it will fall even to 18 percent next year. So, if this latter rate is imposed to Azpetrol here, then in accordance with the inter-governmental Moldova-Azerbaijan agreement on double taxation avoidance, the difference will have to be paid at home. The idea to complete the Jurjulesti project and to sell out the oil terminal was discussed during the official visit of Moldovan President Vladimir Voronin to Baku (Azerbaijan) in October 2004. To put the idea into reality, a company will be opened in Moldova - a part of the mighty Azpetrol Group. Azerbaijan is thus realizing its years-old dream to expand oil business beyond the FSU Caucasus republic's national territory. The very advantageous location of Giurgiulesti permits to organize a fairly efficient transportation of oil products to Moldova and neighbor countries. The raw material for the Jurjulesti refinery will be the Azerbaijan oil. Azpetrol Holding controls more than a half of the oil market in Azerbaijan.