The State Oil Company of Azerbaijan Republic (SOCAR) plans to continue to expand abroad. The company has invested 4.487 bln USD in foreign projects in total as of the beginning of 2016,
Report informs citing Natural Gas World, SOCAR Investment Department has said.
3.334 bln USD of the investment were spent in Turkey. SOCAR has invested 414.5 mln USD in Switzerland, 334.3 mln USD in Georgia, 280.8 mln USD in Ukraine and 71.3 mln USD in Romania.
Chairman of the Department Vagif Aliyev saidthat the company has been diversifying its revenues from various sectors: “Despite the low oil price we could continue profitable business activities. We would complete several major projects in Turkey by 2018 and this would be a milestone year for SOCAR revenues.”
V.Aliyev also referred to SOCAR Aurora Fujairah Terminal, saying that this project expanded the company’s activities in far markets. According to him, SOCAR earned 948 mln AZN (532 mln USD) from this project in 2015, about 257 mln AZN or by 37% more than the previous year.”
SOCAR Aurora Fujairah Terminal is a joint venture of SOCAR, Aurora Progress and the government of Fujairah.
Georgia
Georgia was the first overseas market SOCAR invested in. As of end-2015, SOCAR Georgia Petroleum has imported 3.336 mln tons of gasoil and gasoline. The company owns 114 filling stations in Georgia, comprising 105 gas stations, 8 compressed natural gas stations and one LPG station.
Alongside the oil products sector, SOCAR has been involved in Georgia’s natural gas sector.
Tbilisi requested imports from Azerbaijan after Russia increased the gas price for Georgia from 180 USD to 320 USD/”000 m³ in 2007. Azerbaijan responded with supplies to Georgia at 150 USD/”000 m³. Then the ex-president Mikhail Saakashvili awarded SOCAR the gas distribution system for 9 regions at a symbolic price of 1 USD. Since then, SOCAR has expanded its activities and now operates the gas distribution grids for all regions.
Socar Georgia Gas company, established in 2007 has expanded its activities and currently has more than 500,000 clients. SOCAR Georgia Gas company plans to invest more 250 mln USD by the end of 2017. SOCAR has been the biggest tax payer in Georgia since 2009 and its revenues from these projects reached 748 mln AZN in 2015.
Turkey
Turkey is SOCAR’s number one partner, becoming a shareholder of Turkish Petkim petrochemical complex in 2008 with an investment of 2.05 bln USD.
SOCAR also carries out STAR oil refinery with a value of 5.67 bln USD, Petlim port worth 400 mln USD and SOCAR Power worth 100 mln USD.
Socar also has several projects, related to Trans Anatolian gas pipeline (TANAP), expected to cost$9.3 bln USD and aimed at delivering 16bn m³/yr of the second stage of Azerbaijan’s “Shah Deniz” field’s gas to Turkey (6bn m³/yr) and the European Union. The final capacity of pipeline would be 31bn m³/yr. Deliveries gas to Turkey would start in 2018.
Currently Azerbaijan exports about 6bn m³/yr gas to Turkey from “Shah Deniz” stage 1. “Southern Gas Corridor” CJSC owns 58% share in TANAP (SOCAR’s share in the CJSC makes 49%). The STAR refinery with 10mn mt/yr capacity is projected to become operational by the first quarter of 2018, while the Petlim project is due to start next year.
Currently several companies, affiliated to SOCAR are active in various fields in Turkey from terminals to gas, oil products and power sectors. Last year, SOCAR’s revenues from Turkish projects reached 2.571 bln AZN, about 375 mln AZN or by 17.1% more than in 2014.
SOCAR also has a 25% stake in the Baku-Tbilisi-Ceyhan oil pipeline, of which 1,078 km are in Turkey (total length 1 768 km).
SOCAR plans to increase investments in Turkey to 18 bln USD by 2020.
Ukraine
SOCAR Energy Ukraine started its activities in 2008 and currently has 51 gas stations. SOCAR plans to double this figure in coming years. SOCAR LPG was set up in Ukraine to sell liquid petroleum gas.
Romania
SOCAR Petroleum was established in Romania in 2011 and currently has 35 gas stations.
The company plans to launch more 10 gas stations there in 2017 and increase this to 100 in coming years.
SOCAR Trading
One of SOCAR’s major markets is Switzerland, where it purchased 170 gas stations as well as two jet-fuel storage facilities from ExxonMobil for 340 mln USD in 2012.
The office of SOCAR Trading Company was inaugurated in Switzerland in 2008. The company sold 253 mln barrels of crude oil in 2015, of which 166 mln barrels were Azerbaijan’s own oil. It also sold 14mn barrels of oil products last year.
SOCAR Trading also opened an office in Canada this year. The company also plans to become involved in the LNG market by 2020.
SOCAR Trading also won a tender with a consortium including Germany’s Siemens to supply LNG and build a re-gasification facility for the island of Malta and build a gas-fired power plant costing 175 mln EUR.