Restructuring at the State Oil Company of Azerbaijan

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On July 19, despite the holiday, President of Azerbaijan Ilham Aliyev signed orders on dismissal of anumber of high-ranking employees of SOCAR (State Oil Company of Azerbaijan) from their posts.

According to documents published on the website of the head of state, Vice President of SOCAR Mikail Ismayilov, Vice President for Geology and Geophysics Bahram Huseynov, Vice President for Refining Davud Mammadov and Vice President for Strategic Development Tofig Gahramanov have been dismissed. 

The Administration of the President of the Republic of Azerbaijan did not consider it necessary to explain to the public what is happening in the State Oil Company, which is the locomotive of the domestic economy. 

SOCAR also did not comment on the release of its high-ranking officials, as it believes that the appointment and dismissal of vice presidents is the legal right of the head of state.

Talks changes in the structures of SOCAR began in November 5 last year. Then, by Presidential Decree, the State Oil Company of Azerbaijan was included in the list of state-owned enterprises, which were to be transferred to the management of the newly created structure – Azerbaijan Investment Holding (07.08.2020).

On January 23, 2021, the head of state issued a new Decree on the activities of SOCAR – the Supervisory Board was created. In addition, then the President demanded that the AIH within six months prepare and submit for approval a new structure of the State Oil Company, according to which SOCAR could move forward in the coming years, increasing profitability, not particularly hoping for financial assistance from the state. 

An interesting fact is that the head of the AIH Ruslan Alihanov (aspecialist invited from abroad) during this time showed himself to be a “secret keeper”: he did not enter the media on this matter, avoided comments, and in general, almost no one knew “what meal was preparing in the kitchen”. That is, the statemanaged to prevent leaks of any information about the updated SOCAR.

In the Decree of the head of state, published on May 8 of this year, the roles and tasks in the management of SOCAR of the Supervisory Board (headed by the Minister of Economy of the country), AIH, as well as the President of SOCAR were determined. The latter’s powers were severely limited.

In all likelihood, the AIH has already presented its recommendations to the head of state. The Presidential Decree of July 19 is related to the implementation of the new structure of SOCAR. 

That is why we have not seen another Decree of the head of state on new appointments. Most likely, Ilham Aliyev himself will announce the restructuring in SOCAR at a government meeting dedicated to the economic results of January-June 2021, the holding of which is delayed for the first time (usually this meeting is held around the 10th). After that, the new structure of SOCAR will be approved and then new high-ranking leaders will be appointed.

* SOCAR was formed on September 13, 1992. The first large-scale renovations at the State Oil Company began in August 1993. The second time this process began in December 2005. The current restructuring at the State Oil Company is considered fundamental. 

Caspian Barrel