SOCAR Expands International Business
The State Oil Company of Azerbaijan Republic (SOCAR) plans to continue expanding abroad. The company has invested a total of $4.487 billion in overseas projects as of the beginning of the year.
SOCAR invested $3.334 billion in projects in Turkey, $414.5 million in Switzerland, $334.3 million in Georgia, $280.8 million in Ukraine, and $71.3 million in Romania.
Head of the Investment Department Vagif Aliyev reported that the company has diversified its revenues across various sectors:
"Despite oil prices, we can continue profitable business. By 2018, a number of projects in Turkey will be completed, and this will be a turning point for SOCAR's revenues."
Regarding the Socar Aurora Fujairah Terminal project, he noted that this project expanded the company's activities in remote markets. According to him, SOCAR earned 948 million manats ($532 million) from this project in 2015, which is 257 million manats or 37% more than the previous year's figure.
Socar Aurora Fujairah Terminal is a joint venture between SOCAR, Aurora Progress, and the authorities of Fujairah.
Georgia
Georgia became the first foreign market in which SOCAR invested. As of the end of 2015, SOCAR Georgia Petroleum imported 3.336 million tons of fuel and gasoline. The company owns 114 gas stations in Georgia, including 105 gas refueling stations, 8 CNG stations, and one LPG station.
In addition to the oil products sector, SOCAR is also involved in the natural gas sector in Georgia.
Officially, Tbilisi in 2007 requested Azerbaijan to export gas after Russia increased the gas price for Georgia from $180 to $320 per 1,000 cubic meters. Azerbaijan responded by supplying gas to Georgia at $150 per 1,000 cubic meters.
At that time, former Georgian President Mikheil Saakashvili transferred the gas distribution system of 9 regions to SOCAR for a symbolic price of $1. Since then, the company has expanded its activities and currently operates the gas distribution networks of all regions. SOCAR Georgia Gas, established in 2007, has 500,000 subscribers. SOCAR Georgia Gas plans to invest over $250 million by the end of 2017.
SOCAR has been the largest taxpayer in Georgia since 2009, and its revenues from projects in this country reached 748 million manats in 2015.
Turkey
Turkey is SOCAR's largest partner. In 2008, SOCAR became a shareholder of the Turkish petrochemical complex Petkim with investments of $2.05 billion. SOCAR is also implementing the STAR refinery project ($5.67 billion), Petlim port ($400 million), and SOCAR Power ($100 million). SOCAR also has several projects related to the Trans-Anatolian Natural Gas Pipeline (TANAP) project, valued at $9.3 billion, aimed at supplying 16 billion cubic meters of gas annually to Turkey (6 billion cubic meters) and Europe in the second phase of developing the Shah Deniz field. The final capacity of the pipeline will be 31 billion cubic meters. Gas supplies to Turkey will begin in 2018. Currently, Azerbaijan exports about 6 billion cubic meters of gas annually to this country under the "Shah Deniz-1" framework. JSC "Southern Gas Corridor" holds a 58% stake in TANAP (SOCAR's stake in JSC ā 49%). The STAR refinery with a capacity of 10 million tons/year will be commissioned in the first quarter of 2018, while Petlim will be fully operational next year.
Currently, several SOCAR subsidiaries are actively involved in Turkey's energy sector. Last year, SOCAR's revenues from projects in Turkey reached 2.571 billion manats, which is 375 million manats or 17.1% more than in 2014.
SOCAR also owns 25% of the shares of the Baku-Tbilisi-Ceyhan pipeline, 1,078 km of which run through Turkey (total length 1,768 km). The company plans to increase investments in Turkey to $18 billion by 2020.
Ukraine
SOCAR Energy Ukraine began its operations in 2008 and currently has 51 gas stations. The company plans to double this number in the coming years. In May of this year, SOCAR LPG was established to implement liquefied petroleum gas in Ukraine.
Romania
SOCAR Petroleum was founded in Romania in 2011 and currently has 35 gas stations. The company plans to open another 10 gas stations in 2017 and increase their number to 100 in the coming years.
Switzerland
One of SOCAR's main markets is Switzerland, where in 2012 it acquired 170 gas stations and two aviation fuel storage facilities from ExxonMobil for $340 million.
SOCAR Trading's office was opened in Switzerland in 2008. In 2015, the company sold 253 million barrels of crude oil, of which 166 million barrels were Azerbaijani oil. During this period, the company also sold 14 million barrels of petroleum products.
This year, SOCAR Trading opened its head office in Canada. The company intends to enter the LNG market by 2020. SOCAR Trading, in consortium with Siemens, won a tender in Germany for LNG supplies to Malta and the construction of a gas power plant worth ā¬175 million.
Source: oxu.az