Baku, Azerbaijan, June 13
By Emil Ismayilov - Trend:
SOCAR Trading establishment (structure of State Oil Company of Azerbaijan) made it possible to raise the profitability from crude oil export to international markets, according to the report of Boston Consulting Group (BCG) dedicated to the activity of SOCAR Trading in 2008-2013.
After SOCAR Trading's establishment, average increase in price sale for export has been around 1.7 USD/bbl and leading to an increase in annual income of around $360 mln. since 2009, according to the report. Thus, since 2009 SOCAR Trading has made it possible for the state to get additional $1.8 billion of revenues.
SOCAR Trading is an active and flexible system for crude oil export and adapting for short-term market possibilities/errors on oil markets rather than systems of realization that existed before.
During Libyan crisis in 2011 SOCAR Trading realized additional possibilities that could have been used by foreign traders if State Oil Company of Azerbaijan continued oil selling by tender sales, according to the report.
Since 2010 SOCAR Trading annually gets about 70 million barrels of oil of Turkmenistan, Kazakhstan, Russia and other origins and then sells them in the market, according to the report.
"Obtaining of additional revenues was the result of clear policy," according to the report.
"Especially, selling crude oil of other companies helped SOCAR to better understand the market of oil and the producer-user balance of crude oil similar to Azeri Light by quality. Moreover, direct marketing allows us to sell oil on high prices that are affordable for certain refiners and to understand the price for alternative light oil for Azeri Light clients. At last, by sending goods to Asia-Pacific region, SOCAR Trading reduces excesses of light oil in the Mediterranean market, thus safeguarding the price for Azeri Light."
"The key moment is the creation of active management of Azeri oil sales by SOCAR Trading with direct delivery to end users," according to the report. "This affects active development of ties with profitable clients basing on knowledge of market and on optimal assessment of time frame for selling oil based on oil refining needs. Finally, such important components like demand and supply management and Azeri Light's positioning as high quality light oil in region were achieved."
SOCAR Trading's activity was organized very effectively compared to many similar companies in the world. During Libyan crisis, a possibility for additional cost was achieved, BCG report says.
In the context of business organization BCG underlines that SOCAR chose the most effective way for creating additional possibilities. The report especially underlines the creation of joint enterprises with experienced traders.
"Today, SOCAR Trading is a well-organized company respected by rivals in oil trading sector," according to the report. The company positions the growth of trade business, thus strengthening commercial activity of the main company."
SOCAR Trading with headquarters in Geneva was created at the end of 2007 by the State Oil Company of Azerbaijan (SOCAR) with co-founding of Valery Golovushkin (founder of Lukoil Trading in Geneva) and Anar Aliyev (successful businessman who has proved himself in the oil industry).
SOCAR Trading sells the main part of crude export volumes from the Ceyhan port (The Mediterranean Sea, Turkey), carries out trading of oil and oil products of other countries, and also renders assistance to the parent company with the international investments. The field of activity of SOCAR Trading covers the countries of Europe, Asia and America. The company has representative offices in the USA, Turkey, the United Arab Emirates, Egypt, Singapore and in other countries.
edited by CN