Baku, Azerbaijan, Dec. 14
By Azad Hasanli – Trend:
Standard & Poor’s (S&P) Global Ratings affirmed its ‘BB’ corporate credit rating on the State Oil Company of Azerbaijan Republic (SOCAR).
The outlook remains negative, said the S&P Dec. 14.
SOCAR has a critical role in Azerbaijan’s most strategic energy sector, and the company is one of the country’s largest taxpayers and employers, according to S&P experts.
According to S&P, SOCAR needs big capital investments for several projects, including the expansion of the country’s Shah Deniz gas field, construction of pipelines in order to bring new gas volumes to the markets of Turkey and Southern Europe, as well as investments in Turkey.
“Historically, the government has provided equity financing and loans from state-owned banks to SOCAR. We expect the government will continue ongoing support for SOCAR’s capex, notably on Shah Deniz-2, which is strategic for the country,” said the S&P.
A contract for development of the Shah Deniz offshore field was signed on June 4, 1996.
The field’s reserve is estimated at 1.2 trillion cubic meters of gas.
As part of the Shah Deniz-2, annual gas output will reach 16 billion cubic meters. The second phase of Shah Deniz field’s development is estimated to cost $25 billion. As part of the project, the first gas is planned to be obtained in 2018 that will be the main source for the Southern Gas Corridor.
Gas will be exported to Turkey and European markets through the expansion of the South Caucasus Pipeline and construction of the Trans Anatolian Natural Gas Pipeline (TANAP) and Trans Adriatic Pipeline (TAP).