BAKU, Azerbaijan, October 28. Production of Azerbaijan’s state oil company SOCAR is expected to grow by 4 percent in 2022 and 5 percent in 2023, mainly due to higher natural gas output, and will remain stable thereafter, Trend reports October 28 with reference to Fitch Ratings.
“SOCAR's oil and gas output increased by 7 percent to 282,000 barrels of oil equivalent per day in 2021 year-on-year with a broadly similar increase for gas and liquids. This comes on top of Azerbaijan's 1 percent increase in oil output and 23 percent higher gas production. Azerbaijan's oil production has historically decreased and we do not expect this to materially change. The higher gas output is mainly due to the start of production at Shah Deniz II field in 2018 with additional production areas subsequently added,” reads the latest Fitch report.
Fitch notes that most oil and gas projects in Azerbaijan operate under production-sharing agreements, in which SOCAR has a minority stake and where it also represents the state and is involved in marketing the latter's share of crude oil and gas (profit oil). “In addition, SOCAR has stakes in some other major energy projects promoted by the state, such as the Southern Gas Corridor (SGC).”
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