Socar and Statoil - Similarities

The role of national oil companies as engines of economic development for their countries could be enormous. An example of Statoil for national development of Norway could better demonstrate this.

Norway , having today one of the highest living standards in the world, was the European country with relatively modest economic indicators in the 60s and early 70s of the 20th century. The turning point not only for Norway, but also for whole Europe (today Statoil is the second largest supplier of natural gas to European markets) was the beginning of the development of the Norwegian continental shelf. Established in 1972, in late 70s the company gained its first share of 44 percent in the development of the largest offshore Statford field. This can be considered the beginning of the success of Statoil. Beginning of the success of SOCAR (State Oil Company of Azerbaijan Republic) and all the new oil strategy of Azerbaijan can be considered the signing of the Contract of the Century signed in 1994 for the design and development of Azeri-Chirag-Gunashli fields in Azerbaijani sector of the Caspian Sea, where SOCAR has a share of 10 percent.

The Norwegian government has a crucial role in the management of hydrocarbon resources of the Norwegian continental shelf, it approves projects for exploration and development of oil and gas fields, contracts for the sale of gas. Azerbaijani Parliament also ratifies all PSAs (production sharing agreement) to ensure foreign companies that their investments and future revenues are protected by the state. The functions of the SOCAR, like Statoil, also include managing the state share (the share of profit oil now accounts for 80 percent) of all revenues in the projects of development of hydrocarbon resources.

In 1990 the Norwegian government established the National Oil Fund. Norwegians decided not to use oil revenues, but to create a financial safety cushion and protect the country from possible economic shocks, and at the same time, to use these reserves for the equitable distribution of wealth for future generations. Today, the Fund has accumulated about $537 billion. The State Oil Fund of Azerbaijan (SOFAR) was established in 1999, and at that time, its assets amounted to $271 million. Under the provision of SOFAR, the main objectives of the State Oil Fund are: the accumulation of funds and placement of Fund's assets abroad in order to minimize the negative impact on the economy, provide savings for future generations and maintain current socio-economic processes in Azerbaijan. As of April 1, 2011, SOFAZ assets totaled $25.796 billion.

It is possible to make a whole series of analogies between the two companies, for example, in the conquest of markets for retail sales. As of December 31, 2010, Statoil has 2,283 petrol stations in eight countries, of which 1,765 are located in Scandinavia, and 518 - in Poland, Latvia, Lithuania, Estonia and Russia. SOCAR has also begun from neighboring countries. Today the company has 69 petrol stations in Georgia, 20 in Ukraine, and intends to enter the market of retail sales of petroleum products in Romania this year, realizing a pilot project on re-branding 16 petrol stations.

Statoil has South Riding Point oil terminal in the Bahamas for access to North American markets. SOCAR, through its subsidiary Socar Trading, is building a terminal in the Fujairah Port (UAE) for trade in the Persian Gulf region. It includes 20 reservoirs and has the capacity for handling gasoline, naphtha, middle distillates and other petroleum products.

Now placing its assets abroad, SOCAR diversifies its investment portfolio in the long-term period and actually reduces the direct dependence on income from oil exports (currently oil and oil products from Azerbaijan are exported to 30 countries, including USA, China, Thailand, Brazil and others).

The international assets of SOCAR include an oil terminal in Kulevi (Georgia), management of thirty gas distribution networks in the regions of Georgia. In 2011, the company intends to commission 25 new petrol stations in Georgia under its own brend.

The company has plans to acquire 90% shares in the İGDAŞ Company, which owns the gas distribution network of Istanbul. Earlier, the SOCAR-TURCAS Joint Petrochemical Company got a license for wholesale of gas in the domestic market of Turkey for a period of 30 years. SOCAR-TURCAS is the biggest asset of SOCAR and Azerbaijan outside the country, with equity participation (51%) in the largest Turkish petrochemical complex Petkim.

SOCAR (State Oil Company of Azerbaijan) will invest $ 17 billion in Turkey over seven years, said sales and marketing director of Petkim Sakit Samedov.

Also in 2010, SOCAR/TURCAS Rafineri AS received a license from the regulator of the energy market of Turkey for the construction of a refinery with a capacity of 10 million tons per year. Refinery will cover the needs of the Petkim for gasoline, and produced at the refinery, the diesel and kerosene will be sold in the markets of Turkey and Europe. There are also projects to acquire assets in Russia and Kazakhstan.

SOCAR, as Statoil, is a fully integrated company, carrying out the entire cycle of works with oil and gas: exploration and production, refining, transportation and sale. Today SOCAR has 11 overseas offices in Europe, Asia and America. According to the leading rating agencies, since 2009, it has ranked amongst the 50 largest oil companies in the world. A few days ago, Fitch Ratings has affirmed State Oil Company of the Azerbaijan Republic's (SOCAR) Long-term foreign currency Issuer Default Rating (IDR) at 'BBB-' and Short-term foreign currency IDR at 'F3'. The Outlook for the Long-term IDR is Stable.

If at an early stage the development of SOCAR was legitimate to the question whether the company will remain a simple executor of the will of the state in oil and gas sector and end its existence in a time when the hydrocarbon reserves in Azerbaijan will come to an end, but now, apparently, this question has removed from the agenda. SOCAR has not remained only a tool in the hands of the state to receive revenues from oil and gas, but develops itself as a company, as a business structure, ability to conduct business at the proper level and enter the international markets, which in its time has made the Norwegian Statoil.

Oil tanker hit by blast at Saudi terminal, Saudi Arabia confirms
Oil tanker hit by blast at Saudi terminal, Saudi Arabia confirms
Oil shrugs off U.S. inventory gain helped by vaccine hopes
Oil shrugs off U.S. inventory gain helped by vaccine hopes
As winter approaches, Egypt braces for second coronavirus wave
As winter approaches, Egypt braces for second coronavirus wave
Loading Bars
Latest
Armenian acts of terrorism on previously occupied territories of Azerbaijan must be condemned by European countries - US expert
Georgia reveals profit of microfinance sector
South Korea, China top diplomats vow to work on North Korea, COVID-19
Turkey mulls new support measures for businesses hit by COVID-19
Tehran-Najaf flights resumed
Kazakhstan detects 820 new coronavirus cases in 24 hrs
Incumbent MP Sopio Kiladze elected member of UN Committee on the Rights of the Child
Canada police supervisor denies effort to deceive Huawei CFO about indictment
Georgia E-Space to create synergy of solar power plant and electric car charging infrastructure
Amazon workers in Germany to go on strike on 'Black Friday'
Kazakhstan's KazMunayGas forecasts annual oil output decrease
More migrants relocated from Malta to EU countries
U.S. grants ByteDance new seven-day extension of TikTok sale order
82 bandits killed in Nigerian airstrikes
China, Kyrgyzstan to boost pragmatic cooperation
AzerGold CJSC talks plans for extraction of precious metals
Kazakhstan’s Almaty Power Stations JSC opens tender to buy compressors
Volume of funds allocated to fixed capital increases in Azerbaijan’s Nakhchivan
Retail trade turnover of Azerbaijan’s Nakhchivan Autonomous Republic drops
Azerbaijani MoD unveils footage depicting advancement of Azerbaijani armyuits to liberated Kalbajar region (VIDEO/PHOTO)
Resolution of France's Senate nothing more than piece of paper for Azerbaijan - top official
Resolution adopted by France's Senate has no legal force - MFA
IKEA investment arm in talks to buy city-centre retail property in big European cities
Kazinform and IRNA news agencies hold joint online conference
China increases import of Turkish cars
Iran to compensate for Ukraine plane crash according to int'l norms
Oil tanker hit by blast at Saudi terminal, Saudi Arabia confirms
National Bank of Georgia sells funds at foreign exchange auction to stabilize lari
First Turkish Trade House to open in Azerbaijan
Azerbaijani president signs law renaming Tsakuri village in Khojavend district
Azerbaijani president signs law renaming Gushchubaba village of Khojaly district into Baharli village
Azerbaijan to monitor fields in Kalbajar - Head of National Geological Exploration Service (Exclusive)
EU allocates macro-financial assistance to Georgia to tackle COVID-19
Turkmen FM gives speech at 13th Central Asia-Korea Cooperation Forum
Turkmenistan advocates cooperation in resolving regional and global environmental problems
Azerbaijan confirms 1,229 more COVID-19 recoveries
Iranian Energy Exchange announces products to be on sale November 28
Austria provides Uzbekistan with railway equipment
U.S. weekly jobless claims increase again
Produce in Georgia agency selects business ideas for micro and small entrepreneurship grant program
Kazakhstan eyes to fully put up produced LPG on electronic trading platforms in 2021
Uzbekistan’s food production to grow by end of 2020
Fergana region becomes main textile producer in Uzbekistan
More countries allow import of Uzbek-grown products
Volume of lending in Azerbaijan’s Nakhchivan in annual circulation greatly increases
Lari depreciation among possible reasons for fuel price increase in Georgia
Azerbaijan prepares projects to restore road infrastructure in liberated territories
Production of Iran’s Sefid Dasht Steel Company increases
Kazakhstan's Kuryk port boosts cargo handling, launches direct link to Iran
Turkmenistan has sufficient reserves to mitigate effects of pandemic - IMF
Volume of cargo transportation of Azerbaijan’s Nakhchivan Autonomous Republic drops
Kazakhstan to localize production of German agricultural machinery's popular models
Iran’s Bahar Azadi gold coin price continues to fall
Georgian-produced ski equipment to be exported to Europe
Kazakhstan decreases exports to Italy year-on-year
Volume of goods released from Iran’s customs checkpoints announced
Turkmengas opens tender for purchase of instrumentation
Investments in Iran’s Kerman Province increase
Azerbaijani refugees from Kalbajar visit Martyrs Alley (PHOTO)
FM talks on possible Azerbaijan-Armenia peace treaty to French Le Point
Azerbaijan shows new footage of Azerbaijani army units entering Kalbajar (PHOTO/VIDEO)
Armenia must answer for war crimes - Azerbaijani FM
Iran’s South Pars Gas Company opens tender to buy equipment
Uzbekistan eyes to maintain macroeconomic stability in 2021
Volume of loans issued by commercial banks down in Georgia
Cable TV operators ready for full deployment in liberated Azerbaijani territories
Activities of private sector in Iran can put end to economic problems - analyst
Georgia increases export of precious metal ores and concentrates
During Karabakh hostilities, Turkey responded to political pressure exerted on Azerbaijan - ambassador
Oil shrugs off U.S. inventory gain helped by vaccine hopes
Total volume of non-bank deposits in Georgian banking sector down
Return of Kalbajar region to Azerbaijan has not only important political but also economic significance - Georgian expert
Number of bank accounts registered in Nakhchivan over 10M2020 unveiled
Azerbaijan's gold company reveals profits
Two facilities in Iran’s oil sector to be put into operation
Baku residents hold rally celebrating Kalbajar's liberation (PHOTOS)
Georgia reveals data on persimmons and caraway seeds exports
Turkmenistan’s growth model relies on large-scale public investments - IMF
Four dead as migrant boat capsizes off Canary Islands, more missing
Kazakhstan’s joining UPOV could help improve lives, provide for economic dev't
SOCAR reveals volume of transshipment through Kulevi terminal
First VP Mehriban Aliyeva congratulates Azerbaijani people on liberation of Kalbajar (PHOTO)
Cargo handling at Kazakhstan's Aktau seaport decreases over 10M2020
Foreign trade turnover of Azerbaijan’s Nakhchivan Autonomous Republic increases
Iran reveals its COVID-19 data for November 25
Life insurance in Azerbaijan occupies about half of all insurance fees - association
SOCAR and LUKOIL eye expanding co-op
Baku Stock Exchange hosts auction for CBA's short-term notes
Concerns of some OSCE MG co-chairing countries don't matter - Erdogan
Kazakhstan boosts passenger cars manufacturing within 10M2020
Turkmen IT company to create first online platform of Union of Industrialists, Entrepreneurs
Azerbaijan to export medical masks to Russia and Germany
UNESCO to take part in protection of cultural, religious heritage in Karabakh
Iran says ready to return to Jan 20, 2017
Iran talks banking obstacles
Azerbaijan disclose data on investments in local renewable energy projects
Iran prevented release of German home appliances from customs
Kazakhstan’s oil producing company opens tender to buy spare equipment parts
Turkmen company provides domestic market with products made of polyethylene
Production of agricultural products increases in Azerbaijan’s Nakhchivan Autonomous Republic
All news