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State Oil Company of Azerbaijan Republic (SOCAR)
Type State-owned
Industry Oil and gas
Founded September 13, 1992 (1992-09-13)
Headquarters Baku, Azerbaijan
Key people Rovnag Abdullayev (President)
Products Petroleum
Natural gas
Services Transportation
Revenue Increase AZN 38.43 billion (2013)[1]
Operating income Increase AZN 1.65 billion (2013)[1]
Net income Increase AZN 0.98 billion (2013)[1]
Total assets Increase AZN 23.05 billion (2013)[1]
Total equity Increase AZN 10.23 billion (2013)[1]
Owners Azerbaijani Government
Employees est. 61,088 (2014)[2]

The State Oil Company of Azerbaijan Republic (SOCAR) (Azerbaijani: Azərbaycan Respublikası Dövlət Neft Şirkəti) is a wholly state-owned national oil company headquartered in Baku, Azerbaijan. It is one of the largest O&G corporations in the world. The company is involved in production of oil and natural gas from both onshore and offshore fields in the Azerbaijani section of the Caspian Sea. In addition, it operates the country's two oil refineries, one gas processing plant and runs several oil and gas export pipelines throughout the country. It has a number of fuel filling stations under the SOCAR brand in Azerbaijan, Georgia, Ukraine, Romania and Switzerland. The company has about 61,000 employees.


In 13 September 1992 president Abulfaz Elchibey[3] decreed the creation of the State Oil Company of Azerbaijan Republic by Decree 200 of President of Azerbaijan Republic by merger of Azerbaijan's two state oil companies, Azerneft and Azneftkimiya.[4] Azerneft was created after the Bolshevik Revolution through the nationalization of the Azerbaijani oil industry. During the Soviet period, Azerneft was incorporated into the new Azerbaijan Oil Industry Ministry (1954–1959) and went through several reorganizations and re-namings. In August 1970, it was renamed back to Azerneft. According to the Presidential Decree No. 50, the company was restructured and several entities within the organization were established to improve management of exploration and production activities in Azerbaijan.[5] On 24 January 2003, another set of organizational restructuring as per Presidential Decree No. 844:

  • merged offshore and onshore gas production units establishing Azneft production unit;
  • merged the Foreign Economic Ties Department with 'Azernefttejhizat' unit forming the Marketing and Economic Operations Department;
  • established the Oil Lines Department on the basis of main oil lines production unit;
  • established Baku Deep Water Jacket Plant on the basis of 'Shelflayihetikinti' production unit;
  • established Azerneftyagh oil refinery on the basis of Azerneftyagh production unit;
  • established Azerneftyanajag oil refinery on the basis of Azerneftyanajag production unit;
  • announced IPO for Khezerdenizgazmatikinti, Khezerdenizneftsosialtikinti units and auto transport bureau of SOCAR.[4]


In January 2006, the former head of the Baku Oil Refinery and a member of the Azerbaijani parliament, Rovnag Abdullayev, was appointed President of SOCAR. He replaced Natig Aliyev, who had been named Azerbaijan's Minister of Industry and Energy. Ten Vice Presidents directly report to Rovnag Abdullayev each as a head of different functions.


Upstream operations[edit]

SOCAR's activities are exploration, preparation, exploitation of onshore and offshore oil and gas fields in the Azerbaijan Republic, transportation, processing, refining and sale of oil, gas, condensate and other related products.[4] SOCAR's exploration activities cover the prospective offshore fields in the Azerbaijani sector of the Caspian Sea. The current largest fields being explored are Shafag-Asiman and Absheron natural gas fields which are being explored together with BP and Total respectively. Moreover, SOCAR held exploration activities in Umid gas-condensate field and Bulla Deniz field on its own.

Azerbaijan has 57 oil fields, 18 of which are offshore, in the Azerbaijani sector of the Caspian Sea. The essential part of the company's revenue comes from the giant ACG oil field complex and Shah Deniz gas field. In September 1994, SOCAR entered into a Production sharing agreement (PSA) with the foreign oil companies led by BP for the 30-year development of the ACG oil field which was later known as the Contract of the Century. Two years later Shah Deniz PSA was signed. As of 2014 SOCAR holds 11.6% of the ACG shares and 16.7% of the Shah Deniz shares.[6] Moreover, SOCAR operates a number of onshore fields on its own which is the main source of the domestic supply. In 2013, 43.48 million tons (318.74 mmbbl) of oil was produced in Azerbaijan, of which 8.31 million tons (60.95 mmbbl) belong to SOCAR. In the same period, Azerbaijan's natural gas production reached record high of 29.46 bcm of which SOCAR shares constitute 7.14 bcm of it.[7][8]

Pipeline operations[edit]

SOCAR has a share in two parallel-running major export pipelines of the country; Baku-Tbilisi-Ceyhan pipeline (BTC) and South Caucasus Pipeline (SCP).[9] The pipelines deliver the ACG and Shah Deniz hydrocarbons from Sangachal Terminal located in 45 km south of Baku to Turkey and Europe. They pass through the borders of three countries: Azerbaijan, Georgia and Turkey. The share of SOCAR in the BTC and SCP is 25% and 16.7% respectively.[10] In addition, SOCAR is the major shareholder with 70% ownership in the Trans-Anatolian gas pipeline (TANAP) and with 20% ownership in Trans Adriatic Pipeline (TAP) which are meant to transmit some 16 bcm/y of gas produced from the second phase of Shah Deniz gas field with 10 bcm/y of that going to Europe and 6 bcm/y to Turkey.[11][12] The TAP is seen as a competitor to Russia's South Stream because of diversification of gas supplies to Europe.

The company also has stakes in the relatively low-capacity Baku-Supsa Pipeline and Baku-Novorossiysk Pipeline. The Azerbaijani part of the Baku-Novorossiysk Pipeline is operated by SOCAR, whereas Baku-Supsa Pipeline's operator is BP.

Refining operations[edit]

SOCAR has two oil refineries and one gas processing plant. Azerneftyagh Oil Refinery specializes in the production of fuels and oils. The refinery produces gasoline, kerosene and diesel distillates, various oils (industrial, motor, transformer etc.) and asphalt. All fuel distillates produced there are sent to Heydar Aliyev Baku Oil Refinery for redistillation. The refinery processes 21 out of 24 grades of the Azerbaijani crude. It meets the country's entire demand for petroleum products and 45% of its petroleum products are exported. The Gas Processing Plant produces processed gas, liquefied gas and natural gasoline. In 2010, the plant produced 4 bcm of processed gas, 24,800 tons of liquefied gas and 26,700 tons of natural gasoline.[13]

Retail station operations[edit]

The first fuel station of the company under the brand name SOCAR was opened in neighboring Georgia in 2008, that was even earlier than it was in its home country. The fuel stations in Georgia are operated by the subsidiary of the company SOCAR Georgia Petroleum. As of 2014 there are currently more than 110 filling stations in Georgia making it the largest retail fuel station network of SOCAR.[14] Another subsidiary - SOCAR Petroleum was established in 2008 for the purpose of managing the purchase and sale of petroleum products in Azerbaijan. It operates a few (less than any other country where it operates)[15] filling stations in Azerbaijan under the brand name SOCAR since 2010. After the first fuel filling station in Ukraine was opened in 2011, the number of the SOCAR stations in Ukraine reached 40 by the opening of a new filling station in October 2014.[16]

In 2011, the company entered into the Romanian market acquiring initially 90% and at a later stage the rest 10% of the stake in Romtranspetrol.[17] In September 2014, SOCAR launched its 30th filling station in Romania.[18] In November 2011, SOCAR bought ExxonMobil's Swiss subsidiary Esso Schweiz for an undisclosed amount. Along with the acquisition SOCAR became the owner of a network of more than 160 filling stations operating under the brand name Esso across the country.[19] The first SOCAR premium fueling station in Switzerland after the rebranding was opened in September 2012 in Zurich. All the operations in Switzerland are managed and led by SOCAR Energy Switzerland.

Other operations[edit]

SOCAR's subsidiary SOCAR Energy Georgia is engaged in retail and wholesale of fuel, import of petroleum and LNG, construction of oil terminals and warehouses. The company holds 72% and 61% of petroleum and diesel markets, respectively. SOCAR Energy Georgia, Ltd. also owns the Kulevi oil terminal.[20] SOCAR supplies Georgia with 20,000 tonnes of oil products a month, including 15,000 tonnes of gasoline. The company has so far invested $400 million in Georgian economy[21] and was reportedly Georgia's biggest taxpayer in 2009. SOCAR paid 162 million Georgian lari ($1 = 1.70 Lari) in tax in 2009. The company was the biggest taxpayer three times in a row.[22]


SOCAR Head Office on Azneft Square in downtown Baku, named after historical "Azneft" ("AzOil") trust

Currently SOCAR's head office is located at a three-story building constructed in the French renaissance style, facing the Azneft Square in downtown Baku.[23] Apart from the head office, SOCAR's supporting offices are dispersed across the city. A new office building - SOCAR Tower is under construction since 2010 which will gather all staff under one roof and be used as a headquarter of the company. It is going to be the tallest skyscraper in the whole Caucasus. The construction is scheduled to be completed by the end of 2014.

The representative offices of SOCAR are located in London, Frankfurt am Main, Geneva, Vienna, Bucharest, Istanbul, Kyiv, Tbilisi, Astana and Tehran.[24][25][26] In Romania, SOCAR considers building a petrochemical refinery complex to supply European countries with oil products. [27] The first representative office of SOCAR was established in the United Kingdom in 1994. SOCAR office in UK is the main point of contact for British companies and financial institutes willing to work in the energy sector of Azerbaijan. SOCAR UK played crucial role in establishment of partnership between Heriot-Watt University and Baku Higher Oil School (BHOS) of SOCAR. SOCAR UK also helped in establishment of Baku International Education Centre (BIEC). Austrian and German offices of SOCAR promote transportation of Azerbaijani hydrocarbons from Azerbaijan to Europe.[28] Swiss office is represented by subsidiary of SOCAR located in Geneva, SOCAR Trading SA which started its operations in 2008 is handling marketing of the Azerbaijani oil in Europe. Capital stock of the company is 5 million Swiss francs[29]


Lack of transparency[edit]

The 2013 report by UK-based Global Witness NGO revealed that companies working in Azerbaijan’s oil industry have no transparency and accountability. It has been documented that millions of dollars of revenue disappear into the hands of obscurely owned private companies that cooperate with SOCAR. The example of one person - Anar Aliyev examined by Global Witness demonstrated a clear pattern. Anar Aliyev owns stakes in at least 48 deals with SOCAR, with his profits amounting to US$375 million over five years, while no information could be obtained about him.[30][31]

The report by Global Witness concludes that the opacity of the deals struck by Socar "is systemic" and adds, “These findings should be of great concern to the international community as a whole. Oil and its derivative products are central to the Azerbaijani economy, making up 95% of exports in 2011. It is important for Europe that Azerbaijan keeps the oil and gas flowing and maintains a transparent and well-run energy industry. Yet this briefing shows that much of the oil business in Azerbaijan remains opaque, and corruption is still perceived to be at epidemic levels…"[31][32]

Azerbaijani journalist Khadija Ismayilova, who has been investigating the Aliyev deals, says that it raises widespread public concern in Azerbaijan that the state oil sector - which is directly controlled by loyalists of the ruling party - is being deliberately drained of part of its revenues for the benefit of powerful, but unidentified, parties.[30]

According to the statements of SOCAR, the information set out in Global Witness report is not true and contrary to the facts.

Environmental record[edit]


SOCAR is the sponsor of Association of Football Federations of Azerbaijan and Azerbaijani football club Neftchi Baku.

In May 2013, UEFA announced that SOCAR is an Official Sponsor of the 2016 UEFA European Football Championship final tournament, and acquires rights in connection with the European Qualifiers, which run from 2014 to 2017, and which relate to the qualification matches for UEFA Euro 2016 and the 2018 FIFA World Cup. SOCAR also becomes an Official Sponsor of the 2016 UEFA European Under-17 Football Championship, which will take place in Azerbaijan.[33]

In September 2014, SOCAR signed an agreement to become an Official Partner of Baku 2015 European Games[34]


  1. ^ a b c d e "SOCAR, Consolidated Financial Statements (IFRS), 31 December 2013". SOCAR. Retrieved 13 October 2014. 
  2. ^ 2013 SOCAR Sustainable Development Report, Access date: 15 October 2014
  3. ^ Svante E Cornell: Azerbaijan Since Independence: In September 1992, President Elçibey decreed the creation of the State Oil Company of the Azerbaijan Republic known as SOCAR - Page 218
  4. ^ a b c Azerbaijan portal
  5. ^ SOCAR website. About the company
  6. ^ SOCAR Activities, Production, Azeri Chirag Deep Water Gunashli
  7. ^ SOCAR Economics and Statistics, Oil production, access date: 15 October 2014
  8. ^ SOCAR Economics and Statistics, Gas production, access date: 15 October 2014
  9. ^ "Resource Directory". Azerbaijan International. Retrieved 2010-01-13. 
  10. ^ EBRD. SOCAR - South Caucasus Gas Pipeline Project Summary Info
  11. ^ Total and Statoil pull out of Tanap gas pipe deal,, By Guy Chazan in London and Daniel Dombey in Istanbul, 16 December 2013, access date: 19 October 2014
  12. ^ Germany and France withdraw from Trans Adriatic Pipeline AG,, 1 October 2014, access date: 19 October 2014
  13. ^ SOCAR Activities, Refining, Gas Processing Plant
  14. ^ SOCAR opens more filling stations in Georgia, Romania
  15. ^ Number of SOCAR petrol stations in Romania exceeds company’s filling station net in Azerbaijan
  16. ^ SOCAR's filling stations in Ukraine reach 40,, 15 October 2014
  17. ^ SOCAR expands its gas station network and plans new investments
  18. ^ SOCAR opens its 30th filling station in Romania, SOCAR News archive, 17 September 2014, access date: 21 October 2014
  19. ^ SOCAR acquires Esso Schweiz from ExxonMobil
  20. ^ SOCAR Georgia. Company Overview
  21. ^ "State oil company of Azerbaijan already numbers 23 filling stations under SOCAR brand in Georgia and builds new ones". 2009-04-21. Retrieved 2010-10-09. 
  22. ^ "Azerbaijan state oil company becomes Georgia’s biggest taxpayer in 2009". 2010-01-27. Retrieved 2010-01-27. 
  23. ^ Directory. SOCAR
  24. ^ SOCAR Representative offices
  25. ^ Isabel Gorst (2008-01-24). "State Oil Company: Burning ambition to compete on global stage". Financial Times. Retrieved 2010-01-13. 
  26. ^ "SOCAR office in Romania officially inaugurated". Romania News Watch. 2007-07-13. Retrieved 2010-01-13. 
  27. ^ "SOCAR Prepares Special Energy Strategy for Work in Europe". The Azeri Times. 2009-05-22. Retrieved 2010-01-13. 
  28. ^ "Germany is interested to carry energy resources from Azerbaijan to Europe". 2006-08-25. Retrieved 2010-01-14. 
  29. ^ "Маркетингом азербайджанской нефти займется SOCAR Trading SA" [Marketing of the Azerbaijani oil is to be done by SOCAR Trading SA] (in Russian). Regnum. 2008-02-21. Retrieved 2010-01-05. 
  30. ^ a b New Report Highlights Lack Of Transparency In Azerbaijan's Oil Industry. RFE/RL Dec. 10, 2013
  31. ^ a b Azerbaijan Anonymous Global Witness 2013
  32. ^ Azerbaijan Anonymous Global Witness
  33. ^ SOCAR signs as Official Sponsor for UEFA national team competitions
  34. ^ Baku 2015 European Games Signs SOCAR As Official Partner

External links[edit]