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State Oil Company of Azerbaijan Republic (SOCAR)
Type State-owned
Industry Oil and gas
Founded 1992 (1992)
Headquarters Baku, Azerbaijan
Key people Rovnag Abdullayev (President)
Products Natural gas
Revenue IncreaseUS$ 10.426 billion
Operating income IncreaseUS$ 1.978 billion
Net income Increase US$ 894.880 million (2011)[1]
Total assets IncreaseUS$ 21.743 billion
Total equity IncreaseUS$ 11.857 billion
Employees est. 66,400 (2013)

The State Oil Company of Azerbaijan Republic (SOCAR) (Azerbaijani: Azərbaycan Respublikası Dövlət Neft Şirkəti) is the state-owned oil and natural gas corporation of Azerbaijan. It produces oil and natural gas, operates the country's two oil refineries and the running of oil and gas pipelines throughout the country. SOCAR oversees the international consortia that is developing new oil and gas projects in Azerbaijan.[2] SOCAR is worth $20 billion.[3] It has several fuel filling stations under the SOCAR brand in Georgia, Ukraine, Romania and Switzerland.


SOCAR was established on 13 September 1992, 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 1994, SOCAR signed the "Contract of the Century" for the production of oil in the Caspian Sea.


SOCAR's activities are exploration, preparation, exploitation of onshore and offshore oil and gas fields in Azerbaijan Republic, transportation, processing, refining and sale of oil, gas, condensate and other related products.[4] It employs between 59,000 and 70,000 people.[5][6][7] Azerbaijan has 57 oil fields in Azerbaijan, 18 of which are offshore, in Azerbaijani sector of the Caspian Sea. According to the Energy Information Administration of the U.S. Department of Energy, as of December 2007, SOCAR has signed 14 offshore and 10 onshore production sharing agreements (PSA) with foreign private corporations.[8] In 2006, SOCAR's production was at about 7.84 million tonnes of oil and 4.34 billion cubic meters of gas.[3] As of January 2009, oil refineries managed by SOCAR have a refining capacity of 339,000 barrels a day.[2]

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.[9][10]

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…"[10][11]

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.[9]


The International Bank of Azerbaijan is SOCAR’s major source of financing. In 2011, total liabilities of SOCAR to IBA amounted to 680 million manat.[12]

In 2011, SOCAR made:[12]

  • 55 million manat in short-term borrowings
  • 625 million manat in long-term loans

Recent loan history from IBA includes the following:[12]

  • May 2008 - 530.6 million manat.
  • Jan. 2009 - 6.5 million manat.
  • July 21, 2009 – 750 million manat
  • July 27, 2009 – 337 million manat


Since 1994, SOCAR has signed 28 production sharing agreements (PSA). The first agreement was signed to develop Azeri-Chirag-Guneshli fields beginning on 20 September 1994, and the latest agreement was signed in 2009 for exploration of Bahar and Gum Deniz offshore oil fields.[13] SOCAR also has a share in two major export pipelines Baku-Tbilisi-Ceyhan pipeline and South Caucasus Pipeline.[7] SOCAR has a 25% stake in the Baku-Tbilisi-Ceyhan pipeline and 10% in South Caucasus Pipeline.[14] It also has stakes in the Baku-Supsa Pipeline and Baku-Novorossiysk Pipeline.


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

SOCAR's head office is located at a three-story building constructed in the French renaissance style, facing the Azneft square in downtown Baku.[15]

Representative offices of SOCAR are located in Bucharest, Frankfurt am Main, Geneva, London, Istanbul, Vienna, Astana, and Tehran.[16][17][18] In Romania, SOCAR considers building a petrochemical refinery complex to supply European countries with oil products. [19] 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). For more information please contact SOCAR UK on Austrian and German offices of SOCAR promote transportation of Azerbaijani hydrocarbons from Azerbaijan to Europe[20] as well as realization of Nabucco project in cooperation with Austria's largest oil producing, refining and gas station operating company OMV.[21] OMV had been transporting some of Azeri Light crude oil from Georgian port of Supsa.[22] 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[23] In November 2011, SOCAR bought ExxonMobil subsidiary Esso Schweiz for an undisclosed amount. Esso Schweiz has 172 filling stations and around 885 people in its staff.[24]

SOCAR Energy Georgia, Ltd.[edit]

SOCAR's subsidiary SOCAR Energy Georgia, Ltd. was founded in 2006. The company 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.[6] 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[25] 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.[26]


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.


Sports sponsorships[edit]

SOCAR is the sponsor of Association of Football Federations of Azerbaijan and Neftçi Baku PFK, Atlético Madrid. They have also struck a deal with UEFA to sponsor their international football competitions. For example, UEFA Euro 2016.[27]

See also[edit]


  1. ^ "ANNUAL REPORT 2011" (PDF). Petkim Petrokimya Holding A.Ş. Retrieved 2012-06-28. 
  2. ^ a b Energy Information Administration. Country Analysis Briefs. Azerbaijan. October 2009
  3. ^ a b Rovshan Ibrahimov (2007-02-17). "State Oil Company of Azerbaijan Republic: Transition from National to Transnational Company or Demand of Time?". Turkish Weekly. Retrieved 2010-01-13. 
  4. ^ a b c Azerbaijan portal
  5. ^ a b SOCAR website. About the company
  6. ^ a b SOCAR Georgia. Company Overview
  7. ^ a b "Resource Directory". Azerbaijan International. Retrieved 2010-01-13. 
  8. ^ Cohen, Michael (25 November 2007). "Azerbaijan: Production Sharing Agreements". Energy Information Administration, Department of Energy. Retrieved 23 July 2009. 
  9. ^ a b New Report Highlights Lack Of Transparency In Azerbaijan's Oil Industry. RFE/RL Dec. 10, 2013
  10. ^ a b Azerbaijan Anonymous Global Witness 2013
  11. ^ Azerbaijan Anonymous Global Witness
  12. ^ a b c Alex Ferreras, “International Bank of Azerbaijan Remains Largest Creditor of SOCAR”,, 30 Jul 2012
  13. ^ "Инвестиции в блок месторождений "Бахар" и "Гум-Дениз" составят $1 млрд" [Investment in "Bahar" and "Gumdeniz" bloacks will make up $1 bln] (in Russian). Rosinvest. 2009-12-22. Retrieved 2010-01-05. 
  14. ^ EBRD. SOCAR - South Caucasus Gas Pipeline Project Summary Info
  15. ^ Directory. SOCAR
  16. ^ SOCAR Representative offices
  17. ^ Isabel Gorst (2008-01-24). "State Oil Company: Burning ambition to compete on global stage". Financial Times. Retrieved 2010-01-13. 
  18. ^ "SOCAR office in Romania officially inaugurated". Romania News Watch. 2007-07-13. Retrieved 2010-01-13. 
  19. ^ "SOCAR Prepares Special Energy Strategy for Work in Europe". The Azeri Times. 2009-05-22. Retrieved 2010-01-13. 
  20. ^ "Germany is interested to carry energy resources from Azerbaijan to Europe". 2006-08-25. Retrieved 2010-01-14. 
  21. ^ "SOCAR President meets with Austria's OMV deputy chairman". 2007-04-13. Retrieved 2010-01-14. 
  22. ^ "Article: Azerbaijan: Total And OMV Win Socar Tenders". 2004-08-18. Retrieved 2010-01-14. 
  23. ^ "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. 
  24. ^ "Azerbaijan Socar Buys Esso Switzerland From ExxonMobil -Report". Zurich: NASDAQ. 2011-11-17. Retrieved 2011-11-17. 
  25. ^ "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. 
  26. ^ "Azerbaijan state oil company becomes Georgia’s biggest taxpayer in 2009". 2010-01-27. Retrieved 2010-01-27. 
  27. ^ "Sponsorship deal with SOCAR". Retrieved 31 July 2013. 

External links[edit]