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SOCAR to supervise the implementation of OPEC+ oil production cut agreement in Azerbaijan

On April 9, 2020, 23 member countries of OPEC+ discussed the economic recession caused by Covid-19 pandemic and agreed to cut oil production by 9,7 million barrels per day from May 1, 2020, in order to balance supply and demand on the global market. The Republic of Azerbaijan, as a member of OPEC+, participated in the meeting and, along with other countries, committed voluntarily to production cuts in relevant proportions.
The Ministry of Energy, which represented Azerbaijan in the meeting, subsequently announced the terms of the agreement and the commitments undertaken by Azerbaijan. The Ministry proposed proportional sharing of the production cut quotas among the country’s oil producers. SOCAR, the State Oil Company of Azerbaijan, was ordered to carry out the implementation of the production cuts by the Cabinet of Ministers of the Republic of Azerbaijan.

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Innovative oil production: SOCAR launches Digital Field project based on SAP UFAM

SOCAR conducts the digital transformation of its oil and gas production. SAP UFAM (a joint solution of SAP and OIS) will combine production processes in one system and will be integrated into the digital core of the enterprise - SAP ERP. The start of industrial operation of UFAM is scheduled for June 2020.
SOCARs vice-president for field development Yashar Latifov said: “SOCAR strives to use advanced technologies in business processes and production, while setting industry standards for oil production and supporting the government policy on digitalization of the economy. The implementation of UFAM platform will consolidate disparate data from various production systems. It will carry out integrated analysis to ensure that wells are operated in accordance with the approved potential, and also optimize geological and technical measures.” .

A consolidated team from SOCAR, Caspian Innovation Center, SAP Digital Business Services and OIS are creating a single data source, which will allow for integrated planning, modelling, analysis and monitoring of all oil production processes.

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Production and exports in the first quarter of 2020

In the first quarter of 2020, SOCAR produced 1,9 million tons1 of oil, 1,8 billion cubic meters2 of gas on the fields exploited by its own. Nationwide natural gas production grew by 10% compared to the first quarter of the previous year and amounted to 10 billion cubic meters3 , oil production equaled to 9,3 million tons4 . Despite some growth in production on the fields, operated by SOCAR, the managed decline in the country’s overall oil production continued in the first quarter of 2020.
SOCAR carried out nearly 26 thousand meters5 of drilling work, including about 9 000 meters6 in March.

In the first quarter of 2020, SOCAR’s Heydar Aliyev Oil Refinery processed more than 1,5 million tons of crude oil7 . SOCAR Gas Refinery processed more than 1,1 billion cubic meters8 of gas in that period. SOCAR’s petrochemical unit Azerikimya refined about 167 thousand tons9 of intermediate products.

SOCAR exported about 5,4 million tons10 of crude oil in the first quarter of this year. 3,5 billion cubic meters11 of natural gas have been exported from the country in the past three months. This year the actual level of gas consumption amounted to 4,1 billion cubic meters12 , which exceeds the last year’s figure by 7%. The export of oil and petrochemical products amounted to nearly 534 thousand tons13 in January-March 2020.

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SOCAR and Equinor confirm participation in the development of Karabagh field, sign an HSE cooperation agreement

On March 30, 2020, President of SOCAR Rovnag Abdullayev met with Head of Equinor Representative Office in Azerbaijan Fawad Quraishi. They have discussed the issues related to the discovery of Karabagh oil field and exchanged views on the prospective cooperation in new areas, including industrial safety.
On March 19, 2020, the parties confirmed the discovery of Karabagh field, a new field with 60 million tons of oil reserves, as a result of successful drilling operation. The Karabagh field is the first oil field discovered during the independence period of Azerbaijan. During the 30 March meeting, Equinor Apsheron AS confirmed its sustainable participation in the development of Karabagh field, based on effective results.

During the meeting, SOCAR and Equinor Apsheron AS signed a new cooperation agreement in support of their commitment to develop and strengthen collaboration in industrial and fire safety, health and environment, motor transport safety and emergency response within independent and joint projects of the two companies. The parties agreed on sharing best practices, procedures, advanced expertise, and relevant documents with regard to management of industrial and fire safety, health and environment, motor transport safety, emergency response and land transport information on best practices that contribute to reduction of accident and injury rates, minimization of the ecological footprint.

The agreement also considers sharing practices and data as related to the use of international standards on industrial and fire safety, health and environment, motor transport safety and emergency response, exchanging experience in managing pollutant emissions, including greenhouse gas, as well as arranging and holding meetings, workshops, consultations and exchanging experience in the areas of mutual interest.

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The State Oil Company of Azerbaijan… at a glance

Discover SOCAR

The State Oil Company of the Azerbaijan Republic (SOCAR) is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate.

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International ratings

When investors and credit organizations wish to cooperate with any company, first of all the international rating of the company in discussion is reviewed.

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