In the second quarter of 2020, SOCAR produced 1.8 million tons1 of oil and 1.8 billion cubic meters2 of natural gas. The countryâ€™s natural gas production increased by 14% compared to the same period of the previous year, reaching 9.4 billion cubic meters3. Crude oil production totaled 8.6 million tons4 nationwide.
The volume of drilling, performed by SOCAR, exceeded 15 thousand meters5, a decrease from the same period of last year. This was due to the decrease in global oil demand as the results of COVID-19 pandemic and temporary oil production cut under the OPEC+ agreement. Production and drilling were suspended mainly on the onshore fields with low profitability.
In the second quarter, SOCARâ€™s refining output was about 1.5 million tons6 of oil, 804 million cubic meters7 of natural gas. The oil refining depth reached 94.93%.
â€˘ Net profit AZN 651 million
â€˘ Non-current assets AZN 46,2 billion
â€˘ Cash and cash equivalents AZN 7,1 billion
â€˘ SOCARâ€™s current assets and liabilities decreased slightly by less than 1%
SOCAR has released its consolidated financial statements for 2019. In the reporting year, the company's total turnover (revenue) amounted to AZN 83.8 billion. Trading oil and oil products from third parties represents a significant part of SOCAR's turnover. Although the total turnover of crude oil and oil products traded from third parties decreased, the efficiency and profit margin of trading operations were higher in 2019. During the reporting period, 92.7 % of the company's total revenue was recorded in foreign markets, of which AZN 63.7 billion fell to the share of trade turnover through SOCAR Trading and SOCAR Energy Holding operated in Switzerland.
The company's revenues continued to grow last year in areas with higher profit margins, such as production and transportation. As a result, SOCAR's revenues increased by 88.6 % in Turkey and 4.3 % in Georgia .
The South Caucasus Pipeline Company (SCPC) announces that as from 20 March 2020 technical operatorship of the South Caucasus Pipeline (SCP) has been transferred from BP Exploration (Shah Deniz) Limited to SOCAR Midstream Operations Limited, a fully-owned subsidiary of SOCAR. The South Caucasus Pipeline is one of the key sections of the Southern Gas Corridor.
This is in accordance with the revised SCP Pipeline Ownersâ€™ Agreement, signed in December 2013 as part of the final investment decision on the Shah Deniz Stage 2 and South Caucasus Pipeline Expansion (SCPX) projects. The agreement provides for SOCAR to become the technical operator of SCP on the first anniversary of the SCPX construction completion date.
The transfer covers the operation of all dedicated SCP facilities in Azerbaijan and Georgia. The facilities that are common to both the Baku-Tbilisi-Ceyhan (BTC) pipeline and SCP will continue to be operated by bp in its capacity as common operator. There is no change to the operatorship of the Sangachal Terminal, BTC or the Western Route Export Pipeline (WREP) which will all continue to be operated by bp.
SOCAR and bp will continue to work together during 2020 to effectively implement all aspects of the transition process.
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 countryâ€™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.
The OPEC+ agreement considers temporary implementation of production cuts in three stages: first during May and June 2020, second between July and December 2020, third between January 2021 and April 2022. It was agreed to reduce production at a higher rate in the first stage, and to gradually restore production levels in the following periods. According to the international agreement, daily production in Azerbaijan should not exceed 554,000 barrels in May and June 2020, 587,000 barrels in July-December 2020 and 620,000 barrels between January 2021 and April 2022.
These figures are applied only to crude oil, but not to gas condensate production.
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.read more
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