• Net profit AZN 651 million
• Non-current assets AZN 46,2 billion
• Cash and cash equivalents AZN 7,1 billion
• SOCAR’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.
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.
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.
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.
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.
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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