(MENAFN- Trend News Agency)
BAKU, Azerbaijan, August 9. Fitch Ratings has
upgraded State Oil Company of the Azerbaijan Republic's (SOCAR)
Long-Term Issuer Default Rating (IDR) and senior unsecured rating
to 'BBB-' from 'BB+', Trend reports with reference to Fitch.
The Outlook on the Long-Term IDR is Stable.
“SOCAR is fully owned by the state and its rating is equalised
with that of Azerbaijan (BBB-/Stable) under Fitch's
Government-Related Entities (GRE) Rating Criteria. This is
underpinned by state support provided to the company in the form of
financial guarantees, cash contributions and equity injections, as
well as SOCAR's social functions and its importance as a state
vehicle for the development of oil and gas projects,” reads a
message from Fitch.
The rating agency notes that the government has historically
provided significant financial support, such as capital injections
and debt guarantees (4% of SOCAR's debt at end-2023 was state
guaranteed).
“SOCAR's financial profile remains strong due to favourable oil
and gas prices limiting the need for state support. However, we
believe that in case of need, the government would provide direct
financial support to SOCAR,” says the report.
Fitch analysts note SOCAR's important role in Azerbaijan's
economy as an oil and gas producer and seller of refined products
on the domestic market and its involvement in significant energy
projects, such as the Southern Gas Corridor, which are vital for
the country's strategic interests and its energy security.
“SOCAR also holds stakes and represents the government in
various oil and gas joint ventures vital to the country's
hydrocarbon output. SOCAR is the largest employer, taxpayer, and
the state's vehicle for the development of oil and gas industry in
the country,” says Fitch.
SOCAR is engaged in exploration of oil and gas fields, the
production, processing and transportation of oil, gas and gas
condensate, the sale of oil and petrochemicals in the domestic and
international markets, the supply of natural gas to industrial
enterprises and the population of Azerbaijan, as well as
Europe.
The company conducts various activities in countries such as
Türkiye, Georgia, Romania, Switzerland, Germany and Ukraine,
including trading activities mainly in Switzerland, Singapore and
Nigeria.
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