(MENAFN- AzerNews)
Nazrin Abdul
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The State Oil Company of the Republic of Azerbaijan (SOCAR) has
been a pivotal force in the socio-economic development of
Azerbaijan, undergoing significant growth since its inception.
Under the strategic direction of National Leader Heydar Aliyev,
SOCAR's oil strategy, initiated in 1994, has driven transformative
changes within the company and facilitated Azerbaijan's integration
into the global economy. This strategy has also attracted
considerable foreign investment, solidifying SOCAR's role as a
major player in the international energy market.
The "Contract of the Century," signed with leading international
oil companies to develop hydrocarbon deposits in the Azerbaijani
sector of the Caspian Sea, marked a new era in the nation's oil and
gas industry. Today, SOCAR has evolved from a company focused on
oil and gas production, transportation, and processing into a major
transnational corporation. It effectively represents Azerbaijan in
international projects, contributing significantly to the country's
economic strength, socio-economic development, and the realization
of national interests.
SOCAR stands as the largest and most dynamic energy company in
the region, leading both Azerbaijan and Georgia, and ranking among
the top three holdings in Turkiye.
In the second quarter of 2024, SOCAR achieved a notable drilling
milestone, completing 21,600 meters of drilling-an increase of
14.7% compared to the same period the previous year.
The company produced 1.9 million tons of oil and 1.8 billion
cubic meters of gas from fields operated independently or in
partnership as the main shareholder. Gas production in Azerbaijan
grew by approximately 5.2% year-over-year, reaching 12.5 billion
cubic meters in the second quarter. Overall, 7.2 million tons of
crude oil were extracted in Azerbaijan during this period.
SOCAR's oil exports totaled around 4.2 million tons,
encompassing both oil produced directly by SOCAR and its share of
production from international consortia in Azerbaijan. The company
also saw a 9.2% increase in natural gas exports, reaching 6.2
billion cubic meters. Domestic natural gas consumption during the
reporting period was 2.3 billion cubic meters.
In processing, SOCAR handled over 1.5 million tons of oil and
more than 862 million cubic meters of gas in the second quarter.
Gas processing volumes increased by 0.6% compared to the same
period in 2023. Additionally, SOCAR exported over 659,000 tons of
oil, petrochemical, and gas-chemical products from its Azerbaijani
facilities, marking an 8% rise in exports compared to the previous
year.
SOCAR's robust oil and gas export activities reinforce its
position in the international energy markets, contributing
significantly to global energy security. The company remains
committed to expanding its export opportunities and enhancing its
role in the global energy sector.
SOCAR's global energy relationships
European Countries: SOCAR enhances Europe's energy security by
exporting natural gas through the Southern Gas Corridor. This
project includes the Trans-Anatolian Pipeline (TANAP) and the
Trans-Adriatic Pipeline (TAP), which transport Shah Deniz gas to
European markets. SOCAR's role is crucial in diversifying Europe's
energy sources and reducing reliance on single suppliers.
Turkiye: SOCAR is a major player in the Turkish energy market,
exporting oil and gas from Azerbaijan. The company has significant
investments in Turkiye, including the Petkim petrochemical complex
and the STAR Refinery. These investments underscore SOCAR's
commitment to the Turkish energy sector and its strategic
importance in regional energy dynamics.
Georgia: SOCAR exports oil and gas to Georgia, a key transit
country for Azerbaijani energy resources. Georgia's strategic
location facilitates the transport of Azerbaijani oil and gas to
various markets, reinforcing its role in the regional energy
infrastructure.
Russia: SOCAR engages in oil and gas trade with Russia,
primarily through established transit routes. This trade
contributes to the overall energy flow between the countries and
supports regional energy stability.
South Asian Countries: SOCAR, through its international
partners, exports oil to South Asia. The company's activities in
this region aim to expand its footprint in the global energy market
and foster economic ties with South Asian countries.
Serbia: SOCAR's collaboration with Serbia is formalized through
a "Memorandum of Understanding" and an "Agreement on the Sale of
Gas" between SOCAR and Srbijagas. This cooperation enhances
bilateral relations and promotes energy sector development between
the two countries.
Kazakhstan: SOCAR and Kazakhstan maintain a robust partnership
in the oil and oil products trade. Key aspects of this cooperation
include the transportation of Kazakh crude oil through the
Baku-Tbilisi-Ceyhan pipeline and processing operations in
Azerbaijan. Since March 2023, SOCAR Midstream Operations LLC has
been transporting 125,000 tons of oil per month from Kazakhstan's
Tengiz field. Notably, the first shipments from Kazakhstan were
loaded onto the "President Heydar Aliyev" and "Shusha" tankers in
March 2023. The road map signed with KazMunayGaz in 2023 further
enhances cooperation, positioning Azerbaijan as a pivotal regional
energy hub.
Israel: SOCAR's engagement with Israel focuses on the exchange
of expertise in exploration, production, and transportation of
hydrocarbons. This collaboration is instrumental for Israel's oil
and gas sector development, leveraging SOCAR's advanced
technological and operational experience.
SOCAR's international partnerships and strategic investments
illustrate its pivotal role in global energy markets and its
commitment to strengthening energy ties with countries around the
world.
Future energy projects
SOCAR has ambitious plans for the future of its energy
operations, particularly with the development of new natural gas
projects. Beginning in the first quarter of 2025, SOCAR will
initiate natural gas production as part of the
"Azeri-Chirag-Guneshli" (ACG) deep gas project. President Ilham
Aliyev has emphasized the significance of this project,
highlighting its large reserves and its role as a major source of
Azerbaijan's oil exports over the years.
President Aliyev stated, "The 'Azeri-Chirag-Guneshli' structure
represents a promising asset with substantial reserves. We have
long relied on ACG for our oil exports, and now, with our partners,
we are preparing to explore its deep gas potential. Initial
production is projected to be around half a billion cubic meters,
with expectations to increase this volume 3-4 times in the coming
years. This development, alongside production from the 'Shah Deniz'
and 'Absheron' fields, will significantly boost our gas output.
Additionally, we plan to advance the second phase of the 'Umid'
gas-condensate field, which could yield 2-3 billion cubic meters of
gas within 3-4 years. These projects are grounded in detailed
analysis, financial resources, and agreements with investors, with
some being executed in collaboration with partners and others by
SOCAR independently."
SOCAR green energy projects
SOCAR is also making strides in the field of renewable energy
through its subsidiary, "SOCAR Green". Established to promote green
energy and decarbonization, SOCAR Green focuses on managing SOCAR's
strategic renewable energy projects and enhancing cooperation with
international partners in this sector.
During the Baku Energy Week, SOCAR Green signed Shareholders'
Agreements with the United Arab Emirates' company "Masdar" for
three major renewable energy projects in Azerbaijan. These
agreements encompass the development of one wind and two solar
power plants. This collaboration aims to diversify Azerbaijan's
energy sources, expand the use of alternative energy, and support
the country's transition to a low-carbon economy.
The signing of these agreements marks a significant step toward
Azerbaijan's energy transition goals. With the planned installation
of three power stations totaling 1 GW in capacity, these projects
will contribute to Azerbaijan's commitment to a greener future,
aligning with its role as the host of COP29. The implementation of
these projects is expected to save approximately 2.3 billion kWh of
electricity annually and prevent about 1 million tons of carbon
emissions per year. This aligns with Azerbaijan's green agenda and
supports sustainable development efforts, significantly advancing
the country's renewable energy goals.
SOCAR's efforts in expanding its natural gas production and
investing in renewable energy underscore its commitment to both
meeting current energy demands and advancing global sustainability
goals.
SOCAR's trajectory from a national oil company to a major
transnational corporation reflects its dynamic impact on both
regional and global energy landscapes. With substantial investments
and strategic partnerships spanning Europe, Turkiye, Georgia,
Russia, South Asia, Serbia, Kazakhstan, and Israel, SOCAR continues
to enhance its global footprint. Looking ahead, SOCAR is poised to
further expand its influence through ambitious natural gas projects
and green energy initiatives.
In conclusion SOCAR's ongoing efforts will not only support
Azerbaijan's energy transition but also contribute significantly to
the broader goals of sustainable development and energy
diversification.
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