Azerbaijan unveils forecasts on SOCAR's capital investments until 2026

The total capital investments of the State Oil Company of Azerbaijan (SOCAR) are expected to reach 16 billion manats ($9.4 billion) in 2022-2025.

"We expect that deleveraging and the completion of major projects should make SOCAR's Capex programme more visible, which could lead to an upward revision of SOCAR's standalone credit profile (SCP)," Report informs citing the Fitch Ratings’ message on the confirmation of SOCAR's rating.

According to Fitch, SOCAR's cash balance was nine billion manats ($5.3 billion) as of late 2021 compared to short-term debt worth 5.9 billion manats ($3.5 billion).

"We expect big cash flow in 2022 and 2023 amid rising oil and gas prices supporting SOCAR's liquidity," the report added.

According to the message, while SOCAR's leverage has historically been relatively high compared to similar companies, Fitch expects net leverage funds from operations (FFO) to decline from 2022.

"This will reflect higher cash flow due to higher oil and gas prices in line with Fitch's pricing policy. Maintaining FFO net leverage below 4.0x, combined with satisfactory liquidity and improved financial transparency, could lead to a positive SCP reassessment," the report says.

Fitch forecasts SOCAR's annual dividend payment worth 0.6 billion manats ($0.3 billion) during 2022-2025.