SOCAR accelerates global growth through targeted sales, key acquisitions

The State Oil Company of Azerbaijan Republic (SOCAR) has reaffirmed that it is not currently considering an initial public offering (IPO), instead prioritizing targeted asset sales and strategic acquisitions to advance its international expansion.

This was confirmed by SOCAR Vice President Afgan Isayev in an interview with Euronews.

"We do divest certain assets. Like, for example, last year we sold 5% in Shah Deniz project to MVM Energy company, one of the global players in the energy market. As the second example, we have Absheron gas field where SOCAR and TotalEnergies were the shareholders. So in 2023, Total and SOCAR divested certain parts to Abu Dhabi National Oil Company (ADNOC)," Isayev said.

Reflecting on the company’s acquisition strategy, Isayev highlighted recent successes abroad, noting that SOCAR secured a stake in a gas field in the United Arab Emirates last year.

"This year, we are able to complete the transaction and acquire the shares in Tamar gasfield in the East Mediterranean, which is also a very important strategy for our development abroad. And, of course, if the opportunities present themselves, if they are mutually beneficial, we will consider the further acquisitions," Isayev added.

Isayev underlined that SOCAR is planning to localize part of the production of equipment for wind farms as part of its broader strategy to transform into a balanced national energy company by 2035.

He emphasized the company's vision of evolving beyond a traditional hydrocarbon producer. “And, as you rightly mentioned, not a hydrocarbon company, but with a balanced portfolio. One of the major challenges that we face when it comes to the development of renewable energy sources here in Azerbaijan is the limitations of the grid to intake the intermittent sources of energy. And that's why we need additional balancing power, by the CCGTs, for example, we need battery energy storage solutions or a combination of both,” he explained.

Addressing logistical challenges specific to renewable energy infrastructure, Isayev highlighted the difficulties posed by Azerbaijan’s lack of access to open seas. “Some of the infrastructure-related equipment, some of the equipment that we require for wind farms, for example, the blades can average 92–94 metres in length. And bringing them here is quite a challenge. Hopefully, of course, we will be able to localize certain production in the future,” he said.

Isayev also pointed out the pressing need for modernization within SOCAR’s existing infrastructure, much of which dates back to the Soviet era. “That is why, as a challenge number three, is the decarbonization of the core activities themselves. We require massive investments in modernization of our operational processes. We require massive investments in digitalization,” he stated.

By Vafa Guliyeva