S&P Global Ratings has upgraded the long-term issuer credit rating and senior unsecured debt rating of the State Oil Company of Azerbaijan (SOCAR) from “BB-” to “BB”, noting major improvements in financial transparency and disclosure practices.
According to the agency, enhanced clarity around SOCAR’s financial policy has strengthened analysts’ understanding of the company’s operations and performance. As a result, S&P raised SOCAR’s standalone credit profile (SACP) from “b” to “bb-.”
“The stable outlook reflects our view that SOCAR will maintain manageable liquidity supported by sizable cash reserves, with operating performance remaining steady and the company’s FFO-to-debt ratio staying above 12%, backed by continued state support,” the statement said.
Shah Deniz Compression Project to Add 50 bcm of Gas
S&P also highlighted the strategic importance of the Shah Deniz Compression (SDC) project, which is expected to deliver an additional 50 billion cubic meters of natural gas and 25 million barrels of condensate for Azerbaijan.
The final investment decision was approved in June 2025, with a total project cost of $2.9 billion.
Production Outlook
The agency forecasts SOCAR’s 2025 production to remain broadly in line with 2024 levels:
7–7.5 million tons of oil
7–8.5 bcm of natural gas
In 2024, SOCAR-operated assets and smaller joint ventures collectively produced 7.5 million tons of oil and 7.7 bcm of gas, reaffirming the company’s leading role in the domestic energy sector.
A Key State-Owned Energy Player
SOCAR is a fully state-owned, vertically integrated oil and gas company engaged across the entire value chain – from exploration and production to refining, petrochemicals, transportation, and marketing.
Key assets and holdings include:
31.65% in the Azeri–Chirag–Gunashli (ACG) field, which yielded 16.8 million tons of oil in 2024.
Significant stakes in pipeline infrastructure, including 32.97% in the Baku–Tbilisi–Ceyhan (BTC) oil pipeline.
51% ownership in Petkim and participation in Turkey’s STAR refinery, operational since 2018.
Global trading operations conducted through SOCAR Trading.
Role in the Southern Gas Corridor
The Southern Gas Corridor (SGC) – 49% owned by SOCAR and 51% by the Azerbaijani government – holds:
16% in the Shah Deniz field,
21.02% in the South Caucasus Pipeline (SCP),
51% in the TANAP pipeline.
Shah Deniz currently operates two expansion phases. The Shah Deniz 2 project, completed in 2020, raised output by 16 bcm of gas annually, of which 6 bcm is delivered to Turkey via TANAP and 10 bcm to Southern Europe via TAP.
