Azernews.Az

Akbar Novruz

Read more

Azerbaijan’s State Oil Company (SOCAR) is expected to allocate an average of approximately $2.35 billion (₼4 billion) annually in capital expenditures between 2026 and 2030, according to Fitch Ratings.

The rating agency expects SOCAR’s declining production volumes to begin stabilizing from 2028.

Fitch also forecasts that SOCAR will allocate around $147 million (₼250 million) annually through 2027 to support the Petkim petrochemical complex in Türkiye. Meanwhile, annual transfers to the Azerbaijani government through dividends and other payments are expected to average $1.06 billion (₼1.8 billion) over the 2026–2030 period.

SOCAR’s EBITDA, after dividend payments to non-controlling shareholders, reached $5.47 billion (₼9.3 billion) in 2025, up from $2.94 billion (₼5 billion) a year earlier, Fitch said.

The increase reflected the full-year consolidation of the Southern Gas Corridor (SGC) and the STAR refinery, according to the agency.

As a result, SOCAR’s net debt-to-EBITDA ratio stood at 1.0x at the end of 2025. Fitch expects the ratio to remain at around the same level in 2026, with higher capital and acquisition expenditures offset by elevated oil and gas prices and refining margins.

Fitch forecasts SOCAR’s EBITDA, after dividend payments to non-controlling shareholders, to reach $7.06 billion (₼12 billion) in 2026 before declining to between $4.41 billion and $4.41 billion (₼7.5–8 billion) in 2028–2029.

The agency consequently expects SOCAR’s net debt-to-EBITDA ratio to normalize at approximately 2x by 2029.

At the end of 2025, SOCAR held $8.24 billion (₼14 billion) in cash and cash equivalents, alongside approximately $882 million (₼1.5 billion) in marketable securities after Fitch adjustments.

“These assets provided sufficient coverage for the company’s short-term debt of $8.88 billion (₼15.1 billion),” Fitch said.

During 2026, SOCAR repaid or refinanced $8.35 billion (₼14.2 billion) in debt using a combination of short- and long-term financing, according to the report.