BAKU, Azerbaijan, September 15. Fitch Ratings has affirmed the State Oil Company of the Azerbaijan Republic’s (SOCAR) Long-Term Issuer Default Rating (IDR) and senior unsecured rating at ‘BBB-’, with a Stable Outlook on the IDR.
The ratings are aligned with Azerbaijan’s sovereign rating of ‘BBB-/Stable’ under Fitch’s Government-Related Entities (GRE) Rating Criteria, reflecting the Azerbaijani government’s strong support for SOCAR.
According to Fitch, this support is provided through financial guarantees, cash contributions and equity injections, while SOCAR also performs important social functions and serves as a key state vehicle for developing oil and gas projects.
At the same time, Fitch upgraded SOCAR’s Standalone Credit Profile (SCP) to ‘bb’ from ‘bb-’, citing improved leverage metrics.
“SOCAR’s standalone profile remains solid, supported by favourable hydrocarbons prices, reducing the immediate need for support,” Fitch said, adding that it nevertheless expects the Azerbaijani government to provide direct support to the company if necessary.
Fitch noted that the Azerbaijani government exercises significant control over SOCAR’s operations, financial performance and strategic decisions, demonstrating “robust oversight.” The agency also highlighted the government’s track record of providing substantial support, including capital injections and debt guarantees.
According to SOCAR, state guarantees covered 25% of its debt at the end of 2025 following the consolidation of Southern Gas Corridor (SGC). Fitch said the ratio had historically been significantly lower, at 4% at end-2023, and estimates it fell to around 12% following the repayment of SGC eurobonds.
Fitch said SOCAR’s standalone profile reflects its mid-scale oil and gas production, integrated business model and strong financial position, while also taking into account corporate governance limitations.
The agency underscored SOCAR’s strategic importance to Azerbaijan as an oil and gas producer, a supplier of refined products to the domestic market and a participant in major energy projects, including the SGC, which are critical to the country’s energy security.
SOCAR also holds stakes in and represents the Azerbaijani government in several oil and gas joint ventures that are important to the country’s hydrocarbon production.
Fitch described SOCAR as Azerbaijan’s largest employer and taxpayer, as well as the government’s principal vehicle for developing the country’s oil and gas industry.
