BAKU, Azerbaijan, September 15. SOCAR’s acquisition of Italian energy company Italiana Petroli S.p.A. (IP), financed with cash, is expected to strengthen the Azerbaijani company’s downstream integration and diversify its international operations, Fitch Ratings said.
IP generated EUR616 million in adjusted EBITDA and EUR395 million in reported EBITDAR, according to Fitch.
The Italian company operates two refineries in Ancona and Novara with a combined refining capacity of 10 million tonnes per year. Its assets also include around 4,500 retail stations across Italy, selling approximately 8.5 million tonnes of fuel, as well as wholesale fuel sales of 7.3 million tonnes supported by storage and logistics infrastructure.
Fitch said it views the acquisition positively, noting that it broadens SOCAR’s international footprint while adding significant downstream assets.
SOCAR plans USD7 billion expansion in Türkiye
Fitch also highlighted SOCAR’s plans to invest around $7 billion in new facilities in Türkiye, aimed at reducing the country’s dependence on polyolefin imports and improving competitiveness.
SOCAR announced the expansion plan in early 2025, and according to management, the company intends to make a final investment decision by the end of 2026.
Fitch has not yet incorporated the potential capital expenditure or its impact into its forecasts, pending further details of the project.
Oil and gas production declines
Meanwhile, SOCAR’s own-operated oil production fell 5% in 2025, with the decline continuing into the first half of 2026. Gas production increased by 1% last year but has also declined in 2026, while output from production-sharing agreements (PSAs) decreased.
Gross production at the Azeri-Chirag-Gunashli (ACG) field fell by around 4% in 2025 and a further 2% in 2026, while Shah Deniz gross production declined 4% last year.
Drilling activity increases
Fitch noted that SOCAR has stepped up development efforts in response to declining production. Drilling at SOCAR-operated fields increased by one-third in the second quarter of 2026.
Other measures include enhanced oil recovery and the development of previously untapped non-associated gas resources under the ACG PSA.
At Shah Deniz, a new development stage involving a $3 billion investment is expected to add 50 billion cubic meters of gas and 25 million barrels of liquids from 2029.
Separately, TotalEnergies, SOCAR and ADNOC are expected to make a final investment decision in 2026 on the second stage of development of the Absheron field. The project would increase production to 140,000 barrels of oil equivalent per day (boe/d), from the current level of around 30,000–40,000 boe/d.
