BAKU, Azerbaijan, January 4. Trend presents an overview of the activities of the State Oil Company of Azerbaijan (SOCAR) in 2025, which highlights the key development directions, major projects, and the most significant events of the reporting period.
According to the latest data, in the third quarter of 2025, SOCAR carried out drilling operations to a total depth of 12,000 meters.
At the fields operated by the company independently or as the main shareholder, 1.8 million tons of oil and 1.94 billion cubic meters of gas were produced.
Across the country, gas production increased by 7.4% compared to the same period in 2024, reaching 13 billion cubic meters. A total of 7 million tons of crude oil were produced in Azerbaijan in the third quarter of 2025.
SOCAR exported 4.1 million tons of oil to foreign markets during the reporting period. This figure includes both the company's own production volumes and profit shares from oil extracted by international consortia in the country, belonging to the state of Azerbaijan and SOCAR. Natural gas exports amounted to 6.3 billion cubic meters, with consumption at 2.4 billion cubic meters. The gas export increased by 8.7%.
In the third quarter, SOCAR refined 1.7 million tons of oil and 760 million cubic meters of gas. At the same time, 639,200 tons of oil, petrochemical, and gas chemical products produced at SOCAR enterprises in Azerbaijan were exported. Exports of these products grew by 2.7%.
On December 19, the SOCAR Complex Drilling Works Trust (CDWT) said that, on behalf of the Azneft production union, it successfully drilled eight wells at the Western Absheron field in 2025 using directional drilling and handed them over to the customer with high production indicators.
SOCAR's contractual and partnership base in 2025
On January 15, an agreement was signed between SOCAR's subsidiary SOCAR Midstream Operations LLC and KazMunayGas (KMG) subsidiary KMG Trading for the transit of 240,000 tons of Kashagan oil per year.
In the same month, SOCAR began the transit of crude oil extracted from the Kazakh Kashagan field through the Baku-Tbilisi-Ceyhan (BTC) pipeline. The first batch of oil from the Kashagan field, loaded onto a tanker in the port of Aktau on January 25, amounted to approximately 6,000 tons. The cargo arrived at the Sangachal terminal on January 27 and was further transported via BTC to the Ceyhan port.
On January 21, SOCAR Türkiye Enerji, SOCAR's Turkish subsidiary, and Nakkaş Holding signed a long-term cooperation protocol. The document covers the development of logistics for the transportation of SOCAR products and the creation of a facility for trading and storing aviation fuel at Sabiha Gökçen Airport.
On January 31, SOCAR signed an agreement with Union Energy to acquire a 10% share in the Tamar project, one of the largest gas fields in the Mediterranean basin of Israel.
On February 1, SOCAR began its first onshore airborne gravity survey project in collaboration with the renowned UK company Metatek. The goal of this advanced research is to obtain high-precision geological data over large areas in the shortest possible time.
On February 13, SOCAR launched the Leucipa monitoring program in the Caspian region for the first time. This project, being implemented for the first time in the Caspian region, is a key part of SOCAR’s upstream sector digital transformation strategy.
On March 29, SOCAR Türkiye completed the transfer of the gas distribution companies Bursagaz and Kayserigaz to Aksa Doğalgaz. Aksa Doğalgaz began providing services in the distribution zones of Bursa and Kayseri, previously managed by SOCAR Türkiye.
On April 28, SOCAR Green LLC and Universal Energy Co., Ltd. signed a Memorandum of Understanding (MoU) to explore opportunities for joint renewable energy projects in Azerbaijan. The memorandum outlines collaborative efforts in project development, EPC (engineering, procurement, and construction), and O&M (operation and maintenance).
On June 2, a memorandum of understanding was signed between SOCAR and Gran Tierra Energy Inc. The document outlines joint research activities for the technical and economic evaluation of a project for the exploration, development, and production of hydrocarbon potential in the Gobustan-Caspian region. At the same time, Gran Tierra Energy Inc. will analyze the existing geological and technical data for the project, as well as the logistical and infrastructure potential. Upon agreeing on the exploration program and key commercial terms, work will proceed to sign a production sharing agreement.
On the same day, SOCAR and ExxonMobil Corporation signed a memorandum of understanding. The document outlines cooperation in Azerbaijan’s oil and gas sector. Further details of the memorandum weren't disclosed.
On June 3, an agreement was signed with MOL Group regarding the main technical and commercial terms of the project. Under the Memorandum of Understanding signed between the companies on September 20, 2024, work was completed on coordinating the primary technical and commercial terms for exploration and development in the Shamakhi-Gobustan area, and agreements were reached. According to the basic agreement, MOL Group will hold a 65% share, and SOCAR will hold a 35% share in the project, with the Hungarian company acting as the operator.
On June 10, SOCAR and the German state-owned energy company SEFE (Securing Energy for Europe) signed a ten-year contract for the supply of natural gas. According to the document, gas volumes will be supplied by SOCAR to Europe for SEFE. The annual supply volume will gradually increase to 15 terawatt-hours (TWh), which is equivalent to approximately 1.5 billion cubic meters of natural gas. In October, SEFE said the implementation of a new agreement, without specifying the exact start date of supplies.
On June 21, SOCAR established corporate partnerships with one of the leading international organizations in quality management — the Chartered Quality Institute (CQI).
This cooperation will open up access for SOCAR employees to global expertise, advanced quality management methodologies used by leading international organizations, as well as opportunities for training and certification approved by CQI and the International Register of Certificated Auditors (IRCA). The partnership will create additional opportunities for enhancing the company's activities in areas such as social responsibility, industrial safety, environmental impact reduction, and internal capacity building.
On July 12, a memorandum of understanding was signed between SOCAR and the Syrian government.
On July 16, the joint venture SOCAR-KBR LLC, a partnership between SOCAR and the KBR company, received two contracts from bp for projects in Azerbaijan. One contract is for supporting the electrification project at the Sangachal terminal (STEL), and the other is for the compressor platform project at the Shah Deniz field (SDC). Under these contracts, SOCAR-KBR will provide detailed project design and procurement services for both projects.
On July 17, an agreement was signed between SOCAR’s Azerigas Production Union and Esyasoft Holding LTD (UAE) for the design, construction, and operation of an intelligent gas network. The main goal of the project is to improve operational efficiency in gas distribution in Azerbaijan, optimize costs, reduce existing gas losses, and improve customer satisfaction with services provided by Azergaz by using advanced smart gas management technologies.
The project will cover almost 14 years, including the installation of 2.5 million smart meters and system support stages. Investments amounting to $480 million are planned. These investments will enable the digitization of the network, installation of intelligent pressure and temperature sensors, creation of a Digital Solutions Lab, employee training, international experience exchange, AI implementation, cybersecurity through government cloud data storage, and establishment of a control center equipped with modern technologies.
Consumers will benefit from more accurate calculations, real-time usage monitoring, fast issue resolution, remote servicing, and easy access to consumer data via digital platforms.
On July 24, 2025, in Tashkent, a Product Sharing Agreement was signed between the SOCAR consortium, Uzbekneftegaz, and the Government of the Republic of Uzbekistan for exploration, development, and production in the Ustyurt investment blocks (Boyterek, Terengkuduk, Birgori, Kharoy, Karakalpak, and Kulboy).
In the initial phase, geological survey work will be carried out to determine prospective areas. During this period, SOCAR will act as the project operator. The agreement stipulates that geological survey work will be completed, and at least one exploration well will be drilled within the first five years.
On December 5, Uzbekistan and Azerbaijan launched a joint project for geological exploration and hydrocarbon extraction in the Ustyurt region. The activities of the Ustyurt Operating Company aim to strengthen the resource base, increase the effectiveness of geological exploration, and ensure the country’s long-term energy stability.
On August 2, a ceremony was held in the Turkish city of Kilis to mark the beginning of the transportation of Azerbaijani gas through Türkiye to Syria as part of a signed agreement between SOCAR and Syria. The first phase of the project plans to export 1.2 billion cubic meters of natural gas per year to Syria. The gas will be transported through the city of Kilis on the Turkish-Syrian border to power plants in Aleppo and Homs, where it will be used to generate electricity. This is expected to increase the total production capacity by 1,200-1,300 megawatts.
On August 4, SOCAR Marine, part of SOCAR Türkiye and operating in the field of maritime transportation, announced the launch of operations for buying and selling greenhouse gas emission quotas under the European Union Emission Trading System (EU ETS).
The new initiative aims to support ship owners, operators, and charterers in fulfilling their carbon reduction obligations when ships enter EU ports. Additionally, the company plans to expand the range of services offered, including trading in biofuels, providing services under the FuelEU initiative, and organizing joint "pooling" solutions.
On August 18, SOCAR and the Chartered Institute of Management Accountants (CIMA) signed a memorandum of understanding (MoU) to develop financial and management knowledge and skills, promote corporate governance, and accounting practices in line with international standards, and further strengthen SOCAR's financial functions. The project will include joint training programs, certification initiatives, and the exchange of expertise in relevant fields.
On September 6, SOCAR and Qatar's UCC Holding signed memoranda of understanding, envisaging long-term cooperation in the energy sector, including in Syria.
The memoranda cover cooperation across the entire energy value chain—from exploration and extraction of oil and gas to the development of transportation and storage infrastructure, refining and petrochemicals, and the trading and supply of crude oil, refined products, and aviation fuel. The agreements also include the construction of highly efficient gas turbine power plants.
The document aims to accelerate the recovery of the energy sector in Syria with the support of the governments of Azerbaijan and Qatar. It is crucial for the country’s overall development and includes modernization of its key energy infrastructure using advanced technologies and standards.
The second document secures SOCAR and UCC Holding’s cooperation in other countries and their joint projects on international energy markets.
On September 16, SOCAR and the world’s largest transportation company, Mediterranean Shipping Company (MSC), signed a strategic cooperation agreement.
As part of the agreement, the parties plan to strengthen Türkiye's position in the global supply chain by jointly investing in the region's largest container port—SOCAR Terminal. MSC's subsidiary and international port terminal operator, Terminal Investment Limited (TIL), will become a shareholder of SOCAR Terminal. This collaboration will integrate SOCAR Terminal into TIL’s extensive global network.
On September 23, SOCAR, Italiana Petroli S.p.A, and MIP S.p.A signed a tripartite agreement for the sale and purchase of shares.
The agreement foresees SOCAR acquiring 99.82% of the shares of one of Italy’s leading energy companies, Italiana Petroli (IP), from API Holding. The deal is expected to be finalized in the first quarter of 2026, pending completion of standard closing procedures and necessary regulatory approvals.
On October 2, SOCAR and Schlumberger signed a partnership agreement to accelerate the redevelopment of the Bahar and Gum-Deniz fields in the Caspian Sea.
The partnership includes the identification of prospective production zones, comprehensive reservoir modeling, as well as the design of drilling programs and wells to support the Early Production Scheme (EPS) at these fields. The project is a key part of SOCAR's long-term strategy to increase oil production and extend the lifespan of mature offshore assets. This initiative is aimed not only at ensuring operational efficiency and sustainability but also at developing practical scenarios to accelerate production.
On October 3, SOCAR and Uniper signed a cooperation program for 2025–2026.
On October 10, SOCAR’s Azneft Production Union, Kranji Solution, and MySep Pte signed a memorandum of understanding.
The document outlines plans to modernize separators used in oil and gas collection and transportation systems in Azneft’s structures. Additionally, 10 employees will undergo specialized training. As a result, separator design, troubleshooting, compliance checks, and capacity upgrades will be carried out by local specialists independently, minimizing risks of complications in collection and transportation systems.
On October 20, for the first time in the company's history, SOCAR launched an electronic version of the "Work Permit" system.
The system combines planning, risk assessment, and monitoring of work processes on a unified digital platform. This ensures full compliance with safety requirements, efficient use of resources, and prompt decision-making. The "Work Permit" system was first implemented electronically at SOCAR’s Absheronneft management unit within Azneft. The project is based on work control principles and ensures coordinated, controlled execution of all tasks in accordance with established rules.
Along with the launch of the electronic "Work Permit" system, mechanisms for energy system isolation (LOTO) were also updated.
On October 20, SOCAR, M-Gas, and the municipality of the Bulgarian city of Ruse opened the second facility within the Hybrid Gasification project. The "Prolet" kindergarten in Chervena Voda village, Ruse municipality, is now heated with environmentally friendly natural gas. This significant step marks the second phase of the long-term Hybrid Gasification of Public Buildings Project.
The project’s primary goal is to improve energy efficiency and reduce harmful emissions by 30% through replacing diesel fuel heating with cleaner natural gas. The kindergarten’s nearly 50-year-old heating system (from 1977) was entirely replaced with a modern, highly efficient one.
As a result of the modernization, M-Gas and its partners reduced heating costs by 50% and improved comfort for 180 children and staff members. The investments cover the full cycle of designing and building a compressed natural gas (CNG) installation, a new heating system, including a modern boiler house with two high-efficiency condensing gas boilers. The installed boiler remote control system will provide an additional 20% savings in natural gas.
On October 27, SOCAR and Uzbekneftegaz (Uzbekistan) signed a memorandum of understanding aimed at developing cooperation in the application of artificial intelligence in the oil and gas industry.
The partnership includes the implementation of SOCAR’s AI-based solutions, sharing expertise and specialists, offering consultation services in digital transformation, digitalization of production processes, and increasing efficiency, as well as in information technology.
The parties plan to carry out AI-based projects focused on boosting diesel fuel production by optimizing blending parameters, developing a Large Language Model (LLM) to support operational teams, and creating "Seismic AI" and ENOM solutions for automating geological and energy data analysis. Additionally, SOCAR will provide consultation on the ODLAR and Daily Drilling projects, which aim to create a unified information architecture connecting all company business processes and fully digitize and visualize seismic and drilling data.
On November 7, SOCAR and the Chinese Sinopec Engineering company signed a framework agreement for cooperation.
On November 12, SOCAR Green LLC, the Ministry of Energy of Azerbaijan, and China Datang Overseas Investment Co. Ltd. signed an agreement for the assessment, development, and implementation of a 100 MW solar power plant project in Azerbaijan.
On December 1, deliveries of Azerbaijani natural gas to private and industrial consumers in North Macedonia began. The supply was established thanks to productive cooperation between SOCAR, M-Gaz, and CNG Systems. This pilot project expands the virtual gasification initiative that started in Bulgaria in 2024.
The project, implemented in partnership between SOCAR, M-Gaz, and CNG Systems, began with the supply of compressed natural gas (CNG) to industrial and private consumers not connected to the pipeline or distribution network. SOCAR, through M-Gaz, ensures the required volume of natural gas for CNG Systems, which then supplies industrial and private consumers in Strumica. A gas distribution network has been built in the city, powered by compressed natural gas. As a result of this partnership, Azerbaijani natural gas is now used to heat and provide hot water to six kindergartens, eight schools, one hospital, several administrative buildings in Strumica, as well as more than 400 households and some industrial consumers.
On December 5, SOCAR and Qatar’s UCC Holding signed a Memorandum of Understanding for the supply of fuel to Damascus International Airport. According to the document, the parties plan to create a joint venture that will supply aviation fuel to Damascus International Airport and provide the necessary infrastructure. SOCAR will be responsible for the technical support of fuel supply operations and ensuring its timely delivery.
On December 10, an agreement was signed for the supply of natural gas between SOCAR and MVM ONEnergy, which will come into force on January 1, 2026.
On December 17, SOCAR and Hungarian MOL Group signed a product sharing agreement for exploration and production in the Shamakhi-Gobustan area. MOL Group will be the operator with a 65% share, and SOCAR will hold a 35% share. The project will begin with seismic surveys in early 2026, followed by drilling at a later stage.
On December 17, a memorandum of cooperation was signed between SOCAR's Complex Drilling Works Trust (CDWT) and Bahar Energy Operating Company (BEOC). The memorandum covers the extensive experience of CDWT in complex drilling works at the Bahar and Gum-Deniz fields.
On December 23, SOCAR signed a contract for the acquisition of the Gama Enerji İç Anadolu power plant (870 MW) in Türkiye for $225 million.
Structural changes
On August 5, the State Tax Service under the Ministry of Economy carried out the state registration of two companies—SOCAR Zone I and SOCAR BTBK—under SOCAR. Both companies have a legal form of limited liability companies (LLC) with a charter capital of 1,000 manat ($588) each.
On August 19, President of Azerbaijan Ilham Aliyev signed a decree regarding the implementation of the "Licensing and Permits" law and the regulation of related issues. According to the decree, SOCAR must, in accordance with the law, create separate legal entities for the transportation, distribution, storage, wholesale and retail sale, as well as import of gas, by January 1, 2027. These legal entities must implement progressive corporate governance principles, including the establishment of supervisory boards, and inform the head of state about this.
Expansion of the gas station network
On February 6, SOCAR opened its first gas station (GS) in Shusha city. The new GS, located on one of the busiest highways—the Shusha-Khankendi-Lachin road—is equipped with three fuel dispensers. The station offers RON-92, RON-95, RON-98 gasoline, as well as diesel fuel.
On December 30, SOCAR opened three new gas stations in Romania under the SOCAR brand.
These new stations, commissioned by SOCAR's Romanian subsidiary, SOCAR Petroleum SA, are located in the regions of Salaj, Suceava, and Satu Mare. As a result, the total number of SOCAR gas stations in the country reached 91. All SOCAR gas stations, including the new ones, offer Nano 95 and Nano 98 gasoline and Nano Diesel and Nano Super Diesel fuel.
By 2026, SOCAR plans to exceed 100 gas stations in Romania.
Ratings and forecasts from international rating agencies
In July, Moody's Ratings upgraded SOCAR's rating to investment grade, assigning a long-term issuer rating of Baa3, and withdrew the Ba1 corporate family rating, as well as the Ba1-PD probability of default rating.
"The upgrade of the sovereign rating is linked to the improvement in institutional effectiveness, supported by the long experience of maintaining macroeconomic stability amidst recent shocks and oil price fluctuations. Ongoing regulatory reforms have strengthened the stability of the banking sector, and the continued commitment to reducing the budget's dependence on hydrocarbon revenues enhanced fiscal resilience. Azerbaijan also made progress in economic diversification, aided by rapid growth in the transport sector. As a result, SOCAR’s operating and macroeconomic environment improved, and the state’s financial capacity to support the company, if necessary, increased, which is credit-positive for SOCAR," said the rating agency.
According to Moody’s forecasts, SOCAR will maintain proven reserves of 1.4 billion barrels of oil equivalent (BOE) in both 2025 and 2026.
Moody’s expects that SOCAR’s average daily production will be 269,000 barrels of oil equivalent per day (MBOE/d) in 2025, a decrease of approximately 2.2% compared to 2024. Production is expected to decline further by 1.9% in 2026, reaching 264,000 barrels per day. Overall, compared to 2020 (380,000 barrels per day), SOCAR’s production in 2026 (264,000 barrels per day) will be approximately 30.5% lower.
On November 13, S&P Global Ratings raised SOCAR’s long-term credit rating from BB- to BB, noting a significant improvement in the company’s financial policy transparency and disclosure level. The outlook for the rating is "Stable".
S&P stated that in recent months, SOCAR has shown significant progress in data disclosure and communication with rating agencies, improving the visibility of the company's performance indicators.
S&P raised SOCAR’s individual credit profile (SACP) rating from "b" to "bb-", which in turn led to a revision of the company's overall rating and its senior unsecured debt rating. The agency expects SOCAR to maintain a managed level of liquidity, supported by significant cash reserves, and to provide stable operational results, with the funds from operations (FFO) to debt ratio remaining above 12%.
According to S&P Global Ratings, SOCAR’s financial performance will maintain relative stability in the coming years, although there will be limited room for improvement. The agency expects SOCAR’s EBITDA from 2025 through 2027 to decline to 5.5-6 billion manat ($3.24–3.53 billion), compared to 6.7 billion manat ($3.94 billion) in 2024.
At the same time, operational cash flows (FFO) are expected to remain stable overall, due to reduced tax burdens and a slight decrease in interest expenses. This will allow SOCAR to maintain the FFO-to-debt ratio within the 12-15% range under the agency’s base scenario. According to the agency's estimates, SOCAR's adjusted debt under the S&P Global Ratings methodology will remain high—around 27.5-28 billion manat ($16.18–16.47 billion), despite moderately positive free operational cash flow (FOCF) of approximately one billion manat ($588 million).
Given that Upstream is the primary source of SOCAR's EBITDA and constitutes the core of its operations, S&P expects an increase in investments in the development of new fields or the expansion of existing projects. To reflect these expected investments, the agency includes about $3 billion manat ($1.76 billion) in capital expenditures annually in its base forecast, which is higher than the investment level of the past two years. S&P emphasizes that nearly completed projects such as Shah Deniz-2 and the Shah Deniz Compression project, signed earlier this year, demonstrate SOCAR’s ongoing efforts to increase production and strengthen its production capacity through further investments in the Upstream segment.
On November 24, Sustainable Fitch assigned SOCAR an ESG rating (Environmental, Social, and Governance) of 3 with an overall score of 41.
This result reflects the company’s average level of ESG performance, where its strengths—reliable risk management and emission reduction goals—are balanced by ongoing challenges in environmental impact, diversification, and corporate governance transparency.
On December 25, S&P Global Ratings revised its outlook for SOCAR’s credit rating from "Stable" to "Positive", confirming the rating at "BB".
This decision reflects the very high likelihood of state support for SOCAR and follows a similar improvement in the sovereign rating outlook for Azerbaijan.
S&P emphasized that the positive outlook is driven by several factors. First, the significant reduction in tensions between Azerbaijan and Armenia, amid progress toward a peaceful settlement and reduced defense spending in the 2026 budgets of both countries. These changes have reduced the risks of conflict renewal and, if maintained, are likely to support investor confidence and promote more sustainable medium-term economic growth through improved regional trade and transport links in the South Caucasus.
Plans until 2050
SOCAR is preparing to launch its largest seismic program in the company's history in 2026, to more accurately map reserves at mature fields.
By 2030, the company plans to completely eliminate routine flaring of associated gas and reduce the emissions intensity of its Upstream segment by 30%.
By 2035, SOCAR expects to achieve a 30% reduction in carbon intensity and reduce absolute emissions by 20%.
To implement these goals, SOCAR has developed three key strategies:
- decarbonization roadmap covering all of the company's operations;
- structural transformation and the creation of a dedicated segment for energy transition, ecology, and decarbonization;
- expanded international cooperation, including participation in global initiatives and systematic measurements of methane and carbon emissions.
By 2050, SOCAR aims to achieve net zero emissions.
Starting in 2026, SOCAR will implement a comprehensive digital emissions monitoring system across all operations. The company has already started cooperating with ENABLON and has purchased a monitoring, reporting, and verification system designed for accurate measurement and tracking of environmental performance.