Country announces speedy preparations for Socar’s partial privatisation as presidential election approaches
Оригинальный текст опубликован на сайте «Upstream», 31 January 2024 4:01 GMT . Автор: Материал доступен по .
Azerbaijan’s state owned oil and gas producer Socar is to be partially privatised under surprise plans announced by the government ahead of snap presidential elections to be held on 7 February.
The plans, which also involve Socar’s downstream and petrochemical subsidiaries, mark a reversal of government policy.
Metin Eynullayev, head of the country’s state property agency, announced on Tuesday that the government is preparing terms for the sale this year of minority stakes in Socar and the subsidiaries, together with state-run enterprises from other industries.
Eynullayev referred to a decree signed at the end of the last year by Azerbaijan’s long-serving President Ilham Aliyev, instructing the agency to submit detailed proposals on how Socar and other state-owned companies could be privatised to help attract foreign investments.
The government has to draft the proposals within the next nine months, Eynullayev was quoted as saying by Baku-based news agency Trend.
The Azerbaijan government wholly owns Socar, which has always been designated as a vehicle for representing state interests in the country’s foreign-led oil and gas developments.
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Previous claims that the state would ever look to reduce its shareholding in the company have until now always been met with strong denials by senior government officials.
Eynullayev said that, as well as Socar’s main oil and gas business, foreign and domestic investors will be offered stakes in the company’s downstream subsidiaries, such as a methanol plant and its polymers and petrochemical manufacturing units.
The government has set ambitious goals to expand Socar involvement in pipeline and liquefied natural gas deliveries, as well as oil products distribution and retail operations on foreign markets.
It has also instructed the company to increase its existing shareholdings in the country’s large foreign-led developments and operate several smaller fields on its own.
Socar is due to become the largest shareholder in Azerbaijan’s leading oil and gas development — the Azeri-Chiraq-Guneshli project — later this year with a stake of 32%, after finalising a deal to buy Norwegian major Equinor’s shareholding in the scheme.
The project is operated by UK supermajor BP, which holds a stake of more than 30% in the development.
One long-term Azerbaijan oil and gas sector insider suggested that government authorities have been quietly preparing Socar for privatisation since 2021, by replacing long-serving industry heavyweights at the company’s top positions with younger technocrats more willing to follow state orders.
However, a partner at Baku-based energy consultancy Ilham Shaban said the government has decided to reduce its stake Socar and other key industry sectors in an effort to help create a larger number of privately held companies and increase “efficiency and competition” throughout the nation’s economy.
Just one Azeri-owned privately held producer currently operates in the country, he noted.
Another factor behind the privatisation decision could be the government’s aim to reduce direct and indirect state subsidies for the country’s energy sector, and the upcoming liberalisation of its electricity market away from state regulation, Shaban added.