TODAY.AZ / Business

SOCAR forecasts dividends from Shah Deniz

27 January 2020 [13:43] - TODAY.AZ

By Azernews

By Rasana Gasimova

SOCAR’s (Azerbaijan’s State Oil Company) dividends from the development of the Shah Deniz field and gas export through the South Caucasus Pipeline (SCP) are expected to range from $75.69 million to $195.22 million depending on oil prices, Azerbaijan’s Chamber of Accounts told local media.

With the oil price of $40 per barrel, SOCAR dividends from the development of the Shah Deniz field will be $28.39 million, with $50 per barrel - $ 88.18 million, and with $60 per barrel - $147.92 million. 

It was also noted that the company's dividends from the Baku-Tbilisi-Erzurum pipeline will amount to $47.3 million, regardless of oil prices.

As a result, at a price of $ 40 per barrel, SOCAR's total dividends on these two projects will amount to $75.69 million, at $50 per barrel - $135.48 million, at $60 - $195.22 million.

“At the same time, SOCAR will transfer 55 percent of these funds to Azerbaijan’s State Oil Fund. These payments are envisaged by the negotiation protocol signed by SOCAR, SOFAZ and the Finance and Economy Ministries on managing incomes of Azerbaijan’s State Oil Company, received as part of their cost-sharing in these projects,” the chamber said.

Thus, SOCAR payments to SOFAZ with an oil price of $40 per barrel will amount to $41.63 million, at $50 - $74.51 million, and at $60 - $107.37 million.

Shah Deniz gas field is the largest natural gas field in Azerbaijan. It is situated in the South Caspian Sea, off the coast of Azerbaijan, approximately 70 kilometers (43 mi) southeast of Baku, at a depth of 600 metres (2,000 ft). The field covers approximately 860 square kilometers (330 sq mi). Stretching out over 140 square kilometers, the reservoir is similar in size and shape to Manhattan Island.

The Shah Deniz field is operated by BP which has a share of 28.8 percent. Other partners include TPAO - 19 percent, SOCAR - 16.7 percent, Petronas - 15.5 percent, Lukoil - 10 percent and NIOC - 10 percent.

Currently, gas production from the Shah Deniz field is carried out from the Alfa platform as part of Stage 1 and from the Bravo platform as part of Stage 2.

Shah Deniz Stage 2 is a giant project that will add a further 16 billion cubic meters of gas per year to the approximately 10 billion cubic meters per year produced by Shah Deniz Stage 1.

The Southern Gas Corridor, a $40 billion worth project, envisages the transportation of gas to Turkey and Europe through the pipeline, which will be operated within the second stage of the Shah Deniz gas condensate field project in the Azerbaijani sector of the Caspian Sea.


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