September 11, 2015 – Fitch does not see financial problems for SOCAR in near future

Baku, Fineko/abc.az. The Fitch Ratings’ experts think that in the short-term prospect the State Oil Company of Azerbaijan (SOCAR) and the State Oil Fund of Azerbaijan (SOFAZ) will not have problems with fulfillment of obligations within international contracts amid strong decline in oil prices.

FR Senior Director for Natural Resources in Emerging Markets (EMEA) Maxim Edelson says that almost double reduction in the revenues of SOFAZ and SOCAR because of decline in world oil prices is not a threat to the fulfillment of their obligations within the strategic projects of Azerbaijan.

“Earlier this year SOCAR already carried out a large borrowing on the world market by placing bonds for $1 billion, and will not raise new large loans in the near future. The financial stability of SOCAR, which receives priority support from the state, does not cause concern,” Edelson said.

According to Fitch’s estimate, SOCAR’s total debt by the end of 2014 reached the figure comparable to AZN 5.8 bn.

In the structure of this debt, in particular, 79% accounts for borrowing in US dollars, 12% in manats, and 2% in euro.

On 28 February 2016 Fitch Ratings will present a new review on Azerbaijan, in particular, on SOCAR, and reminds us that sovereign ratings of the country and the state company are always at the same level.

Fitch also welcomes SOFAZ’s steps on diversification of the currency portfolio.

“The current year is difficult for predictions on situations on the currency markets of major countries of the world. Although, the collapse of the yuan, for example, was expected and is associated mainly with the accumulated problems in the banking system of China,” Edelson said.

http://abc.az/eng/news_10_09_2015_90670.html