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.