BAKU, Azerbaijan, September 15. Fitch Ratings
has affirmed the State Oil Company of the Azerbaijan Republic’s
(SOCAR) Long-Term Issuer Default Rating (IDR) and senior unsecured
rating at ‘BBB-’, with a Stable Outlook on the IDR.


The ratings are aligned with Azerbaijan’s sovereign rating of
‘BBB-/Stable’ under Fitch’s Government-Related Entities (GRE)
Rating Criteria, reflecting the Azerbaijani government’s strong
support for SOCAR.


According to Fitch, this support is provided through financial
guarantees, cash contributions and equity injections, while SOCAR
also performs important social functions and serves as a key state
vehicle for developing oil and gas projects.


At the same time, Fitch upgraded SOCAR’s Standalone Credit
Profile (SCP) to ‘bb’ from ‘bb-’, citing improved leverage
metrics.


“SOCAR’s standalone profile remains solid, supported by
favourable hydrocarbons prices, reducing the immediate need for
support,” Fitch said, adding that it nevertheless expects the
Azerbaijani government to provide direct support to the company if
necessary.


Fitch noted that the Azerbaijani government exercises
significant control over SOCAR’s operations, financial performance
and strategic decisions, demonstrating “robust oversight.” The
agency also highlighted the government’s track record of providing
substantial support, including capital injections and debt
guarantees.







According to SOCAR, state guarantees covered 25% of its debt at
the end of 2025 following the consolidation of Southern Gas
Corridor (SGC). Fitch said the ratio had historically been
significantly lower, at 4% at end-2023, and estimates it fell to
around 12% following the repayment of SGC eurobonds.


Fitch said SOCAR’s standalone profile reflects its mid-scale oil
and gas production, integrated business model and strong financial
position, while also taking into account corporate governance
limitations.


The agency underscored SOCAR’s strategic importance to
Azerbaijan as an oil and gas producer, a supplier of refined
products to the domestic market and a participant in major energy
projects, including the SGC, which are critical to the country’s
energy security.


SOCAR also holds stakes in and represents the Azerbaijani
government in several oil and gas joint ventures that are important
to the country’s hydrocarbon production.


Fitch described SOCAR as Azerbaijan’s largest employer and
taxpayer, as well as the government’s principal vehicle for
developing the country’s oil and gas industry.