SOCAR Targets $7 Billion Türkiye Petrochemical Push as Fitch Flags 2x Leverage

Azerbaijan's State Oil Company (SOCAR) is lining up a final investment decision by the end of 2026 on a petrochemical expansion in Türkiye valued at up to $7 billion, according to reporting published on 16 September. The project would deepen a position in which SOCAR has already invested a cumulative $19.5 billion in the Turkish market.

The company has finished preliminary engineering work and is moving into the full front-end engineering design (FEED) phase. It has signed a memorandum with engineering firm Technip for technical and economic studies. Kanan Mirzayev, cited in the report, put the investment at between $5 billion and $7 billion, so the final figure remains open until FEED is complete.

What the project builds on

SOCAR's Turkish footprint centres on two assets: the Petkim petrochemical complex, with annual capacity of 3.6 million tonnes, and the STAR Refinery, which can process 13 million tonnes of crude a year. The expansion is pitched as a push into higher-value manufacturing, with potential to cut Türkiye's polyethylene imports by about $1.5 billion.

Fitch: heavy spending, rising leverage

The scale of the plan sits against a Fitch Ratings assessment dated 15 September. Fitch expects SOCAR to invest around AZN 4 billion annually across 2026-2030. Key figures from the agency:

• EBITDA (after dividends to non-controlling interests) reached AZN 9.3 billion in 2025, up from AZN 5 billion in 2024, reflecting full-year consolidation of the Southern Gas Corridor and STAR refinery.
• EBITDA net leverage is projected at about 1.0x in 2026, rising to roughly 2x by 2029.
• SOCAR held AZN 14 billion in cash at end-2025 and has repaid or refinanced AZN 14.2 billion of debt during 2026.
• Dividends and distributions to the state are projected to average AZN 1.8 billion a year through 2030, while SOCAR supports Petkim with about AZN 250 million annually through 2027.

Fitch also expects the decline in SOCAR's production to stabilise from 2028.

Market backdrop

Crude prices remain elevated. Azeri Light (CIF) averaged $121.75 a barrel in the week of 28 September to 2 October, up 0.6% on the week, while Dated Brent averaged $123.52, according to Trend's weekly review.

Implications

For investors, the sequence matters: FEED will define cost, partners and financing, and the year-end decision will show how SOCAR balances a multi-billion-dollar downstream bet against Fitch's projected rise in leverage. Higher-margin petrochemicals would diversify earnings beyond crude and gas sales, but no financing structure has been disclosed.

Further Reading

• TotalEnergies, SOCAR and XRG Sanction Absheron Gas Field Expansion
• Azerbaijan Investment Forum Nets $10.8 Billion in Signed Agreements