Energy
SOCAR Capex Seen at AZN4bn a Year as $7bn Petkim Decision Looms in Türkiye
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Min
Azerbaijan's state energy company SOCAR is set to spend around AZN4 billion a year on capital projects between 2026 and 2030, according to a Fitch Ratings assessment published on 15 September 2026. The agency expects leverage to stay low in the near term, but to climb as earnings from a maturing upstream portfolio ease.
Fitch put SOCAR's 2025 EBITDA, after dividends to non-controlling interests, at AZN9.3 billion, up from AZN5 billion in 2024. EBITDA net leverage was a low 1.0x last year and is forecast to stay near that level in 2026, when EBITDA is projected at about AZN12 billion. The agency then sees earnings falling to roughly AZN7.5–8 billion in 2028–2029 as production declines, pushing leverage to about 2x by 2029. It expects the output decline to stabilise from 2028.
The balance sheet is liquid but carries heavy near-term obligations. At end-2025 SOCAR held about AZN14 billion in cash and equivalents plus around AZN1.5 billion of marketable securities, against short-term debt of AZN15.1 billion. Fitch estimates AZN14.2 billion of debt will need to be repaid or refinanced in 2026. Government dividends and distributions are forecast to average AZN1.8 billion a year over 2026–2030, and SOCAR is expected to provide about AZN250 million annually to its Türkiye petrochemical unit Petkim through 2027.
Petkim is also at the centre of the company's largest pending decision. A master plan for the Aliaga complex, with an investment range of $5–7 billion under consideration, completed preliminary front-end engineering work in July, according to The Arabian Post. SOCAR management is expected to take a final investment decision by year-end. Fitch has left the project out of its base-case forecasts until details are finalised. SOCAR's cumulative investment in Türkiye stands at $19.5 billion, and the plan could cut Türkiye's polyethylene imports by around $1.5 billion, the report said. Petkim currently has 3.6 million tonnes of annual production capacity, while the STAR Refinery processes 13 million tonnes of crude a year.
For investors, the picture is of a strong cash position funding a sizeable investment programme while upstream earnings plateau. The assessment, reported by Trend, suggests the Petkim decision is the main swing factor: approval would lift capex and leverage above Fitch's base case, while a delay would keep the balance sheet comfortable but leave Türkiye downstream growth on hold.
Fitch's numbers also underline why Baku is pushing downstream and gas-export expansion. As oil output from mature fields declines, SOCAR's earnings will rely more on gas, refining and petrochemicals abroad, and on the dividends it can sustain for the state budget. The year-end decision will show how aggressively management intends to make that shift.
The combination of heavy refinancing needs and a large discretionary project makes timing important. With AZN14.2 billion of debt due for repayment or refinancing this year and cash of AZN14 billion at end-2025, SOCAR's liquidity is adequate but not unlimited, and any decision to commit several billion dollars to Petkim will be weighed against its refinancing calendar, its dividend obligations to the state and the pace at which upstream earnings decline after 2027.
