SOCAR expects oil prices between $65-$75

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Azerbaijan's state energy company SOCAR expects oil prices to hold steady in the range of $65-$75 per barrel over the next two years, SOCAR Head Rovnag Abdullayev told journalists on July 22.

He noted that the price of oil depends more so on political factors rather than economic.

"There is a certain level, below which the oil price can not fall. The price of major part of oil extracted in the world exceeds $50 per barrel; therefore the decrease in its price below this limit makes a big problem for oil exporting countries," Abdullayev noted. "The cost of the Azerbaijani oil is lower, so such low prices do not create problems for us."

The average price of oil was about $65 per barrel in the first half of 2015, though it is preferable for Azerbaijan if it hovers above $70 per barrel.

Oil exports resume via Baku-Novorossiysk

The SOCAR head went on to add that the Baku-Novorossiysk pipeline has resumed operation on July 22.

"The reason for the suspension of pumping of oil via this pipeline in June was repair works conducted at the Baku refineries," he said.

"As a result, we have formed some oil reserves, part of which was diverted via the Baku-Tbilisi-Ceyhan pipeline. Currently, all the pipelines are in working order. We can export any amount of oil via any of our routes. Since today we will resume pumping via the Baku-Novorossiysk pipeline, this year we are planning to pump 1.5 million tons of oil via this pipeline," Abdullayed noted.

SOCAR exported 678,050 metric tons of oil via the Baku-Novorossiysk pipeline in January-June 2015, some 33.4 percent more than in the same period of 2014 (508,220 metric tons).

The company did not export any oil from Novorossiysk in June of this year, however, 84,580 metric tons of oil was pumped in June 2014.

SOCAR exported 932,160 metric tons of oil via the Baku-Novorossiysk pipeline in 2014, compared to 1.75 million metric tons in 2013.

SOCAR ships the oil produced at its own fields, as well as the oil of joint ventures and companies operating at Azerbaijan’s onshore fields through Novorossiysk pipeline. Oil is delivered to the port via the Baku-Novorossiysk pipeline, operated by SOCAR.

SOCAR and Russian Transneft signed an agreement, whereby SOCAR will transport 1.7 million metric tons of its oil produced independently onshore and offshore via the Baku-Novorossiysk pipeline in 2015.

Petkim's share price increases

Abdullayev also said Petkim Petrochemical Holding's share price has grown several times on the market.

"Petkim's shares increased from 1.8 to 4.35 Turkish liras," he said. "So we want to sell part of the shares. This is a normal process."

SOCAR bought 10 percent of Petkim's shares from the state and part of the shares from the market. Currently, SOCAR owns 61.32 percent of shares of the Petkim PetroKimya Holding which is the biggest assets of SOCAR in Turkey.