Transparency initiative annual report

2.6. State participation in extractive industry

2.6.1. Background

The State Oil Company of Azerbaijan Republic (“SOCAR”) is an entity acting on behalf of the government to carry out its activities in the oil and gas industry.

SOCAR was established on the base of “Azerineft” State Concern and “Azerneftkimya” Production Association under Decree dated 13 September 1992 of the President of the Republic of Azerbaijan for the purpose of using oil reserves of Azerbaijan Republic in accordance with single public policy, improving structure of management in oil industry and ensuring development of oil and energy complex.Under the decree No.430, dated 22 December 2014 of President of the Republic of Azerbaijan amendments were made to the decree dated 24 January 2003 and full official name of the Company was specified as State Oil Company of Azerbaijan Republic and short name as SOCAR.

SOCAR functions in various sectors of oil, gas and petrochemical industry on the territory of Azerbaijan Republic and actively participates in the international market as well. SOCAR is an oil company engaging in exploration and development of oil and gas fields in the territory of Azerbaijan, production, refining of oil and gas and the sale of oil and gas and petrochemical products in domestic and foreign markets. In 2015, SOCAR had 52,104 employees (compared to 54,714 in 2014). SOCAR being the largest company in the country occupies an important place in the economy of the Republic of Azerbaijan.

Procurement procedures of SOCAR, outlined in “a collection of documents on the procurement and management of the organisation”, are carried out in accordance with the Regulations. The regulation came into force according to the Decree of the President of Azerbaijan Republic No.844, dated on 24 January 2003. ³⁴
SOCAR is an oil company engaging in exploration and development of oil and gas fields in the territory of Azerbaijan, production, refining of oil and gas and the sale of oil and gas and petrochemical products in domestic and foreign markets.
The “AzerGold” CJSC is an entity acting on behalf of the government to carry out its activities in the mining industry.
In 2015, “AzerGold” CJSC was established with the purposes of study, research, exploration, development, management of non-ferrous metal ore deposits in the country, including modernization of material-technical base, its efficient use and carrying out other activities related to the development of this industry. However, “AzerGold” did not function in that year.