Socar's Gas Production Costs Rise
The cost of natural gas production from fields owned by Azerbaijan’s state-run Socar rose 6.8% in 2015 year-on-year, it said in its annual report.
In the cost structure, salaries took 9.9% of the total, social security was 2%, depreciation was 31.1%, repairs and services 9%, technical services 1.8%, materials 3.5%, subsoil tax 14.9%, transportation costs 7.2%, and other expenses the remaining 10.6%.
According to the report, gas production by Socar's gas production unit Azneft declined by 4% to 6.146bn m³ in 2015, compared with 2014.
Azneft's costs
|
|
Production (Bn m³) |
Cost (AZN*/'000 m³)
|
|
2012 |
6.525 |
33.71 |
|
2013 |
6.573 |
38.02 |
|
2014 |
6.399 |
37.19 |
|
2015 |
6.146 |
39.74 |
- The official rate of AZN was $1.25, but the figure plunged to $0.55 in late 2015 owing to two sharp devaluations in a year and currently stands at about $0.58
This year, according to the recent appeal by Socar to the Tariff (Price) Council of Azerbaijan on raising domestic gas prices by 80%, the cost of gas accounted for more than a fifth of the total, at AZN 50. The increase in the cost of production is also affected by the fact that in the current year Azneft expects its gas production to be about 5.65bn m³, 8% less than 2015.
Azerbaijan desk