Azeri SOCAR to Reduce Spending in 2016 Due to Low Oil Prices

Reuters

BAKU, Dec 15 (Reuters) – Azeri state energy company SOCAR plans to cut spending next year due to lower oil prices and introduce changes in the way its overseas offices operate, it said on Tuesday.

"The company plans to reduce its spending on transport, communication, sponsorship projects as well as spending on organising conferences, trips, and to strengthen control over capital expenditure in oil and gas production projects," SOCAR said in a statement.

SOCAR officials say that if oil prices fall below $35 per barrel from about $38 now the company will be forced to "tighten belts".

"We are not afraid of it ... average production cost of oil for SOCAR is $15 per barrel, and the bulk of oil produced by SOCAR is used for domestic consumption and sold at a fixed price," a senior SOCAR official, who declined to be named, told Reuters.

Azerbaijan based its state budget for 2016 on an estimated oil price of $50 per barrel, down from $90 this year.

SOCAR also said it planned to make some changes in the way its offices abroad work but did not give any details.

(Reporting by Nailia Bagirova; writing by Margarita Antidze; editing by Vladimir Soldatkin and David Clarke)

 

Copyright 2016 Thomson Reuters. Click for Restrictions.

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