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SOCAR: If manat continues to devalue, weâ€™ll apply to relevant bodies - UPDATED

SOCAR: If manat continues to devalue, weâ€™ll apply to relevant bodies - <span style="color: red;">UPDATED

17 January 2017 09:31 (UTC +04:00)

“We were meeting demand for natural gas from three sources. As you know, the domestic demand is met by SOCAR’s production and purchase and import of natural gas from partners of Production Sharing Agreements”, the Vice-President said.

According to him, SOCAR faces loss due to manat devaluation and it’s possible to prepare any mechanism in the future while conducting any operation in order to meet the demand for natural gas: “Taking into account the floating regime, the issue of preparation of relevant mechanism of payment for gas purchased in dollar is on the agenda. However, no negotiations are underway in this regard. If manat continues to devalue, we’ll apply to the relevant bodies”.

*** 11:31

SOCAR continues its operations successfully abroad and inside the country. Oil price decline and manat devaluation caused us to end 2015 on loss, SOCAR Vice-President Suleyman Gasimov said.

According to audited six-month financial statements of 2016, SOCAR’s profit made up $550 million in the reporting period: “Taking into account the sale of natural gas cheaper than its base price as a result of devaluation, the Tariff Council increased the price of natural gas. In order to reduce the impact of price rise on the population, the limit of 1,500 m³ was increased to 1,700 m³.All these prevented price rise to have impact on the majority of subscribers. Rise of gas price led to increase of SOCAR’s revenues. Because, we were buying gas at least half of production from the partners of the Production Sharing Agreement in dollar. Therefore, our loss from domestic sale of goods purchased before devaluation was covered by crude oil sale. However, decline in oil price and manat devaluation made us apply to the state bodies to increase the gas price. Price of gas for Azerenergy stood at AZN 120, for Nakhchivan at AZN 75, for main commercial organizations at AZN 200 and for population consuming 1,700 m³ in a year at AZN 100. Our risks increase when the the manat rate against dollar changes. Difference from purchase of natural gas will have negative impact on our financial results. But we hope SOCAR’s profit will stay at AZN 550 million”.