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SOCAR announces oil and gas production cost

SOCAR announces oil and gas production cost
© Report/ Elshan Baba

Baku. 3 September. REPORT.AZ/ Cost of oil produced by the State Oil Company of Azerbaijan Republic (SOCAR) in 2017 was AZN 111.42 / ton, while that of natural gas made AZN 62.19 per thousand cubic meters, relevantly up AZN 13.61 or 13.9% and AZN 15.42 or 33% in comparison with production costs in 2016, Report informs referring to the company's annual report.

According to the report, the share of material costs in overall production costs of oil in previous year constituted 3.1%, wages and salaries made 14.5%, social spending made 2.9%, amortization assignments  constituted 17.2%, repair costs - 6.9%, technical maintenance of primary resources - 12.1%, transportation costs - 16.4%, mining tax - 8.9% and etc.

The share of material costs in overall production cost of natural gas stood at 2.8%, wages and salaries at 8.4%, social insurance allocations at 1.7%, amortization assignments at 26.0%, repair costs at 5.9%, technical maintenance of primary resources at 10.5%, transportation costs at 15.7%, mining tax at 17.4% and etc. The cost of 1,000 cubic meters of marketable gas produced by the company increased by AZN 15.42 (33%) in comparison with 2016.

Along with expenditure for gas production on SOCAR, the factual cost of 1,000 cubic meters of gas sold on SOCAR in 2017 amounted to AZN 163.7, taking into account the cost, processing, storage and transportation of gas purchased from the Operating Company in accordance with the Production Sharing Agreement (PSA).

The report says that the production cost of oil grew as a result of growth in material costs, expenditures on fuel, electricity, salaries, social insurance, amortization of primary resources, capital repair and technical services, transport and other taxes. Thus, the material costs grew by AZN 785,000 (3.4%), expenditures on electricity by 2,310,000 (27.2%), fuel by AZN 142,000, salaries by 3,433,000 (3.2%), social insurance by AZN 551,000 (2.5%), amortization of primary resources by AZN 10,083,000 (8.3%), capital repair and technical services by AZN 64,188,000 (78.6%), transportation by AZN 7,708,000 (6.5%), other taxes by AZN 2,953,000 (8.1%).

Growth in production cost of natural gas was caused by an increase of material costs by AZN 580,000 (7.1%), AZN 1,116,000 (4.4%) in expenses on salaries, AZN 193,000 (3.8%) in costs for social insurance, AZN 6,287,000 (8.3%) in expenditures for amortization of primary resources, AZN 23,806,000 (85.1%) in expenses on capital repair and technical services, AZN 5,373,000 (12.1%) in transport costs, AZ 20,637,000 (60.4%) on mining tax, AZN 954,000 (9.0%) on other taxes and AZN 1,142,000 (10.3%) for costs of other services.  

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