The Cost of Gas Production at SOCAR Fields in 2022 Increased By 10%
The cost of gas production at the fields of SOCAR (State Oil Company of Azerbaijan) in 2022, compared to 2021, increased by 10.35% – to 67.57 manats ($39.74 at the current exchange rate) per 1 thousand cubic meters.
Such data are provided in the company’s annual report for 2022, published on the SOCAR website.
In the cost structure, the share of wages was 12.4%, material costs – 2.5%, social insurance contributions – 2.8%, depreciation charges – 14.1%, repair fixed assets – 4.9%, expenses for maintenance of fixed assets – 10.8%, transportation costs – 12.4%, subsoil tax – 19.1%, security costs – 2%, the rest – other expenses.
As reported by Interfax-Azerbaijan, according to the document, excluding the subsoil tax, the cost of production by SOCAR of 1 thousand cubic meters of gas in 2022 amounted to 53.72 manats (an increase of 9.39%).
The increase in the cost of gas production for the company in 2022 is due, in particular, to an increase in costs for: fuel (by 36.1%), wages (by 22.6%), social insurance (by 19.4%), depreciation expenses ( by 9.5%), repairs of facilities (17.3%), maintenance of fixed assets (by 6.2%), transportation costs (5.4%), security costs (by 25.5%) and other expenses ( by 31.7%).
In addition to the company’s expenses for gas production, taking into account other company expenses, including gas processing, storage, transportation and the purchase of gas from Azerkontrakt OJSC, SOCAR’s actual expenses for the sale of 1 thousand cubic meters. m of gas in 2022 amounted to 165 manats (in 2021 – 121.9 manats).
According to the report, gas production by SOCAR in 2022 amounted to 8 billion 70 million cubic meters (an increase of 2.7%). At the same time, the share of the Azneft production association (SOCAR’s oil and gas production structure – IF) accounted for 6 billion 478.1 thousand cubic meters, the share of joint ventures and operating companies developing onshore fields – 1 billion 591.9 million cubic meters.
