The cost of production of 1 thousand cubic meters of gas at SOCAR fields increased by 5.5%

The cost of gas production at the fields of the State Oil Company of Azerbaijan (SOCAR) in 2024 increased by 5.5% compared to 2023 - to 80.25 manats per 1,000 cubic meters.

This is reported by Report with reference to the company's annual report on the results of activities in 2024.

In the cost structure, the share of material costs was 2.6%, fuel expenses - 0.3%, electricity - 0.4%, wages - 13%, social insurance contributions - 3%, depreciation of fixed assets - 17%, repair and maintenance of fixed assets - 13.4%, transportation costs - 13.1%, security expenses - 2.3%, subsoil tax - 16.2%, other taxes - 4%, other services expenses - 12.2%, other expenses - 2.4%.

According to the document, excluding the subsoil tax, SOCAR's production cost of 1,000 cubic meters of gas last year was 66.08 manats (an increase of 6.4%).

The increase in the cost of gas is mainly due to a decrease in commercial gas production compared to the previous year. Commercial gas production amounted to 700 million 738 thousand cubic meters, which is 13.1% less than in 2023.

In addition to the company's gas production costs, taking into account other company expenses, including gas processing, storage, transportation, and gas purchases from JSC "Azerkontrakt", SOCAR's actual expenses for selling 1,000 cubic meters of gas in 2024 amounted to 176.82 manats (in 2022 - 178.65 manats).

According to the report, as of January 1, 2025, SOCAR's production well stock consists of 7,610 wells (including 129 gas wells), including 5,715 active wells (including 83 gas wells).

As reported, actual gas production by SOCAR in 2024 reached 7 billion 718.1 million cubic meters (a decrease of 7%), including 5 billion 362.7 million cubic meters (-10.9%) for the "Azneft" PU, and 2 billion 355.4 million cubic meters (-0.6%) for joint ventures and operating companies developing onshore fields.