AZERBAIJAN: FOR SOCAR, BIGGER MEANS BETTER WITH AZERIGAZ TAKEOVER

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The Azerbaijani government’s recent decision to make state-owned gas distribution company Azerigaz part of the mammoth State Oil Company of the Azerbaijani Republic (SOCAR) signals that Baku wants to transform SOCAR into an "economic symbol" similar to Russia’s Gazprom or Kazakhstan’s KazMunaiGas, experts say.

Reasons for President Ilham Aliyev’s July 1 order remain hazy, however. No information was released that suggested that Azerigaz was losing money. The day before, at Azerigaz’s request, Azerbaijan’s Tariff Council had agreed to increase the consumer retail price of gas to a profit-making 100 manats ($124.36) per 1,000 cubic meters.

Some energy analysts had hoped that the takeover would mean greater efficiency at Azerigaz, a company of several thousand employees with a reputation for non-transparent management.