BMI View: The postponement and scaling back of the State Oil Company of Azerbaijan Republic ( SOCAR ) 's Oil and Gas Processing and Petrochemical Complex (OGPC) underlines the country ' s struggle to develop downstream industries that add value to its considerable energy resources. The manat's depreciation, a collapse in oil prices and high costs of external financing due to Azerbaijan's junk credit rating in Q116 have combined to undermine the plans. Other projects involving polymer expansion and new fertiliser plants also look set to be delayed.
The country has been burdened with ageing plants and its downstream is vastly underperforming. Utilisation rates for the country's refineries have averaged around 30%. SOCAR has ambitions to significantly improve utilisation, refining increased volumes of Azeri crude domestically. However, a key problem has been the lack of demand. More than half of Azerbaijan's refined fuels are consumed internally and domestic consumption growth has been slow. Export markets also remain limited, due to the low quality of Azeri fuels.
Azerbaijan is aiming to raise its fertiliser exports to 1mn tpa. A fertiliser project is planned in Karadagh with capacities of 255,000tpa ammonia and 500,000tpa urea. Construction was due for completion by end-2016. However, a dearth of progress reports in recent quarters has prompted us to remove the projects from our forecasts.
The SOCAR Polimer PP plant with 200,000tpa capacity, planned for the Sumgayit Chemical Technology Park in Azerbaijan, is scheduled to start production in 2018. A 100,000tpa polyethylene plant is also likely to come onstream at the same time.
Azerbaijan's Petrochemicals Risk/Reward Index score has declined 0.9 points this quarter to 31.7, due to a significant decline in the rewards score as a result of the postponement of planned petrochemicals capacity, as well as the downgrading of market risk scores as a result of a deteriorating investment environment for petrochemicals. This pushes it further behind Ukraine in our Europe ranking.
The Azerbaijan Petrochemicals Report has been researched at source, and features BMI Research's market assessment and independent forecasts for key petrochemicals sub-sectors. The report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing companies by products and services, sales, market share, investments, projects, partners and expansion strategies.
BMI's Azerbaijan Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Azerbaijani petrochemicals industry.
- Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the Azerbaijani petrochemicals market.
- Target business opportunities and risks in the Azerbaijani petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Azerbaijan.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis, covering the petrochemicals markets, regulatory changes, major investments, projects and company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the petrochemicals sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:
- Energy: Oil production (‘000 b/d), oil consumption (‘000 b/d), net oil exports (‘000 b/d), gas production (bcm), gas consumption (bcm), net gas exports (bcm), oil refinery capacity (‘000 b/d).
- Petrochemicals: Ethylene capacity (‘000 tpa), ethylene production (‘000 tpa), ethylene consumption (‘000 tpa), polyethylene capacity (‘000 tpa), polypropylene capacity (‘000 tpa), polyvinyl chloride capacity (‘000 tpa), polyolefins consumption (‘000 tpa).
- Oil Products Prices: Price forecasts for all major oil-based products (USD/bbl) at major global energy trading hubs.
- Economic: Nominal GDP (USDbn), real GDP growth (%), GDP per capita (USD), population (mn), unemployment (%), exchange rate (against USD).
BMI’s Petrochemicals Risk Reward Index
BMI’s Risk Reward Indices provide investors (both corporate and financial) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
Structure, size and value of the industry sector; overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments.
Industry Trends & Developments
Evaluation of company and sector-wide developments, including key projects (as well as expansion plans), latest company financial details and proposed international ventures.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
Global & Regional Market Overview
Analysis of the key trends driving the global industry, including worldwide output/capacity and demand analysis across ethylene, polyethylene, polyvinyl chloride, polystyrene, polyethylene terephthalate and polypropylene. The regional analysis looks at the implications of local and global trends on specific company activity.
Sub-sectors covered by the Petrochemicals Reports include:
Oil & Gas, Oil Refining, Olefins (ethylene, propylene), Polyolefins (polyethylene, polypropylene), Polyvinyl Chloride, Polystyrene
Please note – not all country Reports cover all sub-sectors – see website for details.
The Petrochemicals Market Reports are based on a network of primary sources, such as multilateral organisations (ACC, APLA, Cefi c, ICCA, ICMA), national chambers of commerce and industry, national statistical offi ces, government ministries and central banks, and multinational companies.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.