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Azerbaijan Overview


in figures

Oil reserves7 billion barrels

Oil production795,000 bopd

Gas reserves2.1 tcm

Gas production18.8 bcm

Azerbaijan: The Historical Energy Powerhouse

Azerbaijan is one of the world’s oldest oil-producing countries and is a crucial oil and gas supplier in the Caspian Sea region. Its largest hydrocarbons basins are located offshore in the Caspian Sea. State-run SOCAR is responsible for negotiating and signing the PSCs that govern the country’s oil and gasfield development. BP is the largest foreign investor in Azerbaijan and has been operating there since 1992. In December 2016, it signed a letter of intent with SOCAR that will see the company commit to the further development of the Azeri-Chirag-Guneshli (ACG) oilfield until 2050, 26 years beyond the duration of the existing 30-year PSA signed in 1994.

Although Azerbaijan has historically been an oil producer, its significance is growing as a gas producer and exporter. The Shah Deniz field is one of the world’s largest gas and condensate fields and accounts for the majority of Azerbaijan’s natural gas reserves. Operated by BP, Shah Deniz is located 70 kilometres southeast of Baku in water depths of up to 1,600 metres and has approximately 1 tcm (35.3 tcf) of gas in place. The first gas started to flow in 2006. In June 2018, the Shah Deniz Stage 2 project commenced production. Stage 2 is expected to reach a plateau output of 16 bcm (530 bcf) per year along with 120,000 boepd of condensate.

Azerbaijan held proven gas reserves of 2.1 tcm (74.2 tcf) as of end-2018 and produced 18.8 bcm (664 bcf) that year. Exports and oil and gas production are key to Azerbaijan’s economy. According to IMF data, oil and gas constitute more than 90% of the country’s exports.

While Shah Deniz is the current star, Total’s Absheron field also has a promising future. In November 2016, Total and SOCAR announced they had signed an agreement for the project’s first development phase.

Work is also underway on the Southern Gas Corridor, which consists of the South Caucasus, Trans-Anatolian and Trans Adriatic pipelines, and will be ready to transport Shah Deniz gas via Georgia, Turkey, Greece, Albania and on to Italy and the rest of Europe by 2020.

All of the latest developments are covered in the new edition of The Oil & Gas Year Azerbaijan series, currently under production.

Lukoil invests $2.2 billion in Azerbaijan’s Shah Deniz
Azerbaijan - October 08, 2021

Lukoil has agreed to acquire an additional 15.5% interest in the offshore Shah Deniz project in Azerbaijan’s Caspian Sea for…

Masdar in $200-million Azerbaijan solar deal
Azerbaijan - April 08, 2021

Abu Dhabi-based renewable energy giant Masdar has signed a deal worth around USD 200 million to develop a utility-scale solar PV…

TANAP pipeline could carry hydrogen to Europe
Azerbaijan - February 18, 2021

Hydrogen could be transported to Europe using one-fifth of the capacity of the Trans-Anatolian Natural Gas Pipeline (TANAP), a SOCAR official has said.

Speaking at…

Oil down despite US stimulus optimism
Multinational - September 29, 2020

Oil was down on Tuesday morning in Asia. Prices rose in late trading during the previous session as the US Congress appeared closer to agreeing a stimulus package,…

Oil down on Covid-19 rise
Multinational - September 28, 2020

Oil was down on Monday morning in Asia as Covid-19 infection rates in the US threaten a recovery in demand. Crude oil is likely to have its first monthly fall since the…

BP greenlights $6-bln Azerbaijan investment
Azerbaijan - April 19, 2019

A BP-led development in Azerbaijan’s Caspian Sea waters will see a USD 6-billion investment, SOCAR announced on Friday.

The investment at the Azeri-Chirag-Guneshli…

Andrea CATTANEO, CEO and President of ZENITH ENERGY
Azerbaijan - January 4, 2019

Andrea Cattaneo, CEO and president of Zenith Energy, talks to TOGY about Azerbaijan’s onshore upstream sector and the opportunities it offers to junior players. E&P…

Imanverdi HASANOV, General Manager of BAKU SHIPYARD
Azerbaijan - December 6, 2018

Imanverdi Hasanov, general manager of Baku Shipyard, talks to TOGY about the shipyard’s ongoing and targeted projects, its expansion strategy in the region and the…




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