BAKU, Azerbaijan, October 10. Azerbaijan is one
step ahead by having invested in the critical oil and gas
infrastructure, says Wood Mackenzie.
“Azerbaijan not only ranks as a sizeable oil and gas producer in
global terms but, importantly, is ahead of the game having invested
in critical infrastructure to export its oil and gas from the
landlocked Caspian Sea. Its upstream industry, more than a century
old, rose to global significance early this millennium with the
development of BP’s giant offshore Azeri-Chirag-Gunashli (ACG) and
Shah Deniz projects,” the research and consulting firm said in its
latest analysis.
Wood Mackenzie notes that ACG and Shah Deniz drove total
production to 1.2 million boe/d by 2010, with oil accounting for
80% of the output. Production has remained broadly stable since
then and, according to the firm’s forecasts, is expected to stay at
this level until the late 2030s, supported by Phase 2 of
TotalEnergies’ Absheron gas project, which reached the Final
Investment Decision last month.
“Gas has become the growth story, comprising about 60% of
production in 2026,” reads the analysis.
Wood Mackenzie analysts note that Azerbaijan’s state oil company
SOCAR is a significant investor in all upstream projects.
“The government is also aiming to attract more investment
offshore as well as onshore where ExxonMobil has a licence to
explore a large unproven shale play. Azerbaijan’s refining capacity
is focused on meeting domestic fuel demand. The construction of
major export pipelines opened the Southern Corridor, connecting
Azerbaijan’s oil and gas supplies to wider markets beyond the
Caspian. The 1.2 million b/d BTC oil pipeline (2005) transports
mainly Azerbaijani crude to the Mediterranean port of Ceyhan. Even
topped up with volumes shipped across the Caspian from Turkmenistan
and Kazakhstan, BTC is substantially underutilised. The TANAP
(2018) and TAP (2020) gas pipelines carry Azerbaijani gas through
Georgia and Türkiye and on to the European gas network via Greece
and Italy,” reads the analysis.
Meanwhile, Azerbaijan produced 17.692 million metric tons of
crude oil, including gas condensate, from January through August
2026, according to the State Statistics Committee. Marketable crude
oil accounted for 17.648 million metric tons of the total.
During the same period, Azerbaijan exported 14.678 million
metric tons of crude oil and petroleum products derived from
bituminous minerals, valued at $9.282 billion, according to the
State Customs Committee.
Natural gas production totaled 33.4 billion cubic meters in
January-August 2026, while exports of natural gas in gaseous form
amounted to 16.37 billion cubic meters, worth $5.7 billion,
according to the State Statistics Committee.
