BP Strengthens Azerbaijan Ties With Major Gas Project, New Exploration

BP PLC BP announced on Tuesday that it is advancing a major development phase for the Shah Deniz gas field in Azerbaijan and gaining access to new exploration blocks, strengthening its long-term partnership with the country and state oil company SOCAR.

The agreements, signed during Baku Energy Week, include the $2.9 billion Shah Deniz Compression project and linked solar and electrification initiatives at the Sangachal terminal to cut emissions and boost gas production.

BP, with a 29.999% stake in Shah Deniz, will install an unmanned compression platform to tap low-pressure gas reserves, adding about 50 billion cubic meters of gas and 25 million barrels of condensate, with production expected to start in 2029.

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The company also approved a 240MW solar plant in Azerbaijan’s Jabrayil district to supply power to the Sangachal terminal, reducing fuel gas use and operational emissions.

BP also secured operator rights with a 35% interest in two Caspian Sea blocks, including the Karabagh oil field and Ashrafi-Dan Ulduzu-Aypara area, while Turkey’s TPAO took a 30% stake in the Shafag-Asiman block, accelerating development after gas condensate was discovered in 2021.

BP has operated in Azerbaijan for over 33 years, leading major fields and export pipelines. Gordon Birrell, BP’s EVP of Production & Operations, said the company aims to grow upstream production to 2.3-2.5 million barrels of oil equivalent per day by 2030, partly driven by these projects.

The Shah Deniz Compression project is among eight to ten major developments BP expects to bring online between 2028 and 2030, supporting its growth and environmental goals. The exploration agreements also boost BP’s reserves replacement efforts, targeting near 100% replacement by 2027.

Investors may watch related stocks such as Exxon Mobil Corp. XOM and Chevron Corp. CVX, as well as ETFs like the Energy Select Sector SPDR Fund XLE and iShares Global Clean Energy ETF ICLN.

Price Action: BP shares are trading higher by 0.14% to $29.62 at last check Tuesday.

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