BP Expands Operations in Azerbaijan with Major Investment Decisions

UK-headquartered energy giant BP has recently announced final investment decisions for several projects, marking a significant milestone in its operations. These decisions include the next phase of development for a massive natural gas field in the Caspian Sea, known as one of the world’s largest gas-condensate fields and BP’s largest gas discovery.

Through a series of agreements to expand its oil and gas interests in Azerbaijan, BP aims to unlock growth opportunities, increase production, and strengthen its partnership with the country and its national oil company, SOCAR.

The finalized investment decisions cover the next major phase of development for the Shah Deniz gas field, referred to as Shah Deniz Compression, as well as projects involving terminal electrification and solar power to reduce operational emissions.

Shah Deniz Compression Project

The $2.9 billion Shah Deniz Compression project is a crucial part of BP’s portfolio of major projects scheduled to commence between 2028 and 2030. This project aims to enhance resource recovery, extend production life, and access additional low-pressure gas resources from the Shah Deniz field. It is expected to contribute significantly to BP’s global upstream production targets for 2030 and beyond.

The construction activities for the Shah Deniz Compression project are set to begin later this year, with the first gas expected in 2029. The project partners include BP, Lukoil, TPAO, SGC, NICO, and MVM.

Renewable Energy Initiatives

BP’s commitment to reducing emissions is evident through the approval of the Shafag solar and Sangachal terminal electrification projects. These initiatives will enable the generation of renewable electricity, leading to a reduction in operational emissions in Azerbaijan.

The Sangachal terminal electrification project, in collaboration with multiple partners, is scheduled for completion in two stages by the end of 2028. The Shafag solar project, with ownership interests held by BP, SOCAR Green, and ABDF, is expected to be operational by mid-2027.

New Exploration Opportunities

BP has also secured access to new exploration and development licenses in Azerbaijan, furthering its commitment to long-term value creation and growth. The company will be exploring the Karabagh oil field and the Ashrafi-Dan Ulduzu-Aypara area, in addition to partnering with TPAO on the Shafag-Asiman block.

With a rich history of operations in Azerbaijan, BP has played a key role in developing major oil and gas fields in the region, including Azeri-Chirag-Deepwater Gunashli, Shah Deniz, and Sangachal.

“The agreements signed this week reflect our ongoing commitment to development and growth. We will continue to leverage our strong positions in regions like Azerbaijan and build on our relationships with government and industry partners,” commented Gordon Birrell, BP’s EVP Production & Operations.