Azerbaijan

Azerbaijan in one paragraph

Azerbaijan is a mid-sized oil producer whose output is in managed decline and whose gas output is holding near capacity. Its oil comes overwhelmingly from one offshore complex in the Caspian Sea, Azeri-Chirag-Deepwater Gunashli (ACG), and its gas from one field, Shah Deniz. Both are operated by bp, which publishes platform-level production twice a year. That makes Azerbaijan one of the few producers where the national trend can be read almost directly from operator disclosures. This page uses bp's Azerbaijan business updates for 2022 to the first half of 2026, cross-checked against the U.S. Energy Information Administration (EIA). Azerbaijan's national statistics and energy ministry websites could not be reached for this review, so national totals come from the EIA. All figures were checked in October 2026.

ACG: the field that sets the national oil trend

ACG lies about 100 km east of Baku. Its reservoirs sit between 2,000 and 3,500 metres beneath the Caspian seabed, and bp reports total investment of about $45 billion by mid-2024 and cumulative production of about 4.4 billion barrels (bp, History of ACG, checked October 2026). Development came in stages: Chirag from 1997, Central Azeri from early 2005, West Azeri from December 2005, East Azeri from late 2006, Deepwater Gunashli from April 2008, West Chirag from January 2014, and Azeri Central East from April 2024.

Annual output, platform by platform

bp's year-end updates give average production for each platform. The table below is taken directly from those releases.

Platform	2022	2023	2024	2025	1H 2026
Chirag	25,200	23,000	23,000	21,000	19,300
Central Azeri	104,100	96,000	97,000	90,000	88,000
West Azeri	106,400	86,000	75,000	76,000	73,300
East Azeri	64,000	58,000	51,000	43,000	45,000
Deepwater Gunashli	76,300	67,000	57,000	51,000	47,000
West Chirag	39,400	33,000	29,000	24,000	24,000
Azeri Central East (ACE)	not producing	not producing	10,000	25,000	26,400
ACG total	415,400	363,000	342,000	330,000	323,000

Figures in barrels per day. Sources: bp Azerbaijan business updates for 2022, 2023, 2024, 2025 and first half 2026, checked October 2026.

Insight: the decline without the new platform

ACG's total fell about 21 percent from 2022 to 2025, but the rate of decline slowed each year: down 12.6 percent in 2023, 5.8 percent in 2024 and 3.5 percent in 2025. Part of that slowdown is the Azeri Central East platform, which delivered first oil on April 16, 2024 and added 25,000 b/d in 2025.

Strip ACE out and the picture is different. The six older platforms produced about 332,000 b/d in 2024 and about 305,000 b/d in 2025, a fall of about 8 percent in a year. That is the underlying decline the field has to offset with new wells: bp reports that in 2025 ACG drilled and completed 10 oil producers, five water injectors and one gas injector. New platforms and new wells slow the decline; on the operator's own data they have not reversed it.

What is changing inside the field

• Gas under the oil. In the first half of 2026 ACG began its first commercial production of non-associated gas, from a well drilled in 2025 into the Qirmaki sands beneath the producing oil reservoirs. The same well found an oil rim, and a first oil-rim well was being drilled from the Deepwater Gunashli platform.
• Well technology. Well C44, drilled from West Azeri in the first half of 2026, was the first multilateral well in the Caspian, according to bp.
• Well count. At the end of June 2026, 150 oil wells were producing, with 51 used for water injection and 11 for gas injection.
• Associated gas to the state. ACG delivered about 8 million cubic metres a day of associated gas to Azerbaijan in 2025 (2.9 billion cubic metres in the year) and about 11 million cubic metres a day in the first half of 2026. The rest is reinjected to hold up reservoir pressure.
• Spending. bp and its partners spent about $564 million in operating costs and about $1,288 million in capital on ACG in 2025.

Two platforms at 20 years

bp marked two anniversaries in 2025. Central Azeri reached 20 years of production on February 18, 2025, having produced about 1.2 billion barrels (157 million tonnes) to date, and it remains ACG's largest producer. West Azeri reached 20 years on December 30, 2025, with cumulative production of more than 1 billion barrels (142 million tonnes). Their 2025 rates, 90,000 and 76,000 b/d, compare with 104,100 and 106,400 b/d in 2022. West Azeri lost almost 30 percent of its output in three years, while Central Azeri lost about 14 percent, which is why the field-level average hides very different ageing curves platform by platform.

The two cumulative figures also show why barrels and tonnes should not be swapped with a fixed factor. Central Azeri's numbers imply about 7.6 barrels per tonne (1.2 billion / 157 million), while West Azeri's "more than 1 billion" against 142 million tonnes implies at least 7.0. The difference reflects rounding in the published figures and the density of the oil, not an error in either.

Worked example: what a barrel of ACG costs to keep flowing

bp reports that it and its partners spent about $564 million on ACG operating costs and about $1,288 million on capital spending in 2025, against production of about 120 million barrels.

• Operating spending per barrel: $564 million / 120 million barrels = about $4.70.
• Capital spending per barrel: $1,288 million / 120 million barrels = about $10.70.
• Together: about $15.40 per barrel produced in the year.

These are simple ratios of the published totals, not a lifting cost or a break-even price. Capital spent in 2025, on new wells, seismic and the oil-rim and gas projects, pays off in future years' barrels, so a per-barrel figure overstates the cost of 2025 output and understates the cost of keeping the decline as slow as it is.

The contract behind ACG

The ACG production sharing agreement was signed in September 1994 between SOCAR and a consortium of foreign companies, took effect on December 12, 1994, and was extended to mid-century by an amended agreement signed on September 14, 2017. bp took over operatorship in June 1999. The partner list changed between bp's 2025 and 2026 updates: ITOCHU's 3.65 percent no longer appears, and SOCAR's stake rose from 31.65 to 35.30 percent. Current interests are bp 30.37 percent, SOCAR 35.30, MOL 9.57, INPEX 9.31, ExxonMobil 6.79, TPAO 5.73 and ONGC Videsh 2.92.

Shah Deniz: the gas field and its condensate

Shah Deniz lies 70 km south-east of Baku in water depths of 50 to 500 metres. It was discovered in 1999 under a production sharing agreement signed on June 4, 1996, and first produced in 2006 (bp, Shah Deniz, checked October 2026).

Year	Gas produced	Condensate produced
2024	around 28 billion cubic metres	more than 4 million tonnes (about 35 million barrels)
2025	around 27 billion cubic metres	about 4 million tonnes (about 32 million barrels)
1H 2026	around 14 billion cubic metres	about 2 million tonnes (about 15 million barrels)

The existing facilities can produce about 77 million cubic metres of gas a day, or about 28 billion cubic metres a year, so in 2025 the field ran at about 96 percent of capacity. Stage 1, started in 2006, was built for about 10 billion cubic metres a year and about 50,000 b/d of condensate. In 2025, bp says, the field supplied gas to Azerbaijan, Georgia, Türkiye and buyers in Europe.

The next project is compression. The $2.9 billion Shah Deniz Compression platform is designed to produce about 50 billion cubic metres of additional gas and about 25 million barrels of additional condensate from lower-pressure reserves, with first compressed gas expected from the Alpha platform in 2029 and from Bravo in 2030. Compression projects extend a field's plateau rather than raise its peak, so Shah Deniz output should not be expected to climb much above its current capacity.

Who owns Shah Deniz, and what it costs

The Shah Deniz participating interests are bp (operator) 29.99 percent, LUKOIL 19.99, TPAO 19.00, SGC 16.02, NICO 10.00 and MVM 5.00. In 2025 bp and its partners spent about $2,315 million on operating costs and about $1,087 million on capital at Shah Deniz, most of it tied to the Shah Deniz 2 project. Operating spending at Shah Deniz was about four times the ACG figure, even though ACG produces more barrels of liquids, because the gas field carries the cost of a much larger gas processing and export system.

On the gas side, Sangachal sent out an average of about 74.4 million cubic metres a day of Shah Deniz gas in 2025. Multiplied over the year, that is about 27.2 billion cubic metres, matching the field's reported output of around 27 billion.

Condensate is part of the oil story

Shah Deniz condensate is light liquid hydrocarbon that travels with the crude. At about 32 million barrels in 2025, it averaged about 88,000 b/d, a meaningful addition to ACG's 330,000 b/d. A decline in gas output therefore also lowers Azerbaijan's liquids exports.

Sangachal and BTC: how the oil leaves

The Sangachal terminal

Every barrel from ACG and Shah Deniz comes ashore at Sangachal, 55 km south of Baku. bp states the terminal's processing capacity as 1.2 million barrels a day of crude and condensate and about 81 million cubic metres a day of Shah Deniz gas, with maximum storage of about 4 million barrels (bp, Sangachal terminal, checked October 2026). The terminal also receives third-party oil from Kazakhstan and Turkmenistan.

Year	Oil and condensate exported from Sangachal
2022	more than 232 million barrels
2023	about 230 million barrels
2024	about 225 million barrels
2025	about 209 million barrels
1H 2026	about 97 million barrels

The Baku-Tbilisi-Ceyhan pipeline

BTC runs 1,768 km from Sangachal through Georgia to the Ceyhan terminal on Türkiye's Mediterranean coast. It began operating in June 2006, and bp says its capacity was raised from a design rate of 1 million b/d to 1.2 million b/d. From start-up to the end of 2025 it carried about 4.7 billion barrels, loaded on 6,145 tankers. In 2025, about 207 million barrels (27 million tonnes) were lifted at Ceyhan on 283 tankers (bp 2025 business update).

On July 1, 2026, operatorship of BTC, and of the activities shared between BTC and the South Caucasus gas pipeline, passed from bp to SOCAR Midstream Operations, a wholly owned SOCAR subsidiary. bp remains a shareholder; the BTC Co. shareholders are SOCAR 32.97 percent, bp 30.10, MOL 8.90, TPAO 6.53, Eni 5.00, TotalEnergies 5.00, ITOCHU 3.40, ONGC Videsh 3.10, ExxonMobil 2.50 and INPEX 2.50.

Worked example: how full is BTC?

• Barrels lifted at Ceyhan in 2025: about 207 million.
• Daily rate: 207,000,000 / 365 = about 567,000 b/d.
• Stated capacity: 1.2 million b/d.
• Utilisation: 567,000 / 1,200,000 = about 47 percent.
• Average cargo: 207 million barrels / 283 tankers = about 730,000 barrels per tanker.

The pipeline runs at less than half its capacity because the fields feeding it have declined since the line was expanded. That spare room is what allows Kazakh and Turkmen barrels to be added, a route discussed on the Kazakhstan page.

Worked example: where Sangachal's extra barrels come from

In 2025 Sangachal exported about 209 million barrels, or about 573,000 b/d. ACG produced about 330,000 b/d and Shah Deniz about 88,000 b/d of condensate, about 418,000 b/d together. The difference, roughly 155,000 b/d, is consistent with the terminal's stated role in handling third-party Kazakh and Turkmen oil plus other SOCAR volumes moving through BTC. This is an inference from bp's published totals, not a figure bp reports.

The national picture from the EIA

Because the national statistics office and the energy ministry could not be reached, the national total here comes from the EIA's October 2026 Short-Term Energy Outlook, Table 3c, which counts all petroleum liquids.

Period	Azerbaijan total liquids (million b/d)
2025 average	0.58
2026 Q1	0.56
2026 Q2	0.55
2026 Q3	0.55
2026 average (forecast)	0.55
2027 average (forecast)	0.53

On these figures, bp-operated ACG crude and Shah Deniz condensate made up about 72 percent of Azerbaijan's 2025 liquids (418,000 of 580,000 b/d). The rest comes from SOCAR's own fields and smaller ventures. The EIA forecast continues the gentle decline visible in the ACG table. Azerbaijan is one of the non-OPEC countries in the OPEC+ group listed in the EIA table; how the group's targets work is covered in OPEC+ explained, and how the EIA builds these numbers is in how to read the EIA Short-Term Energy Outlook.

Azerbaijan next to its Caspian neighbour

Azerbaijan and Kazakhstan both export Caspian crude to the Black Sea or the Mediterranean, but their positions in 2025 and 2026 were opposite. The EIA puts Kazakhstan at 2.15 million b/d of liquids in 2025, almost four times Azerbaijan's 0.58 million b/d, and Kazakh output was growing on the back of the Tengiz expansion while Azerbaijan's was shrinking. Kazakhstan's constraint is export capacity: its main pipeline ends at a Black Sea terminal whose moorings were damaged in attacks in 2025 and 2026, according to the Caspian Pipeline Consortium. Azerbaijan's constraint is the reverse: a pipeline running at under half its capacity because its fields are declining. That spare capacity, and Sangachal's existing role in receiving Kazakh and Turkmen oil, is why the trans-Caspian route comes up whenever Kazakhstan's main export line has problems. The Kazakhstan page covers the CPC incident record in detail.

Energy use at the terminal

In June 2025 the Sangachal terminal's owners sanctioned a $230 million electrification project that will connect the terminal to the national grid. It is linked to Shafag, a 240 MW solar plant being built in Jabrayil, through an arrangement under which the solar plant supplies the grid and the grid supplies an equivalent amount of power to the terminal. bp says execution is planned in two stages, the first in mid-2027 and the second by the end of 2028.

Limits of this data

• Operator data, not national statistics. bp's figures cover the fields it operates. SOCAR-operated production is visible here only as the residual in the EIA total.
• Rounded figures. bp gives most annual numbers as "about" or "around"; differences of a few thousand barrels a day are within rounding.
• Exports versus production. Sangachal and BTC carry third-party oil, so their volumes cannot be used as a proxy for Azerbaijani output.
• Tonnes and barrels. bp gives both. Converting between them depends on crude density; see the barrel of oil explainer before mixing the two.
• Removed from earlier versions. Figures for historical peaks, pipeline system lengths, Southern Gas Corridor expansion targets and downstream holdings that could not be traced to a primary source in this review have been taken out.

For how Brent, the main benchmark for Atlantic Basin crude, relates to US grades, see the WTI vs Brent spread explainer.

Frequently asked questions

How much oil does Azerbaijan produce?

The EIA estimates total petroleum liquids at 0.58 million b/d in 2025. The ACG field alone averaged about 330,000 b/d in 2025 according to bp, and Shah Deniz added about 88,000 b/d of condensate.

Is Azerbaijan's oil production falling?

Yes. ACG output fell from about 415,400 b/d in 2022 to about 330,000 b/d in 2025 and about 323,000 b/d in the first half of 2026. The EIA forecasts national liquids at 0.53 million b/d in 2027.

How much gas does Shah Deniz produce?

Around 27 billion cubic metres in 2025, close to its stated capacity of about 28 billion cubic metres a year.

Who operates the BTC pipeline?

Since July 1, 2026, SOCAR Midstream Operations, a SOCAR subsidiary. bp operated it before that and remains a 30.10 percent shareholder.

How full is the BTC pipeline?

About 207 million barrels were lifted at Ceyhan in 2025, roughly 567,000 b/d, or about 47 percent of the pipeline's stated 1.2 million b/d capacity.

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References

1. bp Azerbaijan. Business updates: 2022 full year, 2023 full year, 2024 full year, 2025 full year, first half 2026. Checked October 2026.
2. bp Azerbaijan. History of ACG, ACG, Shah Deniz, Sangachal terminal. Checked October 2026.
3. U.S. Energy Information Administration. Short-Term Energy Outlook, October 2026, Table 3c. Checked October 2026.