Azerbaijan Oil & Gas Upstream Market Size
| Study Period | 2021 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2021 - 2022 |
| CAGR | > 1.50 % |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Azerbaijan Oil & Gas Upstream Market Analysis
The Azerbaijan oil and gas upstream market is projected to register a CAGR of 1.5% during the forecast period.
The COVID-19 pandemic negatively impacted the market in 2020. However, the market has now reached pre-pandemic levels. The presence of international oil and gas majors such as BP, and Total, along with several joint ventures with the State Oil Company of the Azerbaijan Republic (SOCAR) for the exploration and production of several onshore and offshore fields, is expected to drive the market's growth during the forecast period. However, the increasing benefits and the country's plan to increase the share of renewables in the energy mix, complemented by volatile crude oil prices, are expected to hinder the growth of the market studied.
Technological improvements and increasing viability of deepwater and ultra-deepwater projects in the Gunashli field are expected to create ample opportunity for the market players in Azerbaijan oil and gas upstream market.
Azerbaijan Oil & Gas Upstream Market Trends
This section covers the major market trends shaping the Azerbaijan Oil & Gas Upstream Market according to our research experts:
Offshore Segment to Dominate the Market
Azerbaijan has been one of the top countries to start crude oil production from offshore platforms. It has prolific hydrocarbon potentials in its offshore region for crude oil and natural gas.
Azerbaijan's Azeri-Gunashli (ACG), the largest oilfield in the Caspian Sea with a development area of 432.4 sq. km. and 5-6 billion barrels of recoverable reserves, attracted investment from foreign operators such as BP, Equinor, Total, etc. Most of the country's natural gas is also produced offshore from the Shah Deniz field, with reserves estimated at 1.2 trillion cubic meters, or the ACG complex.
Production of natural gas increased in the country, rising by 22.77% from 25.9 billion cubic meters in 2020 to 31.8 billion cubic meters in 2021. Consumption of gas in Azerbaijan increased by 2.4%, from 12.4 billion cubic meters in 2020 to 12.7 billion cubic meters in 2021. The increase in production is expected to boost the growth of the upstream market.
In April 2022, EnerMech and Oil & Gas Proserv (OGP), an affiliate of Nobel Energy Group in Azerbaijan, entered into a joint venture (JV) and secured two contracts totaling USD 3 million. The first award is a USD 2 million contract to deliver engineering, lubricant oil flushing, accumulator charging, and N2 He leak testing to support the construction of an offshore platform that facilities will process up to 100,000 barrels of oil per day and 300 million barrels over the lifetime of the project. The second campaign is a USD 1 million campaign to support the development of the Absheron gas-condensate field. In July 2022, the European Commission signed an agreement with Azerbaijan to increase imports of Azeri natural gas to at least 20 billion cubic meters a year by 2027, helping reduce the EU's dependence on Russian energy.
With sustained growth in the consumption of natural gas, petroleum, and petrochemical products, the country plans to increase the exploration and production from its offshore region, driving the oil and gas upstream market's growth.
Increased Investments from Foreign Companies to Drive the Market
Azerbaijan has been a hotspot for many foreign companies such as BP, Equinor, Total, Chevron, and others to invest in oil and gas exploration and production in the country. The State Oil Company of the Azerbaijan Republic (SOCAR) produces about 20% of Azerbaijan's total oil output, while international oil companies produce the remainder.
Azerbaijan's main producing field is the Azeri-Chirag-Gunashli (ACG) complex, which is operated by BP, the largest shareholder in the Azerbaijan International Operating Company (AIOC) that was formed to develop the fields. Other companies interested in the ACG fields include Chevron, Inpex, Statoil, Turkiye Petrolleri, ExxonMobil, SOCAR, ITOCHU, and ONGC Videsh. The stakeholders have extended their ACG production-sharing agreement (PSA) with the Azerbaijani government till 2049.
In November 2022, the optimization stage engineering services contract for the delivery of an unmanned compression platform in Azerbaijan was awarded to a joint venture between US services company KBR and Azerbaijan's state oil company Socar BP. In the Azerbaijan sector of the Caspian Sea, the Shah Deniz compression project is under a pre-final investment decision. It aims to start construction by the end of the year. SOCAR-KBR will provide class-3 engineering services under the contract and support optimization. BP's net-zero goals require engineering to enable integration of the new platform into the existing system and shore power to reduce its carbon footprint.
In December 2021, the British oil and gas company BP planned to increase its stake in the Shah Deniz gas field offshore Azerbaijan by purchasing a 1.16% stake for USD 168 million from Malaysian oil and gas company Petronas. In Azerbaijan, there has been an increase in oil production by 4.39% in 2021, rising from 35 million tons in 2020 to 35.1 million tons in 2021. The consumption of oil has risen by 4.2%, increasing from 91 thousand barrels per day in 2020 to 95 thousand barrels per day in 2021.
Government policies and support related to the exploration and production of oil and gas are also expected to play a role in the industry and encourage the companies to boost oil and gas investments in Azerbaijan. Therefore, increased investment is expected to drive the oil and gas upstream market's growth.
Azerbaijan Oil & Gas Upstream Industry Overview
The Azerbaijan oil and gas upstream market is moderately fragmented. Some of the key players (in no particular order) include the State Oil Company of the Azerbaijan Republic, BP PLC, Equinor ASA, Total SA, and Chevron Corporation, among others.
Azerbaijan Oil & Gas Upstream Market Leaders
State Oil Company of the Azerbaijan Republic
BP PLC
Equinor ASA
Total SA
Chevron Corporation
*Disclaimer: Major Players sorted in no particular order
Azerbaijan Oil & Gas Upstream Market News
In November 2022, BP awarded Global Energy Solutions (Glensol) a seven-year contract for the provision of operating and maintenance services on gas turbine packages. BP stated that Glensol would provide its services to BP's assets in Azerbaijan, including the Azeri-Chirag-Gunashli, Baku-Tbilisi-Ceyhan, and Shah Deniz projects. Under the contract, technical support, fleet management, overhauls of power turbines, engines, and alternators, spares management, and other related services will be provided.
In July 2022, Aquaterra Energy was awarded a high-pressure high temperature (HPHT) subsea riser contract for the BX-01 exploration well at the Babek project offshore Azerbaijan by Umid Babek Operating Co. (UBOC), a unit of the State Oil Company of Azerbaijan Republic (SOCAR).
Azerbaijan Oil & Gas Upstream Market Report - Table of Contents
1. INTRODUCTION
1.1 Scope of the Study
1.2 Market Definition
1.3 Study Assumptions
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET OVERVIEW
4.1 Introduction
4.2 Azerbaijan Crude Oil Production Forecast in thousand barrels per day, till 2027
4.3 Market Size and Demand Forecast in USD billion, till 2027
4.4 Recent Trends and Developments
4.5 Government Policies and Regulations
4.6 Market Dynamics
4.6.1 Drivers
4.6.2 Restraints
4.7 Supply Chain Analysis
4.8 PESTLE Analysis
5. MARKET SEGMENTATION
5.1 By Operation
5.1.1 Exploration
5.1.2 Development
5.1.3 Production
5.2 By Location
5.2.1 Onshore
5.2.2 Offshore
6. COMPETITIVE LANDSCAPE
6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
6.2 Strategies Adopted by Leading Players
6.3 Company Profiles
6.3.1 Equinor ASA
6.3.2 Exxon Mobil Corporation
6.3.3 Total SA
6.3.4 State Oil Company of Azerbaijan Republic
6.3.5 BP PLC
6.3.6 Chevron Corporation
6.3.7 NK Lukoil PAO
6.3.8 Nobel Oil Group
- *List Not Exhaustive
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
Azerbaijan Oil & Gas Upstream Industry Segmentation
The oil and gas industry's upstream activities include exploration, creating geological surveys, obtaining land rights, and production, which includes onshore and offshore drilling.
The Azerbaijan oil and gas upstream market is segmented by operation and location. By operation, the market is segmented into exploration, development, and production). By location, the market is segmented into onshore and offshore. For each segment, the market sizing and forecasts have been done based on revenue (USD billion).
| By Operation | |
| Exploration | |
| Development | |
| Production |
| By Location | |
| Onshore | |
| Offshore |
Azerbaijan Oil & Gas Upstream Market Research FAQs
What is the current Azerbaijan Oil and Gas Upstream Market size?
The Azerbaijan Oil and Gas Upstream Market is projected to register a CAGR of greater than 1.5% during the forecast period (2024-2029)
Who are the key players in Azerbaijan Oil and Gas Upstream Market?
State Oil Company of the Azerbaijan Republic, BP PLC, Equinor ASA, Total SA and Chevron Corporation are the major companies operating in the Azerbaijan Oil and Gas Upstream Market.
What years does this Azerbaijan Oil and Gas Upstream Market cover?
The report covers the Azerbaijan Oil and Gas Upstream Market historical market size for years: 2021, 2022 and 2023. The report also forecasts the Azerbaijan Oil and Gas Upstream Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Azerbaijan Oil and Gas Upstream Industry Report
Statistics for the 2024 Azerbaijan Oil and Gas Upstream market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Azerbaijan Oil and Gas Upstream analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
