BAKU, Azerbaijan, October 3. Azerbaijan currently has the capacity to process up to 30 million tonnes of oil products per year. This figure does not refer solely to capacity within the country. Of this total, around 7 million tonnes relates to refining in Azerbaijan, while another 23 million tonnes comes from overseas facilities acquired or established with the participation of SOCAR.
President Ilham Aliyev cited this figure while speaking about the results of the country’s energy policy at the 8th Congress of the New Azerbaijan Party on October 2. In this context, the 30-million-tonne figure makes it possible to view this policy on a somewhat different scale — not only through oil and gas production and exports, but also through the refining infrastructure created abroad.
As the head of state noted, Azerbaijan is already receiving requests from various countries for supplies of oil products.
That is why 30 million tonnes is not a figure associated with a single facility, but rather with a distributed system. According to the President, the capacities are located in three locations: one refinery was built from scratch, while two others were acquired. This model expands SOCAR’s ability to operate in different markets and reduces dependence on a single country or production facility.
Refining as a Pillar of the Export Strategy
SOCAR’s overseas assets allow the company to operate not only in production but also at subsequent stages of the energy value chain. In Türkiye, the STAR refinery has been operating since October 2018. It links crude oil refining with petrochemical production and is of significant importance to SOCAR’s activities in the region.
In May 2026, SOCAR completed the acquisition of a 99.82% stake in the Italian company Italiana Petroli. The IP Group owns two refineries, storage facilities and an extensive retail network across Italy. This is not simply an acquisition of production capacity: the integrated infrastructure gives the company access to storage, logistics and the end-user market.
At the same time, overseas refining does not mean abandoning domestic production capabilities. Rather, these are complementary links: domestic oil production and refining in Azerbaijan are combined with production and distribution assets abroad. Such a structure allows the company to respond more flexibly to changes in demand and logistics.
Growing Demand and Energy Security
In his speech, the President linked the prospects for Azerbaijan’s exports to continuing geopolitical instability around the world and the risks of supply disruptions.
“The new geopolitical and economic reality is that many countries today cannot obtain energy resources as before. Here again, Azerbaijan is among the rare countries globally that produces, extracts, and exports all types of energy resources – crude oil, petroleum products, natural gas, electricity, petrochemical products, and fertilizers. Energy is the primary source of production for these products as well.
Unfortunately, the crisis experienced today, especially regarding petroleum products, will likely deepen further. This crisis has two sources: one to our north and the other in the Gulf region to the south. Some traditional suppliers are already being forced to halt exports in order to meet domestic demand,” the head of state said.
In this context, energy security becomes part of the national security of consumer countries, while supply reliability becomes a factor of foreign-policy significance. Azerbaijan already exports gas to 16 countries, predominantly European ones, through the Southern Gas Corridor. Gas transportation through the Trans Adriatic Pipeline has reached 60 billion cubic meters.
Statistics for January–August 2026 demonstrate the scale of export flows: during this period, Azerbaijan exported 14.678 million tonnes of crude oil and oil products worth $9.282 billion. Gas exports amounted to 16.378 billion cubic meters and generated $5.711 billion. Natural gas accounted for 26.18% of the country’s total exports during the reporting period. These figures reinforce the point that Azerbaijan’s role rests on several energy areas rather than on a single commodity.
ACG: Managing a Mature Field and Developing New Sources of Production
A special place in this strategy is occupied by the Azeri-Chirag-Gunashli (ACG) block. From the start of commercial development in November 1997 through the end of the first half of 2026, around 4.6 billion barrels of oil were produced from the block. The state also received 63 billion cubic meters of associated gas.
ACG is at a mature stage of development, and the natural decline in oil production is an expected process for a field that has been operated for more than three decades. Therefore, the task is no longer simply to increase output. It is important to extract remaining reserves more efficiently and sustain production through technology and new projects.
In 2026, bp launched two pilot enhanced oil recovery projects at ACG — BrightWater and IWAG. They are aimed at extracting oil remaining in the reservoir. Seismic survey data, well data, production indicators and geological models are being used to manage production dynamics. In the first half of 2026, capital expenditure on ACG activities amounted to around $733 million, up 31.4% from the same period a year earlier.
At the same time, the profile of the asset itself is changing. Production of free natural gas at ACG began in June. Recoverable reserves are estimated at around 4 trillion cubic feet, with the potential to increase to 6 trillion cubic feet. This expands the significance of the block beyond traditional oil production.
Additional potential is associated with the ACE platform. Two years after production began, by April 15, 2026, the platform had produced 2.1 million tonnes of oil. The approximately $6 billion project is designed for production capacity of up to 100,000 barrels per day, while cumulative production over its operating life could reach 300 million barrels.
New Projects — Building for the Future
The stability of the energy strategy depends not only on existing assets but also on the ability to replenish the resource base. In this context, the contracts mentioned by the President are important, including the acquisition of overseas oil assets and new production agreements.
One of the key decisions of the second International Investment Forum, held in Baku on September 25–26, was the final investment decision on the full-scale development of the Absheron field. The second phase envisages subsea production and the transportation of gas and condensate through a 140-kilometer multiphase pipeline to the Sangachal Terminal. At peak production, the project could provide up to 12.7 million cubic meters of gas per day — around 4.5 billion cubic meters per year — and 37,000 barrels of condensate per day. Production is expected to begin in late 2028 or early 2029.
SOCAR has also reached an agreement with ExxonMobil on the joint exploration and development of unconventional hydrocarbon resources in the Orta-Kür basin. The parties will each hold a 50% stake, with ExxonMobil serving as the project operator. The agreement will enable international expertise and technology to be brought in to assess resources that require specialized development approaches.
Other agreements reflect SOCAR’s efforts to expand international ties across the entire energy value chain. With Comstock Resources, the company intends to explore opportunities to liquefy gas from U.S. shale assets and subsequently sell it on international markets outside the United States. With Apollo, SOCAR is discussing the assessment of investments in upstream projects, while agreements with Germany’s SEFE and VNG provide for cooperation in gas, infrastructure and energy security and, in the case of VNG, scientific and technical aspects of hydrogen and its derivatives.
The trading segment is also developing. SOCAR Trading already operates with Kazakhstan and Turkmenistan in the oil and oil products trading sector, while cooperation with Uzbekistan began in 2026. The joint venture Turan Energy has started practical operations: supplies of Uzbek naphtha are underway, while opportunities for trading diesel fuel delivered through the terminal in Kulevi are also being explored.
Long-Term Strategy in a Changing Market
President Ilham Aliyev’s speech highlights Azerbaijan’s pragmatic approach to the energy transition. The development of renewable energy does not eliminate the importance of oil and gas for the modern economy, but neither does it exempt producers from the need to upgrade infrastructure, improve production efficiency and diversify markets.
Azerbaijan’s strategy consists of several interconnected elements: developing existing and new resources, investing in mature fields, overseas refining, expanding trading operations and cooperating with international companies. The 30-million-tonne oil-products figure symbolizes precisely this range — the ability to participate not only in the supply of raw materials but also in their processing and sale.
At a time when the need for reliable supplies may grow, the importance of the infrastructure created extends beyond commercial benefits. For Azerbaijan, it is becoming a tool of economic resilience and a factor in its international influence. The sustainability of this role will depend on how successfully the country can offset natural declines at mature fields, bring new projects online and effectively utilize both domestic and overseas assets.
