BAKU, Azerbaijan, October 10. Azerbaijan is one step ahead by having invested in the critical oil and gas infrastructure, says Wood Mackenzie.
“Azerbaijan not only ranks as a sizeable oil and gas producer in global terms but, importantly, is ahead of the game having invested in critical infrastructure to export its oil and gas from the landlocked Caspian Sea. Its upstream industry, more than a century old, rose to global significance early this millennium with the development of BP’s giant offshore Azeri-Chirag-Gunashli (ACG) and Shah Deniz projects,” the research and consulting firm said in its latest analysis.
Wood Mackenzie notes that ACG and Shah Deniz drove total production to 1.2 million boe/d by 2010, with oil accounting for 80% of the output. Production has remained broadly stable since then and, according to the firm’s forecasts, is expected to stay at this level until the late 2030s, supported by Phase 2 of TotalEnergies’ Absheron gas project, which reached the Final Investment Decision last month.
“Gas has become the growth story, comprising about 60% of production in 2026,” reads the analysis.
Wood Mackenzie analysts note that Azerbaijan’s state oil company SOCAR is a significant investor in all upstream projects.
“The government is also aiming to attract more investment offshore as well as onshore where ExxonMobil has a licence to explore a large unproven shale play. Azerbaijan’s refining capacity is focused on meeting domestic fuel demand. The construction of major export pipelines opened the Southern Corridor, connecting Azerbaijan’s oil and gas supplies to wider markets beyond the Caspian. The 1.2 million b/d BTC oil pipeline (2005) transports mainly Azerbaijani crude to the Mediterranean port of Ceyhan. Even topped up with volumes shipped across the Caspian from Turkmenistan and Kazakhstan, BTC is substantially underutilised. The TANAP (2018) and TAP (2020) gas pipelines carry Azerbaijani gas through Georgia and Türkiye and on to the European gas network via Greece and Italy,” reads the analysis.
Meanwhile, Azerbaijan produced 17.692 million metric tons of crude oil, including gas condensate, from January through August 2026, according to the State Statistics Committee. Marketable crude oil accounted for 17.648 million metric tons of the total.
During the same period, Azerbaijan exported 14.678 million metric tons of crude oil and petroleum products derived from bituminous minerals, valued at $9.282 billion, according to the State Customs Committee.
Natural gas production totaled 33.4 billion cubic meters in January-August 2026, while exports of natural gas in gaseous form amounted to 16.37 billion cubic meters, worth $5.7 billion, according to the State Statistics Committee.
