BAKU, Azerbaijan, December 6. Several upstream projects could support Azerbaijan’s gas production over longer term, Trend reports via the S&P Global Ratings.
“Economic activity expanded by 1.5% in the second half of the year compared with the same period last year. Growth was driven by the nonhydrocarbon sector, while hydrocarbons continued to weigh on overall output amid lower prices and reduced production. For the full year, we expect real GDP growth to slow to 1.8%, down from 4.1% in 2024. Over the first 10 months of the year, oil production fell by 4.6% to around 556,000 barrels per day (bpd), a decline of roughly 27,000 bpd compared with the same period last year. Natural gas output rose by 1.7% to about 849,000 bpd (oil-equivalent), an increase of only around 14,000 bpd (oil-equivalent), underscoring that the modest rise in gas output does not offset the sharper decline in oil production. As a result, overall hydrocarbon activity remains in negative territory,” said the rating agency.
S&P analysts believe that these dynamics are set to persist. Oil production is likely to edge lower in 2026 as the Azeri–Chirag–Deepwater Gunashli (ACG) complex continues to mature.
“Additional investment by foreign operators are slowing, but not halting, the underlying decline. Gas output will remain broadly flat, with Azerbaijan operating close to its medium-term peak and limited new volumes scheduled before the end of the decade. With hydrocarbons contributing little to growth and diversification progressing gradually, we expect real GDP growth to remain subdued (around 1.7% in 2026) and relatively weak over the next few years. Over the longer term, several upstream projects (including the next phase of Absheron, the ACG deep gas project, and the development of Umid, Babek, and Karabakh) could support gas production, although all remain at early planning stages and would take years to materialize,” reads the latest report by the rating agency.