BAKU, Azerbaijan, April 9. Trend International News Agency presents an overview of key events in the first quarter of 2026 in Azerbaijan's energy sector.
Gas Sector
On January 4, Azerbaijan and Türkye signed a new agreement for the supply of 33 billion cubic meters of natural gas, marking a significant step in strengthening regional energy cooperation.
Azerbaijan has released revenue forecasts for its oil and gas fields for 2026. Net hydrocarbon revenues are expected to reach $5.03 billion (8.55 billion manat). The projected figure in manat for 2026 is 2.91 billion, which is 25.4% lower than actual revenues in 2024 and 1.24 billion manat, or 12.7%, lower than the forecast for 2025.
The Accounts Chamber published projections for Azerbaijan’s oil and gas transit revenues in 2026. According to the budget of the State Oil Fund of the Republic of Azerbaijan (SOFAZ), transit revenues through the country are forecasted at $2,200, or 3,700 manat. This represents a 0.5 million manat decrease compared to actual 2024 revenues and 25.4 million manat below the approved 2025 forecast, while remaining roughly in line with expected 2025 revenues.
On January 20, Rovshan Najaf, President of the State Oil Company of Azerbaijan (SOCAR), met with Musabbey Al Kaabi, CEO of the Upstream Division of Abu Dhabi National Oil Company (ADNOC) Group, to discuss the full-scale development of the Absheron gas-condensate field.
On February 19, bp, the operator of the Azeri-Chirag-Guneshli (ACG) oil field and Shah Deniz gas-condensate field in the Caspian Sea, announced the extension of its contract for the operation and maintenance of platform drilling rigs with Turan Drilling & Engineering Company LLC, a joint venture between SOCAR AQS and US-based Helmerich & Payne (H&P).
On March 3, meetings of the Southern Gas Corridor and Green Energy Advisory Councils were held in Baku. During the sessions, a Memorandum of Understanding on renewable energy cooperation was signed between the State Agency for Renewable Energy under the Ministry of Energy of Azerbaijan and the Croatian company Energia Naturalis d.o.o.
On March 5, SOCAR, together with partner Asarel Group, completed the preliminary design and front-end engineering design (FEED) documentation for a gas distribution network project in Panagyurishte, Bulgaria.
According to the latest data from the State Statistics Committee, Azerbaijan exported 4.38 billion cubic meters of natural gas (in gaseous form) worth $1.28 billion from January through February 2026.
The start date for natural gas production at the Absheron field has been confirmed. Full-scale development in the Azerbaijani sector of the Caspian Sea is scheduled to begin on September 1, 2029. In the first two months of 2026, Azerbaijan produced 8.18 billion cubic meters of natural gas.
Oil Sector
On January 8, the State Oil Company of Azerbaijan (SOCAR) and France’s TotalEnergies discussed the full-scale development of the Absheron gas-condensate field.
The following day (January 9), Azerbaijan shipped a total of 2,698 tons of cargo (48 railcars) to Armenia, including 1,742 tons of AI-95 gasoline and 956 tons of diesel fuel. On the same day, bp announced preparations for deploying the first Light Well Intervention Vessel (LWIV) in the Caspian Sea at the Deepwater Gunashli field.
On January 11, a train of 18 railcars carrying 979 tons of AI-92 gasoline departed from Azerbaijan to Armenia.
Azerbaijan also released its production forecast for the Azeri-Chirag-Guneshli (ACG) project for 2026. Oil output at the ACG field is projected at 120.1 million barrels, slightly lower than the 2025 figure of 123 million barrels. Correspondingly, revenues from the field are expected to reach $4.23 billion.
On January 12, SOCAR launched its Quality & Document Management System (QDMS) platform, reinforcing operational efficiency. The market value of SOFAZ’s investment portfolio in Italy was announced at $2.8 billion.
At a January 13 meeting with Kenan Mirzayev, CEO of Petkim and head of SOCAR Türkiye’s refining and petrochemicals business, CNCEC Chairman Mo Dingge confirmed that the company is ready to deepen cooperation with SOCAR, particularly in international market expansion, emphasizing long-term strategic energy and chemical sector partnerships.
SOCAR also announced plans for the Kulevi terminal, including construction of a new storage tank farm in 2026, with completion expected by mid-2027. On January 16, Azerbaijani gas began flowing to Austria and Germany.
On January 20, SOFAZ signed a strategic cooperation protocol with BlackRock, the world’s largest asset manager, and its affiliate Global Infrastructure Partners (GIP), with planned investments of up to $1.5 billion in infrastructure and digital projects. On the same day, SOCAR Carbamide joined the prestigious Global Lighthouse network of the World Economic Forum (WEF) and received the Digital Lighthouse Award. SOCAR also held discussions with Planet Labs PBC on using advanced satellite imagery and geospatial analytics for environmental monitoring.
On January 22, SOCAR acquired a 10% stake in the Baleine oil and gas development project in Côte d’Ivoire through an agreement with Eni S.p.A. On January 26, the SOCAR Drilling Trust completed another well in the West Absheron field.
On January 28, SOFAZ and the Arab Energy Fund partnered with CVC DIF to invest in a joint investment vehicle operating alongside DIF VII, which previously acquired a 50% stake in PAL Cooling Holding, a leading district cooling operator in the UAE. On the same day, SOCAR signed a framework cooperation agreement with China’s CITIC Construction Co., Ltd. SOCAR is also exploring the use of drones and advanced data modeling for asset valuation.
The Heydar Aliyev Oil Refinery plans to produce 1.4 million tons of Euro-5 gasoline and 2.3 million tons of diesel fuel in 2026. Drilling of a new multilateral well is planned at the East Azeri platform in the ACG block.
On February 6, the European Commission approved the joint acquisition of SOCAR Aliağa Liman İşletmeciliği A.Ş. ("SOCAR Terminal") by SOCAR Türkiye Enerji A.Ş. ("STEAS") and Terminal Investment Switzerland Sàrl ("TISS"), jointly controlled by MSC Mediterranean Shipping Company Holding S.A. (Switzerland) and BlackRock, Inc. (USA).
On February 19, SOCAR signed an Exploration, Development, and Production Sharing Agreement with Gran Tierra Energy Inc. for a promising onshore block in the Guba-Caspian region. On February 25, SOCAR and Samsung E&A Co., Ltd. signed a memorandum of understanding to explore energy asset efficiency, production localization, regional industrial development, human capital growth, and decarbonization initiatives.
On February 27, SOCAR and bp signed an agreement on seismic and well exploration in the Caspian Basin.
Azerbaijan has also begun developing unconventional oil and gas resources, as announced by SOCAR President Rovshan Najaf at the US-Azerbaijan Trade and Business Conference marking the 30th anniversary of the US-Azerbaijan Chamber of Commerce. Najaf emphasized that this initiative had not previously been a priority due to abundant Caspian fish stocks.
On March 11, the US Energy Information Administration (EIA) released its oil production forecast for Azerbaijan for 2026-2027. Production of oil and other liquid hydrocarbons is expected to average more than 540,000 barrels per day in both years, down from over 570,000 barrels per day in 2025. In 2026, production is projected at over 550,000 barrels per day in Q1, over 540,000 in Q2, and over 530,000 in Q3 and Q4. A similar trend is expected for 2027.
According to the State Customs Committee, Azerbaijan exported 3.6 million tons of crude oil and bituminous petroleum products worth $1.70 billion from January through February 2026. In the same period, the Baku-Tbilisi-Ceyhan (BTC) pipeline transported 4.05 million tons of transit oil, and the Baku-Tbilisi-Erzurum pipeline transported 3.68 billion cubic meters of gas.
Green Economy
On January 7, construction of the Khizi-Absheron Wind Farm (WPF) was completed, marking a significant milestone in Azerbaijan’s renewable energy expansion.
On January 13, global engineering group RINA and HPC Hamburg Port Consulting, a leading firm in port, terminal, and logistics consulting with expertise in sustainable digitalization and intermodal rail operations, were awarded a five-year contract under the OSCE project "Promoting Green Ports and Connectivity in the Caspian Region."
Azerishig Open Joint-Stock Company announced plans to construct a new substation in the Goygol district, including a 2x40 MVA 110/35/10 kV substation and control center, installation of equipment, an 11.5-kilometer 110 kV double-circuit overhead power line from Dashkesan 1-2 to the new substation, and major repairs to existing transmission lines.
On January 15, the Italian company CESI began preparing a feasibility study for the Trans-Caspian Green Energy Corridor.
On January 19, Tural Aliyev, General Director of Green Corridor Union LLC, held the first meeting with Asian Development Bank (ADB) representatives Nana Gurgenidze and Altynay Arapova to discuss collaborative initiatives.
On January 20, SOCAR exchanged views with Honeywell on sustainable development, renewable energy, and human capital development, emphasizing long-term cooperation in energy transition initiatives.
Phil Cole, Director of Industrial Affairs at WindEurope, announced that following a March 2024 memorandum of understanding between WindEurope and the Azerbaijan Renewable Energy Agency, the association will support Azerbaijan in expanding its wind energy capacity. WindEurope will provide best practices, risk analysis, guidance on onshore and offshore wind projects, and insights into the European power purchase agreement (PPA) market, while also facilitating connections with policymakers, regulators, and potential electricity buyers in Azerbaijan and the EU.
On January 29, construction began on the Zangezur power transmission line, further strengthening Azerbaijan’s energy infrastructure.
On February 2, Azerbaijani Deputy Energy Minister Orkhan Zeynalov, alongside deputy energy ministers from Kazakhstan and Uzbekistan, representatives of CESI SpA, ADB, and the respective national electricity companies, held the first online meeting on the feasibility study for the Central Asia-Azerbaijan Green Energy Corridor. Zeynalov emphasized the project’s role in deepening regional energy ties and promoting low-carbon development. The feasibility study, led by CESI SpA in collaboration with Türkiye’s EPRA and the UK’s JURU, will define the initial project framework.
The Astara modular power plant has generated 2.2 billion kilowatt-hours of electricity since its launch, while Azerbaijan received its first-ever carbon credits in the green energy sector on February 10.
On February 11, BP announced the sale of a 10% stake in Shafag Jabrayil Solar Limited (SJSL) to MVM Energetika Zrt. (MVM).
On February 24, Deputy Energy Minister Elnur Soltanov confirmed that CESI had been selected to conduct the feasibility study for the Central Asia–Azerbaijan Green Energy Corridor, with preliminary studies expected to be completed within 11 months, potentially by early 2027. On the same day, Real Hajiyev of the European Bank for Reconstruction and Development (EBRD) announced plans to start a feasibility study for rehabilitating water infrastructure in Baku and the Absheron Peninsula, in cooperation with the State Agency for Water Resources of Azerbaijan.
On February 27, the Ministry of Energy released its 2025 report, noting Romania’s intention to join the Azerbaijan-Georgia-Türkiye-Bulgaria "green" energy corridor. Türkiye has prepared a draft protocol to amend the April 2025 Memorandum of Understanding, which is currently under review, alongside a coordinated draft Terms of Reference (ToR) document.
As of March 3, the Garadagh solar power plant had generated over 1.1 billion kilowatt-hours of electricity, supplying it to Azerbaijan’s national grid.
According to the State Customs Committee, Azerbaijan exported 72.2 million kilowatt-hours of electricity from January through February 2026. Meanwhile, the State Statistics Committee reported that 141.6 million kilowatt-hours of electricity were generated at wind farms in the country during the same period.