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.
