Azerbaijan restarts oil exploration with ExxonMobil, BP and MOL

Baku signs multiple deals with major industry players to boost exploration as oil reserves decline and ACG production slows.

Share:

Azerbaijan has signed a series of oil and gas exploration agreements with several international companies, including ExxonMobil, BP, TPAO, MOL and Gran Tierra Energy, during the Baku Energy Week forum held from June 3 to 5. These partnerships follow the country’s first-ever bidding round launched in 2023, to which 11 companies responded out of the 23 invited.

The stated objective is to stimulate exploration activity as production at the Azeri-Chirag-Gunashli (ACG) field, Azerbaijan’s main oil asset, enters structural decline. Despite the commissioning in 2024 of a $6bn platform at ACG, authorities in Baku expect a gradual decrease in volumes of Azeri Light crude oil.

A new exploration framework

The State Oil Company of the Azerbaijan Republic (Socar) has launched a new dedicated subsidiary, Caspian Geophysical, equipped with advanced data processing capacity and airborne full-tensor gravity survey technology. According to company representatives, this is a first for the region.

Efforts are focused on underexplored onshore areas. Socar currently produces 120,000 barrels per day (b/d) from its onshore and shallow-water operations. A memorandum of understanding has been signed with ExxonMobil to explore the Ganja-Yevlakh-Aghjabadi corridor in the country’s west-central region, applying shale oil techniques developed in the United States.

Rising interest in onshore resources

Gran Tierra Energy, active in Colombia and Ecuador, signed a memorandum for the Guba-Caspian region in northern Azerbaijan. MOL, already present in both the ACG field and the Baku-Tbilisi-Ceyhan pipeline, extended an existing agreement for exploration in the Shamakhi-Gobustan area. In parallel, independent GL Group launched Azerbaijan’s first horizontal onshore well in April, targeting the Kura basin.

Kamran Zahid, managing director of Caspian Geophysical, said no comprehensive seismic survey had been conducted in the onshore regions for over 20 years. The new geophysical data is expected to help identify previously overlooked structures.

Offshore deals and re-evaluation of potential

Offshore, BP signed an agreement with TPAO and Socar to appraise the Shafag-Asiman gas discovery, located over 7,200 metres below the seabed. Additionally, BP joined the Ashrafi-Dan Ulduzu-Aypara production sharing contract to explore Miocene geological formations.

BP is also conducting a five-year ocean-bottom seismic programme at ACG worth $370mn to identify bypassed hydrocarbons. ACG output declined only 2% year-on-year in Q1 2025, reaching 331,000 b/d. BP regional president Gary Jones said further drilling and gas injection wells are planned to stabilise production.

The US Energy Information Administration estimates that Azerbaijan’s reserves stood at 7bn barrels of oil and 60 trillion cubic feet (Tcf) of gas as of January 2025.

The advisory opinion issued by the International Court of Justice increases legal exposure for states and companies involved in the licensing or expansion of oil and gas projects, according to several international law experts.
US oil company Chevron has received new approval from American authorities to relaunch its operations in Venezuela, halted since May following the revocation of its licence under the Trump administration.
Kazakhstan adopts an ambitious roadmap to develop its refining and petrochemical industry, targeting 30% exports and $5bn in investments by 2040.
Turkey has officially submitted to Iraq a draft agreement aimed at renewing and expanding their energy cooperation, now including oil, natural gas, petrochemicals and electricity in a context of intensified negotiations.
The Dangote refinery complex in Nigeria is planning a scheduled forty-day shutdown to replace the catalyst and repair the reactor of its gasoline production unit, starting in early December.
Indonesia Energy plans to drill two new wells on the Kruh block in Indonesia before the end of 2025, following a 60% increase in proven reserves thanks to recent seismic campaigns.
CanAsia Energy Corp. confirms it has submitted a bid for oil and gas exploration and production in Thailand, reinforcing its international strategy within a consortium and targeting a block in the 25th onshore round.
The decrease in US commercial crude oil stocks exceeds expectations, driven by a sharp increase in exports and higher refinery activity, while domestic production shows a slight decline.
Pacific Petroleum and VCP Operating finalise the $9.65mn acquisition of oil assets in Wyoming, backed by a consortium of Japanese institutional investors and a technology innovation programme focused on real-world asset tokenisation.
Repsol's net profit fell to €603mn in the first half, impacted by oil market volatility and a massive power outage that disrupted its activities in Spain and Portugal.
A USD 1.1 billion refinery project in Ndola, signed with Fujian Xiang Xin Corporation, aims to meet Zambia's domestic demand and potentially support regional exports.
The Organization of the Petroleum Exporting Countries (OIES) confirmed its Brent price forecast at 69 USD/b in 2025 and 67 USD/b in 2026, while adjusting its 2025 surplus forecast to 280,000 barrels per day.
PermRock Royalty Trust has declared a monthly distribution of 395,288.31 USD, or 0.032491 USD per trust unit, payable on August 14, 2025, based on production revenues from May 2025.
Portuguese group Galp Energia announced an adjusted net profit of €373 million for Q2 2025, a 25% increase from the previous year, driven by higher hydrocarbon production in Brazil.
Kuwait Petroleum Corporation (KPC) adjusts its strategy by reducing its tenders while encouraging private sector participation to meet its long-term objectives by 2040, particularly in the petrochemical industry.
Xcel Energy plans to add over 5,000 MW of generation capacity by 2030, including solar, wind, and storage projects, to support the growing energy demand in its service areas.
Following the imposition of European Union sanctions, Nayara Energy adjusted its payment terms for a naphtha tender, now requiring advance payment or a letter of credit from potential buyers.
US Senator Lindsey Graham announced that President Donald Trump plans to impose 100% tariffs on countries purchasing Russian oil, including China, India, and Brazil.
Russian oil group Rosneft rejects EU sanctions targeting Nayara Energy, in which it holds a 49.13% stake, citing a breach of international law and a threat to India’s energy security.
Chevron finalised the acquisition of Hess for nearly $60bn, after winning an arbitration case against ExxonMobil over pre-emption rights in Guyana.