- 23.01.2023 — BP began drilling a new exploration well "SDX-8" at the “Shah Deniz” field, the importance of which is in assessing gas reserves at great depth. In fact, this well is designed to determine the resource of Phase 3 of the “Shah Deniz” development. There are no results yet because drilling takes a year.
- -SOCAR and ACWA Power signed a Memorandum of Cooperation on the development of Renewable Energy Sources (RES) within the framework of commitments on the international climate agenda
- 03.02.2023 — A regular meeting of the Advisory Council of the Southern Gas Corridor (SGC) was held in Baku, within the framework of which, in particular, a contract was signed between SOCAR and Romgaz SA on supplies of up to 1 billion cubic meters of gas to Romania and ACWA Power signed an "Executive contract for the implementation of a wind energy project with a capacity of up to 1.5 GW at sea", "Memorandum of Understanding on the creation of a 1 GW onshore wind farm" and "Memorandum of Understanding on the development of energy storage systems in Azerbaijan".
- 13.02.2023 — Italian power equipment manufacturer “Ansaldo Energia” will supply four gas turbines to Azerbaijan as part of bringing the capacity of the Azerbaijan Thermal Power Plant to 1,280 MW (the largest power plant in the South Caucasus)
- 20.03.2023 — The first batch of oil was delivered from the Kazakh Kashagan field to Baku for further transportation via the Baku-Tbilisi-Ceyhan (BTC) oil pipeline
- 24.03.2023 — Oil transit from Kazakhstan's Tengiz field via BTC began
- 25.04.2023 — Five European states, including Azerbaijan, signed a Memorandum on the project of gas pipeline interconnectors "Ring of Solidarity"
- 25.04.2023 — SOCAR office opened in Sofia
- 01.06.2023 — The Ministry of Energy of Azerbaijan signed a Memorandum of Intent with China Gezhouba Group Overseas Investment on the implementation of projects in the field of renewable energy sources (RES) with a capacity of 2 GW
- 02.06.2023 — SOCAR and Hungarian MVM CEEnergy have signed a contract for the supply of Azerbaijani gas to Hungary in 2023 in the amount of up to 100 million cubic meters
- 10.07.2023 — The first gas was received from the Absheron Caspian field (
- 24.07.2023 — SOCAR Trading and the Pakistani company PLL signed a contract for the purchase and sale of liquefied natural gas (
- 04.08.2023 — ADNOC acquired 30% in the Absheron gas project in the Caspian Sea in Azerbaijan
- 07.08.2023 — Advisor, with the assistance of the EBRD, presented a study on the prospects of the low-carbon hydrogen economy of Azerbaijan
- 22.08.2023 — Azerbaijan and Uzbekistan signed a roadmap on energy cooperation until 2026
- 21.09.2023 — SOCAR and AIC became BP partners in the Jabrayil solar power plant project (Shafag)
- 29.09.2023 — Azerbaijan and Turkey signed a roadmap for the creation of an electric power corridor through Nakhchivan
- 03.10.2023 — Prominent Azerbaijani petroleum geologist, First Vice President of SOCAR Khoshbakht Yusifzade passed away
- 12.10.2023 — The Russian Federation offered to swap oil supplies to Azerbaijan
- 26.10.2023 — Garadagh SES Masdar was commissioned)
- 29.10.2023 — SOCAR received the operator's position in the hydrocarbons project in Israel
- 15.11.2023 — SOCAR and Srbijagas signed a gas contract
- 28.11.2023 — SOCAR opened a representative office in Turkmenistan
- 04.12.2023 — SOCAR joined important documents on reducing greenhouse gas emissions in Dubai within the framework of COP28
- 04.12.2023 — SOCAR signed an agreement with ADNOC and Sirius on strategic partnership
- 15.12.2023 — SOCAR and BP will support efforts to reduce methane emissions
- 22.12.2023 — SOCAR buys out shares of Norwegian Equinor in three projects in Azerbaijan
The year 2023 was held under the slogan of transition to a "green economy”
The fuel and energy complex (FEC) remains a key one in the economy of Azerbaijan, but 2023 was held under the slogan of transition to a "green economy", the development of renewable energy sources and was marked in December at COP28 by SOCAR's commitment to reduce greenhouse gas emissions and the development of low-carbon projects.
Nevertheless, oil and gas account for over 90% of Azerbaijan's total exports, and revenues from the implementation of international oil and gas agreements account for 60-70% of the state budget.
In 2023, Azerbaijan sold a barrel of its Azeri Light oil for an average of $80-83, which gave a great increase to the country's strategic foreign exchange reserves.
Azerbaijan is a participant in the OPEC+ deal, but production in the country is falling rapidly, and in 2023 it will be about 30 million tons, including condensate.
Considering the "green trends", foreign companies have begun to abandon fossil fuels (one of COP28's solutions is net zero by 2050), optimize their costs, and review business strategies. For example, this explains Equinor's decision to leave Azerbaijan and focus on projects in Europe.
The decline in Azerbaijan's oil production and exports has opened a niche for Kazakhstan's oil in BTC, and transit will be increased in 2024.
As for gas, production at the key “Shah Deniz” field has peaked at about 26 billion cubic meters per year, and several EU countries, including Romania, Hungary and Serbia, have "reached out" for this gas. Negotiations with Albania are coming to an end. The talk is about large volumes of supplies, rather they are of a reserve nature for these eurozone countries.
The EU is paying more and more attention to the development of renewable energy sources, and Azerbaijan is following the same path, increasing the portfolio of "green" energy projects.
So far, only the Garadagh SES with a capacity of 230 MW (Masdar) has really started working, the remaining renewable energy stations (from ACWA Power, bp) can be launched in 2025, and by 2028 Azerbaijan wants to increase the share of renewable energy in the energy balance to 33%.
Azerbaijan is striving to create a "green economy" in Karabakh and Eastern Zangezur, to develop energy links with Nakhchivan, and in this regard has agreed on a strategic partnership with Turkey, and is trying to attract as many foreign investors as possible.
Azerbaijan has also convinced the EU and Central Asian countries of its important role as a producer, exporter and transit of renewable energy to the eurozone.
Because the positioning Azerbaijan as a country with attractive conditions for the production of green energy, in the first half of December ,Baku was chosen as the venue for COP29. Most likely, such a global responsibility will affect the priorities of the development of Azerbaijan's fuel and energy sector in 2024.
Industry
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On November 7, 2024, a decree by the President of the Republic of Azerbaijan led to the creation of a new transport and communications holding company, AZCON. The President explained this decision as a necessity for a "flexible management system that meets modern requirements to improve the operations of state enterprises in the transport and communications sector, enhance their economic efficiency, and increase contributions to the state budget."
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Azerbaijan relies heavily on traditional oil and gas production, exporting these resources primarily westward to markets in Georgia, Turkey, the Balkan states, and European Union member countries via pipeline infrastructure. Despite steady growth in natural gas output, with a significant increase of 19.7 billion cubic meters from 2010 to 2023, fossil fuel export revenues have declined annually due to price volatility and external economic pressures.
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Azerbaijan plans to present its third document on its Nationally Determined Contribution (NDC 3.0) to reduce greenhouse gas emissions at the 29th Session of the Conference of the Parties to the United Nations Framework Convention on Climate Change. The goal is to help achieve the global target of limiting temperature rise to 1.5 degrees Celsius and adapting to the consequences of climate change.
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With only days remaining until the 29th session of the United Nations Framework Convention on Climate Change (COP29), starting on November 11 in Baku, around 40,000 delegates from over a hundred countries are expected to attend. This event, running through November 22, marks an unprecedented responsibility for Azerbaijan, which holds the COP29 presidency, as the session will address issues of global significance.
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