Azerbaijan will look for oil from its neighbors: its own production is falling

The Azerbaijani state-owned company Socar is looking for new projects abroad. Domestically, oil production is declining.

Azerbaijan's Socar has signed a production sharing agreement (PSA) with the Ministry of Energy of Uzbekistan and Uzbekneftegaz. This is reported by the Uzbek agency.

We are talking about geological exploration and subsequent production in case of discovery of deposits on investment blocks of the Ustyurt oil and gas region.

"In accordance with the terms of the agreement, it is planned to conduct 3D seismic exploration on an area of at least 1.0 thousand square kilometers and, based on the results, begin exploration work on one well. In case of discovery of hydrocarbon deposits of industrial importance, the parties proceed to the stage of their development and subsequent production," the Ministry of Energy of Uzbekistan reports.

Socar said that the first phase includes geological exploration to identify promising areas. During this time, the Azerbaijani state-owned company will act as an operator.

"According to the document, prospecting and exploration work and the sinking of at least one exploration well are planned to be completed within five years," Socar added.

Oil production is declining in Azerbaijan due to dwindling deposits. According to S&P Global Ratings, oil production in the country decreased from 790 thousand barrels per day in 2019 to 580 thousand barrels per day in 2024.

"In the next few years, there will be some stabilization in production, as the continued decline in some fields will be offset by small additional capacities in others," the agency predicted.

"However, in the long term, production is likely to continue to fall," according to S&P Global Ratings.

As EADaily reported, purchases of Russian oil allow Azerbaijan to increase oil exports. There is a growing shortage of raw materials for domestic consumption in the country.