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Oil and gas: Azerbaijan

Oilfield Technology,


  • Azerbaijan is among the oldest oil producers in the world.
  • Oil and natural gas production and export are central to economic growth.
  • The country is one of the Caspian region’s most important strategic export routes to the West.
  • Azerbaijan’s importance as a natural gas supplier will grow in the future as field development and export infrastructure expand.
  • Natural gas accounted for approximately 67% of total domestic energy consumption in 2012.
  • Oil accounted for 30% of total energy use in 2012.
  • Overall, Azerbaijan is a net energy exporter.
  • The country swaps small volumes of natural gas with Iran.
  • More than 90% of total exports are accounted for by oil and gas.

Oil and oil products

  • As of January 2014, proven crude oil reserves were estimated at 7 billion bbls.
  • In 2013, Azerbaijan produced 881 000 bpd of petroleum and other liquids and consumed approximately 85 000 bpd.
  • The world’s first paraffin factory was opened in Azerbaijan in 1823.
  • Almost immediately following its independence in 1991 from the Soviet Union, the country allowed foreign participation in its oil sector.
  • In general, hydrocarbons are produced under production sharing agreements.
  • SOCAR produces approximately 20% of the country’s oil output.
  • SOCAR’s Geneva based subsidiary Socar Trading markets much of the oil.
  • The industry is regulated by the Ministry of Industry and Energy.
  • Oil production increased from 315 000 bpd in 2002 to 1 million bpd in 2010.
  • Production has declined since 2010, falling to 932 000 bpd in 2012 and 881 300 bpd in 2013.
  • The EIA expects production to drop to 852 000 bpd this year.
  • Azerbaijan produces three grades of crude oil. SOCAR produced bbls, Azeri BTC and Azeri Light.
  • The country exported approximately 738 000 bpd of crude in 2013.
  • Crude oil exports peaked in 2010, but have fallen every year since as production has declined.
  • Azerbaijan is mainly a crude oil and condensate exporter.
  • The majority of refined products exported go to Russia and Georgia.
  • As of January 2014, there was a crude oil refining capacity of 399 000 bpd.
  • Crude oil is refined domestically by two refineries.
  • The Baku refinery has a capacity of 239 000 bpd and the New Baku refinery at 160 000 bpd.

Natural gas

  • In January this year, proven natural gas reserves were approximately 35 trillion ft3.
  • In 2012, Azerbaijan produced 607 billion ft3 of dry natural gas and consumed 379 billion ft3.
  • Natural gas plays a critical role domestically and its importance is likely to grow in the future.
  • Azerigaz, a SOCAR subsidiary, is responsible for natural gas, processing, transport, distribution and storage, mainly in the domestic market.
  • Azerbaijan became a net exporter of natural gas in 2007.
  • In 2013, Azerbaijan exported approximately 240 billion ft3.
  • Most of the natural gas exported is destined for Turkey, but some small supplies go to Greece.

Adapted by Claira Lloyd

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