Azernews.Az

Akbar Novruz

Read more

2026 marks the 30th anniversary of the Shah Deniz Field project, one of the most significant milestones in the modern history of Azerbaijan’s oil and gas industry and a key pillar of the country’s rise as a major international energy supplier, AzerNEWS reports.

Thirty years ago, on June 4, 1996, the Shah Deniz Production Sharing Agreement (PSA) was signed in Baku between SOCAR and a consortium of foreign energy companies led by bp. The agreement was later ratified by the Milli Majlis and officially entered into force on October 17 of the same year.

Today, Shah Deniz stands as one of the world’s largest gas-condensate fields and remains bp’s largest-ever gas discovery globally.

Located in the deep-water section of the Caspian Sea approximately 70 kilometers southeast of Baku, the field stretches across more than 140 square kilometers at water depths ranging between 50 and 600 meters.

The giant field was officially discovered in 1999 with initial reserves estimated at approximately 1 trillion cubic meters of gas and 2 billion barrels of condensate.

First production from Shah Deniz began in 2006, making this year also the 20th anniversary of first gas production from the field.

Over nearly two decades, Shah Deniz has become a secure and reliable supplier of natural gas to Azerbaijan, Georgia and Türkiye through the South Caucasus Pipeline.

Following the completion of the Southern Gas Corridor in December 2020, Shah Deniz emerged as a major new source of energy supply for Europe, delivering Caspian gas to European consumers thousands of kilometers away.

The project has played a central role in strengthening Azerbaijan’s geopolitical and economic importance in regional and international energy markets while contributing significantly to state revenues and foreign investment inflows.

According to project data, the development of Shah Deniz has brought Azerbaijan its largest volumes of foreign direct investment while supporting the creation of modern offshore facilities, export infrastructure and advanced onshore assets built to international standards.

The second phase of the project, known as Shah Deniz 2, moved forward after the consortium approved its final investment decision on December 17, 2013. Production from Shah Deniz 2 officially began in 2018.

In 2025 alone, the field produced approximately 27 billion standard cubic meters of gas and around 4 million tons of condensate, equivalent to nearly 32 million barrels, from the Shah Deniz Alpha and Shah Deniz Bravo platforms.

Since production began, the field has produced approximately 271 billion cubic meters of gas and around 53 million tons of condensate by the end of the first quarter of 2026.

The field also continues to demonstrate exceptional operational performance within bp’s global portfolio. According to company figures, 17 of bp’s 20 highest-producing wells worldwide are located at Shah Deniz.

The project’s top-producing well currently delivers around 28,000 barrels of oil equivalent per day.

A total of 34 wells have been drilled at Shah Deniz to date, including 11 wells under Shah Deniz 1 and 23 wells under Shah Deniz 2. Of these, 32 wells are currently in active production.

Since 2006, around 271 billion cubic meters of Shah Deniz gas have been transported through the South Caucasus Pipeline and its expanded infrastructure, including supplies to Azerbaijan’s domestic market.

By the end of the first quarter of 2026, total capital expenditure invested into the Shah Deniz project had reached approximately $31 billion.

The project has also maintained a strong environmental and safety record. Since operations began, around 16 Environmental Impact Assessments and 98 offshore, onshore and near-shore monitoring surveys have been conducted as part of environmental oversight activities.

The 30th anniversary of Shah Deniz is viewed as a historic milestone not only for Azerbaijan’s energy sector, but also for SOCAR, bp and all consortium partners involved in the project, which continues to shape the country’s long-term energy and economic strategy.