UPDATE 2-Azerbaijan's SOCAR signs oil exploration agreements with Exxon, BP

Azeri state energy company SOCAR signed new agreements for oil and gas exploration in Azerbaijan with Exxon Mobil and BP at an energy conference in Baku on Monday. Azerbaijan has proven oil reserves of 7 billion barrels and proven natural gas reserves of 1.7 trillion cubic metres, according to the U.S. Department of Energy.

The country's oil output has been declining for several years after the Azeri–Chirag–Gunashli (ACG) complex of oilfields passed its peak of 50 million metric tons, or 1 million barrels per day, in 2010. BP declined to comment. Exxon Mobil did not immediately reply to a request for comment.

Under a strategy revamp announced in February, BP is increasing spending on its oil and gas business while cutting spending on its low-carbon units. It is also seeking to sell 50% of its solar unit Lightsource bp to a strategic partner for cash and a commitment of future investments, according to a sales document seen by Reuters. BP is already working on stemming declining output at producing fields in the Caspian Sea and its production chief Gordon Birrell said in March that BP was planning to explore for new oilfields in the Azeri Caspian.

BP last year signed a memorandum of understanding with SOCAR on potentially joining the Karabagh oilfield and the Ashrafi-Dan Ulduzu-Aypara exploration area. BP also announced it had taken a final investment decision on its 240 Megawatt Shafag solar plant project it is building via its solar unit Lightsource bp with its joint venture partners Socar and Azerbaijan Business Development Fund in the Jabrayil district of Azerbaijan.

Construction will cost $200 million and be completed by mid 2027, BP said. The project will be linked via so-called virtual power transfer arrangements to the Sangachal oil and gas terminal on the Caspian Sea, operated by BP, and use more gas for exports rather than local power production, BP said. Rebuilding Sangachal's electricification will cost around $230 million. Azerbaijan plans to increase natural gas exports by a total of 8 billion cubic metres (bcm) by 2030, President Ilham Aliyev said at Monday's conference.

The additional volumes will be produced from five existing and new fields, Aliyev said. Azerbaijan exported 25 bcm of natural gas in 2024.

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