G3 SitRep - Azerbaijan’s Energy Sector: Balancing Production and Export Dynamics

Daily SitReps

G3 SitRep - Azerbaijan’s Energy Sector: Balancing Production and Export Dynamics

G3 Team

Tue February 13, 20247:12 PM EST

Last Updated: Fri March 22, 20248:17 PM EDT

In January 2024, Azerbaijan witnessed a 4.5% increase in gas exports compared to the previous year, reaching 2.3 bcm. Notably, about 48% of these exports were directed to Europe, highlighting Azerbaijan’s growing role as a significant regional gas supplier. The Trans-Anatolian (TANAP) gas pipeline facilitated the transportation of 0.4 bcm of gas to Turkey, underscoring the strategic importance of infrastructure investments in enhancing regional energy connectivity.

While gas exports flourished, the country experienced a 5.6% decline in oil production in January 2024. Despite this setback, Azerbaijan remains a crucial player in the global oil market, with the Azeri-Chirag-Gunashli (ACG) block contributing 56% of the nation’s total oil output. Collaborative efforts between Azerbaijan and international partners have been pivotal in sustaining oil production levels and ensuring market stability.

Looking ahead, the government forecasts a continued upward trajectory in gas production, targeting 49.064 bcm in 2024. Additionally, oil production is projected to reach 29.492 million tonnes, reflecting a strategic commitment to advancing energy sector growth and enhancing export competitiveness. The recent contract extensions for the development of the ACG and Shah Deniz fields underscore Azerbaijan’s long-term vision for sustaining energy production and attracting foreign investment.

Furthermore, the commencement of production at the Absheron field in July 2023 marks a significant milestone in Azerbaijan’s energy diversification strategy. Joint efforts between TotalEnergies and SOCAR demonstrate the country’s commitment to expanding its energy portfolio and leveraging untapped resources for domestic and international consumption.

Overall, Azerbaijan’s energy sector continues to evolve, driven by a combination of strategic investments, technological advancements, and international partnerships. As the country navigates global energy transitions and market dynamics, proactive measures to optimize production, enhance infrastructure, and foster sustainable development will be crucial in ensuring long-term resilience and competitiveness in the global energy landscape.

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