Energy
Absheron Gets Final Investment Decision as SOCAR and ExxonMobil Sign Kura Basin PSA
4
Min
Two energy agreements signed around the Azerbaijan International Investment Forum in late September give Baku its most tangible upstream news of the year: a final investment decision (FID) on full-field development of the Absheron gas and condensate field, and a production-sharing agreement (PSA) with ExxonMobil for unconventional hydrocarbons, according to Hydrocarbon Processing.
On Absheron, SOCAR, TotalEnergies and Abu Dhabi's XRG reached the FID. President Ilham Aliyev said the second phase would add about 5 billion cubic metres of annual gas production within three to four years. The field sits offshore in the Caspian and is one of the main sources of incremental volumes for Azerbaijan's export system.
The second deal is a PSA between SOCAR and ExxonMobil covering unconventional hydrocarbons in the Middle Kura basin. Each party holds 50% and ExxonMobil is the operator. Unconventional plays are technically harder and capital-intensive, and no resource estimates or investment figures were disclosed, so the commercial scale is still unknown.
Context matters for how much weight to give the numbers. Azerbaijan exported about 25 billion cubic metres of gas last year, roughly half of it to EU countries, and Aliyev acknowledged that further growth to Europe would require additional pipeline capacity. Export revenue has also been under pressure: CBJ reported earlier this month that gas exports reached 16.37 bcm in the reporting period while revenue slipped 4.8% to $5.7 billion.
The Absheron FID therefore addresses supply, but not yet routing. The additional 5 bcm a year will compete for space in a system whose onward capacity is the binding constraint, and prices remain the other variable. Aliyev stressed that oil and gas will keep dominating the economy and generating wealth to be reinvested, while the non-oil sector already makes up more than 70% of GDP, as noted by Report.az in its forum coverage.
For investors and suppliers, the practical signals to watch are contract awards for Absheron phase two, the first ExxonMobil work programme in the Middle Kura basin, and any announcement on export capacity. Until those appear, the headline is a strong vote of confidence from three major international partners rather than a change in near-term volumes.
