ExxonMobil Signs 50/50 Shale Deal With SOCAR in Middle Kura

ExxonMobil and SOCAR have signed a production-sharing agreement to explore and develop unconventional oil and gas in Azerbaijan's Middle Kura Basin, with each company holding 50% and ExxonMobil acting as operator. The documents were exchanged on 26 September at the Second Azerbaijan International Investment Forum in Baku, in the presence of President Ilham Aliyev.

It is the first time a US supermajor has taken operatorship of an onshore unconventional programme in Azerbaijan, a country whose oil industry has for three decades been built around BP-operated offshore fields. The agreement still needs ratification by the Milli Majlis.

From memorandum to contract

The deal follows a memorandum signed at Baku Energy Week in June 2025 and a further cooperation pact agreed in Washington in August 2025. The acreage lies in the west-central onshore area around Ganja, Yevlakh and Aghjabadi, where the main target is understood to be the Maykop shale sequence.

What the parties have not published is equally important. There is no work programme, no well count, no resource estimate and no production forecast. Economy Minister Mikayil Jabbarov has said Baku is hopeful about a large discovery, but no figures have been given. Unconventional resources only become bankable after core samples, pilot horizontal wells and early production data, which puts any commercial answer several years away.

Why Baku wants it

Onshore oil makes up only about 5% of Azerbaijan's crude output. The flagship Azeri-Chirag-Gunashli complex is mature, and the state has set a goal of holding liquids output near 580,000 barrels per day. A working shale play would not replace offshore volumes, but it could slow the decline, build a local completions workforce and give SOCAR a second onshore growth story. Ratings agencies have flagged the reserve replacement issue: Fitch, which recently affirmed SOCAR at BBB-, expects heavy capital spending through 2030.

The agreement also fits the wider flow of US money into Azerbaijan. US investment into the country rose 47% in the first half of the year. At the same forum, SOCAR signed a separate framework with Comstock Resources to study the marketing of Haynesville LNG outside the United States.

The hard parts

Shale is not only a geology question. The Kura valley is densely farmed and populated, water use for hydraulic fracturing will draw scrutiny, and there is no dedicated gathering or processing system for a multi-pad programme. The Baku-Tbilisi-Ceyhan pipeline has spare capacity, but new crude would first have to reach it. Onshore Maykop oils may also differ in quality from the Azeri Light export blend.

The fair summary is that a contract is signed and an operator is named, but the resource is not booked, wells are not permitted and the infrastructure question is open. Investors should treat the deal as an option on future volumes, not a production forecast.

Sources: SOCAR; Bloomberg; Reuters; Energy News Beat, 26-27 September 2026.