SOCAR Signs Exploration Deal with Gran Tierra Energy for Onshore Block

The State Oil Company of the Azerbaijan Republic (SOCAR) signed an Exploration, Development, and Production Sharing Agreement with Canada-based Gran Tierra Energy Inc. on February 19 for a promising onshore block in the Guba-Caspian region, expanding Azerbaijan's upstream exploration portfolio beyond its traditional offshore Caspian strongholds.

The agreement marks a notable strategic shift for SOCAR, which has historically concentrated its exploration and production activities in the offshore Caspian basin, home to mega-projects such as Azeri-Chirag-Gunashli (ACG) and Shah Deniz. The move to develop onshore resources in the Guba-Caspian area signals Baku's intent to diversify its hydrocarbon production base as mature offshore fields experience natural decline.

SOCAR President Rovshan Najaf has indicated that Azerbaijan is beginning to develop unconventional oil and gas resources as part of a broader strategy to sustain production levels over the coming decades. Oil output at the ACG field is projected at 120.1 million barrels for 2026, slightly lower than the 123 million barrels produced in 2025, with production expected to average over 550,000 barrels per day in the first quarter of 2026, according to Trend News Agency.

Gran Tierra Energy, which has operations primarily in Latin America, brings expertise in onshore exploration and development that complements SOCAR's offshore capabilities. The partnership reflects a growing trend of international energy companies seeking opportunities in Azerbaijan's underexplored onshore basins, which geological surveys suggest may hold significant hydrocarbon potential.

The deal comes alongside other strategic moves by SOCAR on the international stage. In January, SOCAR President Najaf met with the CEO of Abu Dhabi National Oil Company (ADNOC) Group to discuss the full-scale development of the Absheron gas-condensate field, with production scheduled to begin on September 1, 2029. SOCAR has also announced plans to launch geological exploration at investment blocks in Uzbekistan's Ustyurt oil and gas region.

Azerbaijan exported 3.6 million tons of crude oil worth $1.70 billion and 4.38 billion cubic meters of natural gas worth $1.28 billion in January-February 2026, as reported by the State Customs Committee. The onshore exploration deal with Gran Tierra Energy is part of SOCAR's broader effort to ensure that production levels remain robust as Azerbaijan expands its role as a European energy supplier.

Further Reading

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