This year marks the 30th anniversary of the signing of the Production Sharing Agreement (PSA) for the Shah Deniz field, one of Azerbaijan’s largest energy projects, APA-Economics reports.
Thirty years ago, on June 4, 1996, the PSA for the Shah Deniz field was signed in Baku between bp, SOCAR and other foreign partners. The agreement was ratified by the Milli Majlis and entered into force on October 17 of the same year.
Shah Deniz is considered one of the world's largest gas-condensate fields and the largest gas field ever discovered by bp. Located on the deepwater shelf of the Caspian Sea, 70 kilometers southeast of Baku, the field’s reserves are estimated at approximately 1 trillion cubic meters of gas and 2 billion barrels of condensate.
First gas was produced from the field in 2006. Thus, this year also marks the 20th anniversary of the start of production at Shah Deniz.
In December 2013, the final investment decision for the Shah Deniz 2 project was taken, while the second stage of the project began production in 2018. Following the full commissioning of the Southern Gas Corridor in December 2020, Shah Deniz gas began reaching European markets.
In 2025, a total of 27 billion standard cubic meters of gas and 4 million tons (approximately 32 million barrels) of condensate were produced from the Shah Deniz Alpha and Shah Deniz Bravo platforms.
From the start of production through the end of the first quarter of 2026, a total of 271 billion cubic meters of gas and nearly 53 million tons of condensate were produced from the field. During the same period, approximately 271 billion cubic meters of Shah Deniz gas were exported through the South Caucasus Pipeline and its expanded system.
A total of 34 wells have been drilled in the field to date, 32 of which are currently in operation. Shah Deniz wells are among bp’s most productive wells. Seventeen of the company’s 20 highest-producing wells worldwide are located in this field. By the end of the first quarter of 2026, total capital investment in the Shah Deniz project had reached $31 billion.
The development of the Shah Deniz field has strengthened Azerbaijan’s position in regional and international energy markets while attracting one of the largest volumes of foreign direct investment in the country’s history. As part of the project, new offshore platforms, onshore terminals and export infrastructure were established, and Azerbaijan became one of Europe’s key partners in energy security.
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