Azerbaijan celebrates 30th anniversary of Shah Deniz field

Today marks the 30th anniversary of the development of the Shah Deniz field, located in Azerbaijan’s sector of the Caspian Sea.

The anniversary represents a significant milestone for the Azerbaijani government, BP, which operates the field, and the Shah Deniz consortium partners, Caliber.Az reports, citing local media.

Thirty years ago, on June 4, 1996, the Shah Deniz Production Sharing Agreement (PSA) was signed in Baku between SOCAR and a consortium of international energy companies.

The agreement was later ratified by the Milli Majlis and entered into force on October 17 of the same year.

Shah Deniz is regarded as one of the world’s largest gas-condensate fields and remains the biggest gas discovery ever made by BP.

For nearly two decades, the field has served as a stable and reliable source of natural gas supplies for Azerbaijan, Georgia, and Türkiye through the South Caucasus Pipeline.

Following the completion of the Southern Gas Corridor in December 2020, Shah Deniz became an important new source of energy for Europe, delivering Caspian natural gas to customers thousands of kilometres away.

The discovery and development of the field have strengthened Azerbaijan’s position as a key regional and global gas supplier while generating substantial oil and gas revenues. The project has attracted the largest volume of foreign direct investment into the country and contributed significantly to economic growth. It has also enabled the development of modern onshore facilities, offshore infrastructure, and export routes built to international standards and supported by advanced technologies.

The 30th anniversary of Shah Deniz is considered a landmark event in the modern history of Azerbaijan’s oil and gas industry and an important date for SOCAR, BP, and all partners involved in the PSA.

Located about 70 kilometres southeast of Baku in the deep-water section of the Caspian Sea, the field lies at depths ranging from 50 to 600 metres and covers an area of more than 140 square kilometres.

Shah Deniz was discovered in 1999, with initial reserves estimated at around 1 trillion cubic metres of natural gas and 2 billion barrels of condensate.

Commercial production began in 2006, marking its 20th year of operation in 2026. On December 17, 2013, the Shah Deniz consortium announced the final investment decision for the second phase of development, and Shah Deniz 2 officially came on stream in 2018.

By Bakhtiyar Abbasov