BP and SOCAR to sign new agreement on Karabakh oil field

BP-Azerbaijan and the State Oil Company of the Republic of Azerbaijan (SOCAR) are set to sign a new agreement on the Karabakh oil field project on June 3, sources at BP confirmed.

The document will be signed as part of the 30th Anniversary Caspian Oil and Gas Exhibition and the 13th Caspian International Power and Green Energy Exhibition, currently taking place in Baku, Caliber.Az reports per local media.

The new agreement follows a Memorandum of Understanding signed by BP and SOCAR on September 20, 2024.

That memorandum covered cooperation on the Karabakh field as well as the Ashrafi-Dan Ulduzu-Aypara (ADUA) structure.

To recall, as of May 2025, BP and SOCAR continue to strengthen their strategic partnership through a series of significant joint projects. Among the most prominent is the development of a 240 MW solar power plant in the Jabrayil region of Azerbaijan. The joint venture, named Shafag (Jabrayil) Solar Limited, includes BP, SOCAR, and the Azerbaijan Investment Company.

The project is intended to transform the liberated territories into a green energy zone and is expected to be operational by mid-2027. A "Virtual Power Transfer Arrangement" will allow renewable energy generated by the plant to be delivered to the national grid and the Sangachal terminal.

In parallel, the two companies are working together on methane emissions reduction in Azerbaijan's oil and gas sector. A memorandum of understanding signed in late 2023 sets the framework for joint efforts to improve methane monitoring, reporting, and mitigation technologies, supporting broader global climate goals.

BP and SOCAR have also expanded their cooperation in upstream oil and gas projects. A memorandum signed in 2024 covers exploration and development in the Azerbaijani sector of the Caspian Sea, specifically in the Karabakh field and the Ashrafi–Dan Ulduzu–Aypara block. BP is expected to formally join the Karabakh project by the end of 2025, bolstering Azerbaijan’s plans to increase energy production and exports.

Beyond Azerbaijan, the partnership has taken a step into the Eastern Mediterranean. In March 2025, BP, SOCAR, and NewMed Energy were awarded licences to explore natural gas in Israeli waters near the Leviathan field. The project will be operated by SOCAR, with each partner holding an equal share. This move reflects the companies’ interest in diversifying their upstream portfolios and enhancing regional energy security.

Further agreements are expected soon. SOCAR is reportedly in final negotiations with BP and ExxonMobil for additional oil and gas exploration deals in Azerbaijan. These upcoming agreements align with Baku’s ambition to increase its natural gas exports by 8 billion cubic metres by 2030.

By Aghakazim Guliyev