bp to enter Karabakh field development project in Caspian Sea

bp is set to join the development of the Karabakh oil field in Azerbaijan’s sector of the Caspian Sea, with plans to formalize its participation later this year.

This follows a Memorandum of Understanding (MoU) signed between bp and SOCAR, Azerbaijan's state oil company, in September 2024, Caliber.Az reports via local media.

In his remarks, Bakhtiyar Aslanbayli, bp's vice-president for the Caspian region, confirmed the development, stating that negotiations are ongoing regarding the terms of bp’s entry into the existing agreement for the field's development. He expressed optimism that the process would be concluded promptly.

"I am hopeful," Aslanbayli stated when asked about the prospects of bp joining the project within this year.

The MoU, signed on September 20, 2024, covers two offshore areas: the Karabakh oil field and the Dan Ulduzu-Ashrafi-Aypara area, both located in the Azerbaijani sector of the Caspian Sea. bp noted that its involvement in these projects could help expedite their realization through synergies between the two partners.

The Karabakh oil field is situated 120 km east of Baku and lies 20-25 km from the Caspian Gunashli field at a depth of 150-200 metres. Meanwhile, the Ashrafi-Dan Ulduzu-Aypara area is located 90-110 km north-east of Baku, at a depth of 80-180 metres.

This project marks a significant shift for the Karabakh development, following the sale of Equinor's 50 per cent stake to SOCAR in December 2023. The transaction was completed in April 2024, following the initial agreement in 2018 between SOCAR and Equinor for the exploration and development of the Ashrafi-Dan Ulduzu-Aypara area and a Risk Service Contract for the Karabakh field. SOCAR and Equinor had previously set up a joint operating company to advance the project.

With bp's potential entry into the Karabakh development, the project is expected to gain additional momentum, contributing further to the diversification of Azerbaijan’s energy sector.

By Vafa Guliyeva