Oil and natural gas bring in around 90% of Azerbaijan’s export revenues, and they finance around 60% of the government budget, ONA reports citing International Energy Agency (IEA) report.
They also supply 98% of primary energy and more than 90% of the country’s electricity. Oil and, more recently, gas have been largely responsible for the remarkable rise in living standards in Azerbaijan since the late 1990s.
Azerbaijan has succeeded in creating a stable upstream oil and gas investment climate and has become an important and reliable oil and gas exporter.
A major achievement of international significance is the recently completed Southern Gas Corridor (SGC) that supplies gas from Azerbaijan’s Shah Deniz 2 field to Europe through Turkey. The SGC gives Azerbaijan a new source of gas export revenues while helping Europe diversify its gas supply routes and improve gas security as its domestic production continues to to decline.
The IEA expects European gas import demand to rise by around 45 billion cubic metres per year (bcm/a) by 2025.1 With capacity increases, the SGC could transport twice the 16 bcm/a production of the Shah Deniz 2 field, which could lead to Azerbaijan becoming a regional gas hub.