Following the decision of Malaysian oil and gas company Petronas to sell its stakes in the production sharing agreement for the exploration and development of the Shah Deniz field in the Azerbaijani sector of the Caspian Sea, State Oil Company SOCAR acquired 4.35 per cent of stakes in accordance with the terms of the agreement between Shah Deniz project partners. LUKOIL and bp, both partners at Shah Deniz consortium, acquired the other part of Petronas’s 15.5 per cent stake in the project.
Ultimately, SOCAR’s direct participation in the project is growing to 14.35 per cent. The respective agreement is expected to enter into force in January 2022. Apart from this, the Ministry of Economy of Azerbaijan and SOCAR hold 51 per cent and 49 per cent shares in Southern Gas Corridor Closed Joint-Stock Company, which in turn has a 6.67 per cent stake in the Shah Deniz project.
Along with the shift in stakes of companies in the Shah Deniz project, equivalent changes took place in the distribution of stakes between companies in the South Caucasus Pipeline, one of the segments of the Southern Gas Corridor.
The production sharing agreement (PSA) for the exploration and development of the Shah Deniz prospect in the Azerbaijani sector of the Caspian Sea was signed on 4 June 1996 between SOCAR and a consortium of international companies. The field is located in the Azerbaijani sector of the Caspian Sea, 70 kilometres southeast of Baku. In 2018, the first natural gas produced under the Shah Deniz 2 project was delivered to Turkey. Starting from 31 December 2020, natural gas from the Shah Deniz field is being supplied to European countries via the Southern Gas Corridor.