ExxonMobil signs unconventional oil and gas agreement with Azerbaijan

ExxonMobil has signed a memorandum of understanding with Azerbaijan's state-owned Socar on developing unconventional oil and gas resources onshore in the center of the country, the US company said June 3.

It builds on ExxonMobil's long-standing role in production in Azerbaijan, and also in Kazakhstan on the east side of the Caspian, and follows talks between ExxonMobil vice president John Ardill and Azeri President Ilham Aliyev in Baku on June 2.

The agreement targets the "potential prolific value" of unconventional resources in the Ganja-Yevlakh-Aghjabadi area in central Azerbaijan, an ExxonMobil spokesperson said.

Socar is the main producer at Azerbaijan's highly mature onshore fields, with production dating back to the 19th century, and has long been working on developing unconventional prospects.

A 2021 geological study published by Socar notes exploration had taken place in the Yevlakh-Agjabadi depression over more than 90 years, identifying "anticlinal uplifts and structural complications" in Mesocaynozoic sediments.

The latest agreement is "a significant first step in our collaboration to further develop Azerbaijan's resources," the ExxonMobil spokesperson told Platts. "We look forward to bringing ExxonMobil's industry-leading unconventional development technology and execution capability to this partnership."

Azerbaijan is the source for the Azeri Light crude brand produced mainly at the giant ACG offshore complex operated by BP, as well as gas supplied to Europe from the Shah Deniz field, also operated by BP. ExxonMobil is a partner in ACG and the Baku-Tbilisi-Ceyhan crude pipeline.

Azeri Light was last assessed by Platts, part of S&P Global Commodity Insights, at a $1.60/b premium to Dated Brent, reflecting its valued role in producing light oil products and middle distillates, such as jet fuel, gasoline, and diesel.