Although Azerbaijan is one of the world’s oldest onshore
oil producing countries total oil output has been rising and is forecast
to rise further as a number of offshore fields in the Caspian Sea come
onstream, developed by foreign companies. Onshore oil now only forms a
small and dwindling part of Azerbaijani production.
Similarly gas production began to increase in 2007 and will continue to
rise rapidly as the offshore fields are developed, particularly the Shah
Deniz gas/condensate field.
Growing oil output will stimulate oil consumption growth
for transport in Azerbaijan once the global recession draws to an end.
However the bulk of the oil is produced for export through the BTC
pipeline to Ceyhan in Turkey. Exports are expected to peak around 2015
before slowly declining.
Gas consumption is also increasing for both industrial and residential
use with the country becoming a net gas exporter in 2007 with Turkey
dominating the market.