BP Launches First Gas at Azerbaijan's ACG Field, Weighs Multi-Billion Investment
By Bosphorus News Energy Desk
British energy company BP, as operator of the Azeri-Chirag-Gunashli (ACG) field development, announced on 1 June the start of non-associated gas (NAG) production at ACG in the Azerbaijan sector of the Caspian Sea, on behalf of co-venturers SOCAR, MOL, INPEX, ExxonMobil, TPAO and ONGC Videsh. The announcement, confirmed by Azerbaijan's state news agency AZERTAC, marks the first commercial gas production in the field's nearly three-decade history.
The initial well was drilled from the existing West Chirag platform into two reservoirs beneath ACG's producing oil zones: the shallower Qirmaki Upper Sand, where gas presence was confirmed, and the deeper Qirmaki Lower Sand, where high-pressure gas was encountered. Gas and condensate are directed to the Sangachal Terminal through existing ACG offshore infrastructure, eliminating the need for new export systems.
BP estimates ACG's NAG resources at approximately 4 trillion cubic feet of recoverable reserves, with potential upside to 6 trillion cubic feet.
Appraisal Before Any Commitment
Speaking to reporters on 2 June on the sidelines of Baku Energy Week in Azerbaijan, BP's regional president for Azerbaijan, Georgia and Türkiye, Giovanni Cristofoli, said the company is drilling a second well and will evaluate results before making any development decision.
"We've got another well coming up soon, and then we're going to look at the data, and potentially that could lead to a multi-billion-dollar investment with the gas underneath the ACG reservoir," Cristofoli said.
The initial well's primary function is appraisal: to generate reservoir and flow data determining whether full-field gas development is commercially viable. The addendum to the existing ACG production sharing agreement (PSA) enabling NAG exploration and development was signed in September 2024 and runs to the end of the existing PSA in 2049.
TPAO Among the Partners
The ACG co-venturers hold the same participating interests in the NAG project as in the existing PSA: BP as operator at 30.37 percent, SOCAR at 35.3 percent, MOL at 9.57 percent, INPEX at 9.31 percent, ExxonMobil at 6.79 percent, TPAO, the Turkish Petroleum Corporation, at 5.73 percent, and ONGC Videsh at 2.92 percent. TPAO's position places Türkiye inside any future full-field gas development decision.
Shah Deniz, BTC and a Portfolio in Transition
Cristofoli confirmed on 2 June that BP's Shah Deniz Compression (SDC) project carries a total investment of approximately $2.9 billion, is 30 percent complete and remains on track for commissioning in 2029. Shah Deniz accounted for more than half of Azerbaijan's gas output in 2025, producing 27.9 billion cubic meters, according to Azerbaijan's energy ministry data. "That will give new life to Shah Deniz as a gas field," Cristofoli said.
BP is also preparing to transfer operational control of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline to SOCAR from 1 July 2026, in line with contractual obligations. Cristofoli said the transfer does not represent a withdrawal from the project. ACG oil production in the first quarter of 2026 totaled approximately 29 million barrels, averaging around 325,000 barrels per day, down 1.8 percent year on year.
The BTC transfer, the SDC timeline and the ACG gas launch are arriving in the same window, placing BP's Azerbaijani operations at a significant transition point.
Caspian Gas and the European Supply Chain
ACG's NAG resources, if developed at scale, would add significant volume to Azerbaijan's export capacity at a moment when Europe is expanding its Caspian supply base. Gas produced at ACG would move through existing infrastructure at Sangachal, westward through the South Caucasus Pipeline into Georgia, across Türkiye via the Trans-Anatolian Natural Gas Pipeline (TANAP), and into southern Europe through the Trans Adriatic Pipeline (TAP). Türkiye sits inside that transit chain as both a TPAO co-venturer in ACG and the host country for TANAP.
Cristofoli described ACG as "now uniquely positioned as an integrated oil and gas asset, leading the regional industry and contributing to Azerbaijan's plans to increase energy supplies to Europe while supporting the country's energy transition efforts."