Azerbaijan is one of the oldest oil producing regions in the world. Its proven reserves were estimated at 7 billion barrels of crude oil and 40.6 trillion cubic feet of natural gas as of December 2015.
Azerbaijan's significant natural gas reserves will play an important role in meeting growing global demand. Production from large offshore fields such as Shah Deniz, Absheron and Umid-Babek will eventually flow through a natural gas pipeline system (the Southern Corridor) connecting the Caspian Sea to Europe.
Nobel Upstream and its partner SOCAR formed the SOCAR-UMID Joint Venture ("JV") in 2008. The JV discovered the Umid field in 2010 and initiated a pilot production scheme in 2012. The JV also carried out 3D seismic surveys over the Babek prospective structure. In 2017 Nobel Upstream and SOCAR transitioned from the SOCAR-UMID JV to the Umid Babek Exploration and Production (“UB E&P”) company. Nobel Upstream holds a 20% interest in UB E&P, which is the sole contractor under the Umid-Babek Risk Service Agreement (“RSA”). The RSA was ratified by the parliament (“Milli Majlis”) and signed into law by the President of the Republic of Azerbaijan in May 2017. Four wells have been drilled and are in production, with a fifth well being drilled currently. As of 2019, 2P reserves are estimated at 3.5 Tcf gas and 99.6 MM barrels condensate. 3P reserves are estimated at 21.2 Tcf gas and 607.6 MM barrels condensate.
Nobel Upstream has also completed an intensive review of brownfield projects in Azerbaijan where conventional technologies (3-D seismic imaging, horizontal drilling, etc.) can be used to access oil that was bypassed in the older fields.