Canadian company plans to apply enhanced oil recovery methods in Azerbaijan

Azerbaijan is a world-class oil and gas basin with an established transportation infrastructure serving both domestic and export markets, according to Gary Guidry, President and CEO of Canadian energy company Gran Tierra Energy, Report informs.

Speaking at the 31st Baku Energy Forum, Guidry said the company began analyzing opportunities in Azerbaijan about two years ago following an invitation to do so.

"There is a strong likelihood that we will need to deploy enhanced oil recovery technologies in northern Azerbaijan [Guba-Caspian region], carry out waterflooding operations, and apply various production stimulation methods. Given the scale of our company, it is critically important for us to allocate resources efficiently and maintain a short payback cycle from the moment capital is invested," he said.

According to Guidry, Azerbaijan needs to establish a cost structure that allows each barrel of oil to be produced at the lowest possible cost.

"We are currently conducting detailed geological assessment work in northern Azerbaijan. We are confident that additional seismic surveys and gravity studies will be required. However, the key element remains the use of existing drilling and well data. We are dedicating significant time and effort to analyzing this information, although the full picture has not yet emerged. There are certainly some gaps, but it provides us with a starting point for further work," he added.

As previously reported, Gran Tierra Energy plans to begin seismic surveys and drilling operations in 2027 under a Production Sharing Agreement signed with SOCAR for the exploration, development, and production of oil in the prospective Guba-Caspian region of Azerbaijan.

The contract area covers a structure approximately 65 kilometers in length, from which more than 100 million barrels of oil and over 200 billion cubic feet of natural gas have previously been produced.

The agreement provides for a five-year exploration and appraisal period and a 25-year development phase for any commercially viable discoveries, with an option to extend development by an additional five years. Gran Tierra plans to launch airborne gravity surveys in 2026, followed by seismic operations and drilling in 2027.

The production sharing agreement for the Guba-Caspian region was signed on February 19, 2026. Under its terms, Gran Tierra Energy, which will serve as the project operator, holds a 65% participating interest.