Equinor reveals payments for energy projects in Azerbaijan for 2024

Norwegian oil and gas company Equinor paid the government of Azerbaijan $465 million for mineral extraction activities in 2024, Report informs referring to the company.

Of this amount, $30 million were tax payments, and $435 million were host government entitlements.

For comparison, in 2023, Equinor's tax payments in Azerbaijan amounted to $50 million, and host government entitlements were $485 million. The company explains the decrease in tax payments in 2024 mainly due to falling oil and gas prices.

In addition, Equinor transferred $22.3 million in tax payments to the Norwegian government as part of energy projects in Azerbaijan. As part of energy projects, the company paid $2.5 million in taxes for participation in the operation of the Baku-Tbilisi-Ceyhan pipeline, $50 million for the Equinor Apsheron AS project (Ashrafi-Dan Ulduzu-Aypara), and commitments under the Azeri-Chirag-Gunashli project amounted to $435 million.

On December 22, 2023, Equinor concluded an agreement with SOCAR to sell its assets in Azerbaijan to the State Oil Company. In particular, Equinor sold SOCAR its stakes in the Azeri-Chirag-Gunashli (ACG) development projects and the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, as well as a 50% stake in the Karabakh field development project (the Ashrafi-Dan Ulduzu-Aypara structure). The deal to sell the stake in the Karabakh project was closed in April 2024.

In July 2024, the Norwegian company signed an amended and final agreement with SOCAR and Indian ONGC Videsh Limited for the sale of 7.27% in the ACG project and 8.71% of shares in the pipeline company BTC Co, which is the operator of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline.

The contract for the development of the Azeri, Chirag, and deepwater Gunashli fields was signed in 1994. Its term was to expire in 2024, but in September 2017, a new contract was signed, scheduled to last until 2050. The Production Sharing Agreement (PSA) for Ashrafi-Dan Ulduzu-Aypara was concluded in 2018. Currently, SOCAR owns 100% equity participation in the PSA.

On September 20, 2024, BP and SOCAR signed a memorandum of understanding for two offshore areas – the Karabakh oil field and the Ashrafi-Dan Ulduzu-Aypara structure in the Azerbaijani sector of the Caspian Sea. The document notes BP's intention to join the agreements for the exploration and development of two oil and gas condensate blocks in the Azerbaijani sector of the Caspian Sea.