Azerbaijan and Uzbekistan are advancing towards the practical phase of developing hydrocarbon resources on the Ustyurt Plateau, with drilling operations scheduled to commence in 2027. During a state visit to Tashkent, Azerbaijani President Ilham Aliyev announced that the project is in the final stages of exploration. The oil and gas project is jointly owned by Uzbekistan’s Uzbekneftegaz and Azerbaijan’s SOCAR, each holding a 30% stake, while British company BP controls the remaining 40%.
The collaboration between Azerbaijan and Uzbekistan began with a cooperation agreement in August 2024, which initiated geological exploration activities. In July 2025, the parties signed a production-sharing agreement that included a 3D seismic survey covering at least 1,000 square kilometres and the drilling of one exploratory well. BP officially joined the project in May 2026, taking on the role of operator.
The commencement of industrial production on the Ustyurt Plateau is expected to be a lifeline for Uzbekistan, which is experiencing a decline in domestic natural gas production due to depleting reserves. In June 2026, gas production fell to 2.5 billion cubic metres, a 30% decrease compared to the previous year. For the first half of the year, Uzbekistan produced 18.3 billion cubic metres of gas, which is 16% lower than the figures for 2025. In peak years, the country produced around 70 billion cubic metres, but by 2025, annual production had dropped to 42 billion cubic metres.
This decline in production has intensified Uzbekistan’s reliance on gas imports. In the first six months of 2026, the country spent $972 million on gas and liquefied hydrocarbons imports, 1.4 times more than the previous year. The main suppliers are Russia and Turkmenistan. However, during certain months when domestic demand decreases, Uzbekistan exports surplus gas, primarily to China.
