A Guide to Baku, Azerbaijan: Oldest Oil Producing Region in the World

The largest city located below sea level, and a UNESCO World Heritage Site, Baku, Azerbaijan, boasts scenic nature attractions and an oil industry dating back many centuries.

The Flame Towers located in the city center at Baku are iconic of the city's ancient "burning" culture : At 620 ft high, they are completely covered with LED lights and look like three gigantic torches. Source: Getty Images

Situated in the southern part of the Absheron Peninsula, Baku always was the “gateway” between Asia and Europe: During many centuries, the trade routes of the Great Silk Road passed through Azerbaijan.

Windy for most of the year, Baku is known as the “City of Winds” for its harsh weather. However, thousands of visitors should expect to have the warmest welcome here, since Azerbaijan is friendly and has open borders for everyone. International travelers can apply for and receive the entry visa online; typically, the process takes no more than 3 days.

As the cultural, political, and economic capital of Azerbaijan, Baku is home for many ancient as well as modern sites. One of them is Yanar Dag (literally, “burning mountain”). Ancient Zoroastrians used to travel all the way to Yanar Dag from Persia to view the plumes of gas seeping through the soil that cause a continuously burning fire. The area is ablaze even today due to the seeping gas from shallow gas formations, although its strength has diminished over the centuries.

The name Azerbaijan comes from the Persian word “Azer” which means “fire.” The Zoroastrians even built several temples around the city where they worshipped the fire. This ancient “burning” culture is still alive in the modern architecture of Azerbaijan. The Flame Towers located in the city center are iconic: At 620 ft high, they are completely covered with LED lights and look like three gigantic torches.


The first thing one should do in Baku is go on a city tour. In addition to the Flame Towers and other hi-tech skyscrapers, there are many charming narrow streets and ancient buildings situated in the Inner City, which is designated a UNESCO World Heritage Site. One of them is the Maiden Tower which is an Azeri national emblem. Legend has it that a medieval king wanted to force his only daughter into an arranged marriage. The princess protested, so the king built a tower for her with no escape. She threw herself from atop it—consequently, the tower became a symbol of freedom. It also houses a museum, and as one moves from the lower floors to the top, he/she can see the different artifacts, each from a different period of the city’s history, telling the story of Baku’s evolution.

Another prominent attraction of modern Baku is the seaside park, commonly known as Boulevard. Currently, it stretches along the coastline for more than 32,000 ft, but its construction is ongoing with a target length of 82,000 ft in the near future.

However, Azerbaijan is more than just Baku, and the country is also famous for its nature. Other cities like Gabala, Sheki, and northwest regions (Guba, Gusar, and Zagatala) are very popular among tourists. Those visiting Gabala should try a 10-km cable ride to Mount Tufandag—picturesque views are guaranteed.

In recent years, the huge ski resort of Shahdag built in the mountains of Gusar is  attracting winter sports fans. Another natural wonder of Azerbaijan is located in the Goygol region—a lake that formed between mountains 1,000 years ago after a strong earthquake, and famous for its pristine beauty.

Petroleum Industry in Azerbaijan

Azerbaijan is known as the oldest oil-producing region in the world. Industrial oil production started in Azerbaijan in the second half of the 19th century from the dug wells in Bibieybat and Balakhany fields. Its development was largely facilitated by the widespread use of kerosene lamps and the invention of an internal combustion engine that required gasoline. By the beginning of the 20thcentury, Azerbaijan became the leading oil-producing region worldwide and was producing more than half of the world's supply of oil.

During the Soviet period, the region kept its strategic importance and reached more than 3.2 million bbl of extracted oil in 1941. After World War II, the discovery of the Gyurgyany Deniz field led to the beginning of the country’s offshore oil production. More information about Azeri oil history can be found in Azerbaijan International magazine and on the country’s web portal.

Nowadays, the oil industry in Azerbaijan is supported by mature onshore fields and numerous offshore assets. As in the past, the region attracts significant foreign investments, and many industry majors like BP and Chevron have a share in joint ventures with the local companies. Among the most significant shelf giants is Azeri-Chirag-Deepwater Gunashli (ACG) field, which is the largest oil field in the Azerbaijan sector of the Caspian basin with more than 5 billion bbl of recoverable reserves. The field currently has six integrated production and drilling platforms and is producing around 600,000 B/D. Oil is transported via the Baku-Tbilisi-Ceyhan pipeline passing through Azerbaijan, Georgia, and Turkey.

Apart from oil, the Caspian Sea deepwater shelf assets contain significant quantities of gas. Shah Deniz is the biggest producing gas field in Azerbaijan. According to BP, its yearly production is 9 billion m3 of gas with approximately 50,000 B/D of gas condensate production.

The Future is Bright

Even though many Azeri offshore fields are currently in their decline phase, the industry’s future is still optimistic. In September 2017, the contract for ACG field was extended to 2050. Furthermore, the second phase development of Shah Deniz field will start this year. It comprises the building of two additional fixed offshore platforms, drilling more than 20 subsea wells, expanding a current gas processing facility, and building a pipeline to Europe for gas transportation.

The Shah Deniz phase II final investment decision is anticipated at $40 billion and is considered one of the largest gas developments in the world. Such huge investments can help the country find more prospective offshore assets, and also grow its potential for nonpetroleum industries.

The Maiden Tower in Baku. Source: Getty Images
Baku is the largest city in the world located below sea level at −28 m.
The city is well known for its hospitality and as a hub for international events. It hosted the Eurovision Song Contest in 2012, European Games in 2015, Islamic Solidarity Games in 2017, and will be a main arena for the 2019 UEFA Europe League Final.
SPE has recognized Azerbaijan as an important oil and gas region. Holding the Caspian Technical Conference and Exhibition (CTCE) in November 2017 is a great example of a current SPE activity in the Caspian basin. The 2017 CTCE was a collaboration with the Azerbaijan Society of Petroleum Geologists,  the local chapter of the European Association of Geoscientists and Engineers, and the Society of Exploration Geophysicists, providing delegates the opportunity to attend all events under one roof.

There are several petroleum universities in Azerbaijan with active SPE chapters such as the Baku Higher Oil School, State Oil Academy, and the Khazar and Qafqaz universities.

Elshad Yadigarov is a graduate surface well testing engineer at Schlumberger, based in Azerbaijan. He  recently graduated from the Norwegian University of Science and Technology with a master’s degree in petroleum/reservoir engineering and joined Schlumberger in September 2017. After completion of the fixed-step training program he will be responsible for planning and conducting surface well test jobs. He will also be involved in reservoir fluid sampling and downhole pressure-temperature acquisition operations. Yadigarov had previously worked for BP as a reservoir engineer and was responsible for conducting reservoir simulation analysis and well planning. He can be reached at

Ravana Karimova is an operations geologist in BP Azerbaijan. She graduated with a bachelor’s degree from Azerbaijan State Oil Academy with a major in petroleum geology in 2011 and had an internship in BP Azerbaijan. She recently graduated with a master’s degree from the Norwegian University of Science and Technology in petroleum geoscience. During her study in Norway and Azerbaijan, Karimova was actively involved with SPE. She can be reached at