JOINT PROJECTS IN THE OIL AND GAS INDUSTRY OF KAZAKHSTAN AND AZERBAIJAN: PROSPECTS FOR COOPERATION AND EFFECTIVE MANAGEMENT MODELS

Jakiyev A.M. Abdykhalykov K.S.
2025 Oil Gas Scientific Research Project Institute

SOCAR Proceedings
2025 Issue 4 216 - 226 pp.

This article examines the prospects for joint projects between Kazakhstan and Azerbaijan in the oil and gas sector and identifies effective management models for such cooperation. The study employs a multi-source research design, combining: (1) analysis of legal and regulatory frameworks, including primary petroleum legislation, production sharing agreements (PSAs) and bilateral treaties; (2) review of institutional and project management structures, such as joint ventures, consortia, public–private partnerships and the roles of national oil companies (KazMunayGas and SOCAR); and (3) assessment of the broader geopolitical and economic context through policy reports, documents of international financial institutions and energy market outlooks. Empirically, the paper uses case studies of the Baku–Tbilisi–Ceyhan (BTC) pipeline, the North Caspian Sea PSA (Kashagan), and recent SOCAR–KazMunayGas transit arrangements to illustrate concrete models of cross-border cooperation and risk-sharing. The analysis shows that, while both countries have successfully leveraged PSAs and JV structures to attract capital and technology, their legal trajectories diverge: Azerbaijan has prioritized long-term contract stability, whereas Kazakhstan has gradually shifted toward stronger state participation and revised fiscal regimes. The paper argues that future Kazakhstan–Azerbaijan projects—particularly in trans-Caspian transit and regional connectivity—will depend on clear and predictable legal frameworks, balanced JV/PPP structures, and the involvement of international financial institutions to mitigate political and financing risks. These elements form the basis for more resilient, diversified and mutually beneficial energy cooperation between the two states.

Azerbaijan , Caspian Sea , energy security , foreign investment , joint ventures , Kazakhstan , oil and gas industry , production sharing agreements , public–private partnerships , trans-Caspian cooperation

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The Kazakh Oil & Gas Association «PetroCouncil», Atyrau, Kazakhstan
Kazakh-British Technical University, Almaty, Kazakhstan

The Kazakh Oil & Gas Association «PetroCouncil»
Kazakh-British Technical University

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