The Abu Dhabi National Oil Company (ADNOC) has successfully finalized an agreement with the TotalEnergies-operated Absheron gas field situated in the Caspian Sea near Baku. This arrangement signifies ADNOC's acquisition of a 30 percent stake in the Absheron gas basin, while the Azerbaijani-owned SOCAR and the French energy corporation, TotalEnergies, will continue to hold equal shares of 35 percenteach. The exact transaction price for the sale of their respective 15 percent shares remains undisclosed.

The Absheron gas and condensate field, which sits 100 km southeast of Baku, holds the second-largest gas reserves in the Caspian Sea. At peak productivity, Absheron can produce about 1.5 billion cubic meters of gas annually. In the preceding month, a pivotal milestone was reached with the inauguration of the initial phase of the Absheron development. This landmark event heralded the establishment of an innovative transit connection, seamlessly interlinking a subsea production well and SOCAR's pre-existing facilities in the Oil Rocks field. Notably, this connection boasts a commendable production capacity of 4 million cubic meters of gas per day, destined to fortify Azerbaijan's domestic energy market. The signed Memorandum of Understanding between ADNOC and SOCAR, as well as this “landmark” investment, solidify mutual decarbonization efforts and attempts to upstream projects in the UAE, Azerbaijan, and internationally.

With global gas demands expected to rise steadily over the coming decades, the agreement signals a new era of strategic cooperation between Baku and the UAE. Although ADNOC and TotalEnergies have a longstanding partnership, this deal has significant growth potential and can be a means of further cooperation for growth in European and regional markets. The Executive Director of Low Carbon Solutions and International Growth at ADNOC, Musabbeh Al Kaabi, promised “ADNOC will continue to responsibly meet the world’s energy needs by developing and producing natural gas from world-class assets such as Absheron.” He added that this deal reinforces a “strategic partnership” with SOCAR and TotalEnergies that “unlocks the potential of the Caspian region for decades to come and complements a broader energy collaboration between the UAE and Azerbaijan that will accelerate the growth of the global renewable energy sector, as both countries take bold steps to transition towards a lower-carbon future.” According to SOCAR President Rovshan Najaf, the deal more broadly demonstrates Baku’s reliability as an international energy partner.  

Ties between Azerbaijan and the UAE stand on the foundation of mutual economic interests. The cooperation hasnot only gained momentum through oil and gas partnerships but also through a significant focus on renewable energy endeavors. Masdar, a prominent renewable energy company based in the UAE, has taken notable strides in Azerbaijan, including the establishment of an office in Baku and partnering with SOCARon offshore wind and green hydrogen projects. 

In January 2023, the visit of both Kazakhstan's President Tokayev and Azerbaijan's President Ilham Aliyev to the UAE's Abu Dhabi Sustainability Week (ADSW) further emphasized the strategic partnership. Aliyev highlighted the agreement between Masdar and SOCAR, envisioning the development of four gigawatts of wind and solar power plants, with future expansion plans potentially reaching up to 10 gigawatts. This ambitious project is set to transform Azerbaijan into a substantial green energy exporter, further solidifying the cooperative efforts between the UAE and Azerbaijan. As the UAE continues to diversify its economy away from hydrocarbons, relations with Azerbaijan could prove to become increasingly consequential in the coming decades. 

While Azerbaijan undoubtedly remains a significant and enduring partner, the United Arab Emirates (UAE) and its fellow Gulf Countries are evidently positioning themselves to elevate their ties with the broader region. This was demonstrated though last month’s first Gulf Cooperation Council (GCC)-Central Asian Countries Summit in Jeddah on July 19 where Gulf companies, particularly UAE's Abu Dhabi Ports Group, engaged in Caspian region development, enhancing energy and trade routes. The summit concluded with a joint action plan, aiming for strategic dialogue and cooperation between the GCC and C5 countries for 2023-2027. 
​Amid the shifting landscape of global energy dynamics, this agreement between ADNOC, TotalEnergies, and SOCAR not only aligns with the UAE's vision of sustainable energy leadership but also underscores the intricate web of interdependence that shapes international energy markets. As the energy transition gains momentum, collaboration between countries becomes increasingly crucial to meet growing energy demands while mitigating environmental impacts. This accord not only highlights the tangible benefits of such partnerships, like increased gas production and economic growth, but also emphasizes the value of mutual understanding and shared goals that underpin international cooperation. It's a reminder that energy diplomacy is not just about transactions, but also about fostering stability, innovation, and a greener future on a global scale.