Naftogaz’s deal with SOCAR strengthens Ukraine’s energy security and deepens SOCAR’s regional presence through gas and exploration partnerships.
Ukraine's state-owned energy giant, Naftogaz Group, has entered into its first natural gas supply agreement with SOCAR Energy Ukraine, a subsidiary of the Azerbaijani state oil company, SOCAR. This new Transbalkan gas deal marks a significant development in Ukraine’s ongoing efforts to diversify its energy sources and enhance national energy security.
The CEO of Naftogaz, Sergii Koretskyi, emphasized the strategic relevance of the agreement, describing it as a modest but critical step toward long-term collaboration. He noted that this partnership not only opens the door for more extensive cooperation with Azerbaijan in the future but also reinforces Ukraine's efforts to reduce dependence on traditional energy routes. Koretskyi acknowledged the role of the Ukrainian leadership—specifically the President, the Government, and the Ministry of Energy—in facilitating this deal, while also extending appreciation to the Azerbaijani side for their cooperation and trust.
SOCAR Energy Ukraine, established in 2008, has grown into a key player in the Ukrainian energy market. The company is engaged in the wholesale and retail distribution of petroleum products, natural gas, and aviation fuel. As of the end of 2023, it operated a network of 56 fuel stations spread across 11 Ukrainian regions. Since its inception, SOCAR has invested over $294 million into the Ukrainian subsidiary, underlining its long-term commitment to the region.
In parallel developments, SOCAR has been actively expanding its international energy partnerships. In June 2025, SOCAR signed a multi-year contract with Germany’s state-owned energy company, SEFE, to supply 1.5 billion cubic meters of gas annually. In 2024 alone, Azerbaijan exported 12.9 billion cubic meters of gas to European nations, highlighting its growing role as a reliable energy supplier to the continent.
Further east, SOCAR has deepened its engagement with Uzbekistan’s energy sector. On July 24, Uzbekistan’s Ministry of Energy, SOCAR, and Uzbekneftegaz JSC signed a Production Sharing Agreement (PSA) focused on hydrocarbon exploration and potential production in the Ustyurt oil and gas region. The project is poised to initiate 3D seismic exploration over an area of at least 1,000 square kilometers, followed by the drilling of a deep exploration well.
According to Bahodirjon Sidiqov, CEO of Uzbekneftegaz, the initiative aims to discover significant oil reserves in six distinct areas of the Ustyurt Plateau, involving wells that could reach depths of 5,000 to 6,000 meters. The overall investment for this exploration phase is estimated at $1 billion, with the cost depending on the volume of extractable reserves identified.
SOCAR and Uzbekneftegaz have a history of collaboration. In August 2024, they signed an agreement to expand cooperation across the oil and gas sector. That same month, during a business forum, Uzbekistan’s Minister of Investment, Industry, and Trade, Laziz Kudratov, highlighted plans for further geological exploration in the Ustyurt Plateau in partnership with SOCAR. Although a previous collaboration with BP in the region began in 2018, BP exited the project in 2021, citing a shift in its global sustainability strategy.
These latest agreements and projects underline SOCAR’s strategic drive to strengthen its presence across Europe and Central Asia, while Ukraine’s partnership with SOCAR illustrates a key step forward in bolstering its national energy resilience through diversified sources.
