AGP Executive Report

Central Banking Cooperation: The OTS Council of Central Banks held its second meeting in Baku, with Prime Minister Ali Asadov and OTS Secretary General Kubanychbek Omuraliev stressing closer monetary policy coordination, banking stability, and financial resilience across Turkic states. Energy & Investment: bp started non-associated gas production from Azerbaijan’s ACG field and is expanding multilateral drilling across the offshore asset, while BP’s CEO Meg O’Neill is pushing deeper Caspian ties after meetings in Baku. World Bank & Jobs: Azerbaijan’s Labor Ministry met a World Bank mission to review the Azerbaijan Employment Support Project, aiming to scale self-employment support to 30,000 more beneficiaries with equipment for small family businesses. Climate Diplomacy: World Environment Day (June 5) in Baku under the theme “Inspired by Nature. For Climate. For Our Future” highlights nature-based climate action and the urgency of cooperation. Legal/Enforcement: An Azerbaijani citizen wanted via Interpol was extradited from the UAE over alleged disability-pension and employment fraud. Regional Geopolitics: Putin said Russia and Azerbaijan are negotiating specific areas, mainly energy, and thanked Aliyev for helping deliver humanitarian aid to Iran.

U.S.-Azerbaijan Energy Ties: Washington signaled it wants a direct stake in Azerbaijan’s pipeline and wider energy infrastructure, while pushing Baku’s role as a key Middle Corridor node. Central Banking Cooperation: Azerbaijan’s PM met OTS central bank leaders in Baku as the bloc discussed financial-sector reforms, transparency, and banking stability. Green Power Buildout: Azerenergy is relocating parts of the 330 kV Banka Solar–Navahi grid line and Banka substation to integrate new renewables, with the project put at about 7.3m manats. Transport & Trade Boost: The upgraded Baku–Tbilisi–Kars railway is now in full commercial operation, targeting 5m tons annual freight capacity and strengthening Asia-Europe transit. Fuel Flows to Armenia: Azerbaijan plans another diesel shipment to Armenia—42 wagons—via rail through Georgia. Energy Milestones: Shah Deniz marks 30 years since the PSA signing, underscoring its long-term role in supplying Azerbaijan, Georgia and Türkiye. Border & Security: Azerbaijan’s State Border Service detained 20 people for illegal border crossing in May and reported drug seizures. Autonomous Mobility Plans: Draft amendments would set rules for autonomous vehicles across road, rail, metro, tram, sea and air transport. Armenia Context (Trade Pressure): EU announced €50m support for Armenia after Russia’s new restrictions, while Russia warned it could reconsider financial support if Yerevan moves further toward the EU. TRIPP Update: The Armenia-U.S. TRIPP framework agreement and TRIPP Development Company were approved as part of a $2.5bn DFC investment package aimed at infrastructure and connectivity.

Energy & Infrastructure: Ukraine’s Energy Minister Denys Shmyhal met Azerbaijan’s Energy Minister Parviz Shahbazov to discuss expanding energy transport routes to EU markets via Ukrainian infrastructure, with Azerbaijan businesses ready to invest in Ukraine’s post-strike energy projects. Oil & Gas Deals: SOCAR signed a long-term gas supply agreement with TotalEnergies, ADNOC’s XRG and Turkey’s BOTAŞ to secure Absheron offshore gas exports to Turkey from 2029, reinforcing the Southern Gas Corridor. Energy Tech: bp deployed multilateral well technology in the Azeri-Chirag-Deepwater Gunashli (ACG) field to unlock additional reserves and extend long-term production. Regional Trade/Transit: Azerbaijan and the EU provisionally agreed on a 2026–2030 Partnership Priorities document, alongside talks on a new comprehensive agreement. Business & Finance: Central banks turned net buyers of gold in April (17 tonnes), led by Poland and China. Digital & Cybersecurity: Azercell is a platinum sponsor of Azerbaijan’s 4th National Cybersecurity Forum, highlighting AI-powered threat detection and monitoring for business customers. Social & Economy: Azerbaijan is shifting from a purely humanitarian IDP model toward reintegration and long-term economic participation, with analysts pointing to changing post-conflict socio-economic needs. Aviation Note: SAS’s first Copenhagen–Mumbai flight in 17 years was forced to return after missing final Indian regulatory approval, with the airline expecting the route to resume soon.

Energy & Trade Diplomacy: Azerbaijan and Germany discussed cooperation in natural gas, renewables, hydrogen and electricity infrastructure on the sidelines of Baku Energy Week. Middle Corridor Momentum: Experts at the 2nd Caspian Transport, Transit and Logistics Forum said TITR growth depends on coordinated action across all corridor participants, with road operators and project cargo still underrepresented. Non-oil Exports: Azerbaijan’s non-oil and gas exports rose 13% to $1.1bn in Jan–Apr 2026, led by a gold surge and gains in petrochemicals and satellite services. Banking & Finance: Birbank extended a campaign allowing loan transfers from other banks with discounts of up to 6% until June 30. Corporate/Industry: Azeraluminium export revenues climbed 27% to $63m in Jan–Apr 2026. Regional Business Links: Azerbaijan–Belarus trade grew 11% to $158m in the first four months, with focus on industrial cooperation and joint ventures. Digital Security: Azercell backed the 4th National Cybersecurity Forum, highlighting AI-powered threat detection for business customers. Transport Infrastructure: The upgraded Baku–Tbilisi–Kars railway entered full operation, reinforcing the Europe-Asia logistics corridor. Capital Markets: Azerbaijan is weighing IPO plans for state-owned companies, with PASHA Capital indicating readiness to participate if procedures move forward.

Transport & Trade: The upgraded Baku–Tbilisi–Kars (BTK) railway has entered full operation after Georgia’s modernization, boosting annual freight capacity to 5m tonnes and strengthening the Middle Corridor. Energy Diplomacy: Azerbaijan used Baku Energy Week to push deeper EU ties, with talks on gas supply, renewables, grid links and the Caspian–Black Sea–Europe Green Energy Corridor. US-Azerbaijan Business: The first Azerbaijan–U.S. Economic Dialogue in Baku focused on expanding trade, critical minerals, transport/logistics and AI for digital infrastructure and security. Regional Cooperation: Azerbaijan and Uzbekistan reviewed strategic alliance prospects across trade, transport, energy and investment; Belarus-Azerbaijan trade cooperation also got a boost via Minsk’s Azerbaijan Trade House. Cyber & Digital: Azercell backed the 4th National Cybersecurity Forum, highlighting AI-powered threat detection for business customers. Energy Markets Watch: Azerbaijan also discussed diversification with the World Bank, while GECF and IRENA meetings stressed energy security and financing for the transition.

BTC Pipeline Handover: BP says it will transfer management of the Baku–Tbilisi–Ceyhan (BTC) oil pipeline to SOCAR from July 1, calling it a contractual step and stressing BP is not exiting the project. BTK Railway Full Operation: Azerbaijan, Georgia and Türkiye officially launched the modernized Baku–Tbilisi–Kars (BTK) railway at full capacity; Georgia says capacity rises from 1m to 5m tons/year and container traffic nearly sixfold in 2025, boosting the Middle Corridor. Absheron Gas Deal: SOCAR and Turkey’s BOTAŞ signed an agreement to supply natural gas from the second phase of Absheron from 2029, with production expected to start Sept. 1, 2029 and annual output above 4 bcm. Energy Market Rules: Azerbaijan’s renewable energy regulator (AREA) urged harmonized electricity market rules across Central Asia and the South Caucasus to enable transparent cross-border power trade. Energy Security Outlook: GECF warned geopolitical disruptions are now a recurring “new norm” for global energy markets, pushing governments to rethink energy strategy and infrastructure planning. Azerbaijan–Ukraine Energy Talks: Azerbaijan and Ukraine discussed energy security cooperation and working groups under their intergovernmental commission. Transport & Trade Diplomacy: Azerbaijan–Uzbekistan ties were described as reaching an “unprecedented” high stage, with deeper Central Asia–South Caucasus connectivity. IMF Central Bank Independence: An IMF paper flagged central bank independence gaps across the Middle East and Central Asia, warning political pressure and fiscal demands can worsen inflation. Media & AI Training: AccessBank and Neurotime ran an AI-focused training for journalists on responsible use and verification. Regional Business Events: Baku Energy Week continued to anchor deals and policy discussions, while Georgia’s CASPIAN AGRO 2026 pavilion drew high-level attention.

Tourism Push: Azerbaijan Tourism Board opened its China office in Beijing (May 29), aiming to boost destination visibility and industry ties as Chinese arrivals keep rising (63,500 in 2025; 14,303 in Jan–Apr 2026). Energy Deals & Projects: During Baku Energy Week, SOCAR, TotalEnergies, ADNOC and BOTAS signed an Absheron phase-two gas sales agreement (first output expected in 2029; above 4 bcm/year, with about half for Turkey). Power Generation Cooperation: Serbia’s EPS and SOCAR agreed basic terms for a gas-fired power plant in Nis, targeting up to 500 MW by 2030. Regional Electricity Corridors: Turkey’s energy minister said an electricity interconnection linking Azerbaijan–Georgia–Türkiye–Bulgaria could later extend toward Central Asia, “creating the electricity version of TANAP.” Banking & Finance: IMF flagged Azerbaijan’s medium-term fiscal consolidation plan amid oil dependence and inflation risks, while Central Bank data showed business loans at 16.313bn manat ($9.6bn) as of May 1 (53.3% of total banking loan portfolio). US-Azerbaijan Business: Azerbaijan and the US signed contracts worth $7.5bn at Baku Energy Week under the 1st Azerbaijan–US Economic Dialogue. Digital Finance: VTB plans an online bank for children aged 6–14, with transfers, QR payments and a finance chatbot.

Energy Diplomacy at Baku Energy Week: President Ilham Aliyev used Baku Energy Week to stress Azerbaijan’s “positive” economic momentum and its growing role in global energy security and the green transition, while the EU’s connectivity push singled out Azerbaijan as a key partner for electrification, renewables, interconnectors and gas supply diversification. US-Azerbaijan Economic Talks: Ilham Aliyev met U.S. Assistant Secretary Caleb Orr, pointing to the upcoming first Azerbaijan–US Economic Dialogue and highlighting signed documents from the forum. Gas Deal Boost for Türkiye: BOTAS, SOCAR, TotalEnergies and ADNOC signed a 15-year agreement for 33 bcm of Absheron gas to Türkiye starting in 2029, with new investments underpinning the volumes. Power Projects Across the Region: Serbia’s EPS and SOCAR agreed cooperation terms for a gas-fired power plant in Nis (up to 500 MW by 2030). Electricity Corridor Plans: Türkiye floated an “electricity version of TANAP” to move renewable power from Azerbaijan toward Europe, while the Central Asia–Azerbaijan energy corridor feasibility study is due to finish in May 2027. Regional Grid Integration Economics: The World Bank said a common regional electricity market could bring up to $30bn in benefits by 2050, and the EBRD reported financing 1.2 GW of renewables in Azerbaijan. Finance Sector Move: Azerbaijan’s central bank is preparing an expanded insurance guarantee scheme for voluntary products by end-2026.

Azerbaijan-US Economic Dialogue: Baku Energy Week will host the first U.S.-Azerbaijan Economic Dialogue on June 2, with talks on regional connectivity, trade, industry, transit, energy security, investment, AI and digital infrastructure, plus a business session expected to produce cooperation documents and commercial deals. Customs Digital Upgrade: From June 1, “Smart Customs” e-commerce declarations will require electronic ID via SİMA digital signature (mobile, facial recognition), with users advised to get SİMA İmza in advance. Oil & Gas Cooperation: Algeria’s President Tebboune ratified an MoU with Azerbaijan on oil and gas cooperation, covering upstream, petrochemicals, LNG and green-energy (including hydrogen), with SOCAR supplying long-term crude volumes. Digital Education Push: Azerbaijan’s Ministry of Science and Education and OpenAI launched an AI-based adaptive learning platform for the “Digital School” project, targeting 500,000+ students with personalized assignments and teacher dashboards. Karabakh Jobs & Investment: The State Employment Agency held outreach in liberated districts (Khojavand, Zangilan, Jabrayil, Lachin) to assess employment prospects and link residents to training and job placement; separately, the Karabakh Revival Fund convened investors on business opportunities in Jabrayil, Gubadli and Zangilan. Talent Development: AzerGold’s “Yüksəliş” mentorship program met winners to map development plans and strengthen leadership skills.

Azerbaijan–US Economic Dialogue: The first Azerbaijan-US Economic Dialogue will be held June 2 in Baku under the strategic partnership charter, with talks on regional connectivity, trade, industry, investments, energy security, transit, and AI/digital infrastructure, plus a business session expected to produce documents and contracts. Karabakh Reconstruction & Investment: The Karabakh Revival Fund launched a business meeting in Jabrayil, Gubadli and Zangilan to showcase investment potential and business opportunities, highlighting reconstruction progress and inviting domestic investors and partners. Digital Education Push: Azerbaijan’s Ministry of Science and Education and OpenAI are launching an AI-based adaptive learning platform for over 500,000 students within the “Digital School” project, including personalized assignments and real-time performance indicators. Social Inclusion: The State Employment Agency says it has provided suitable jobs to 1,500 people with disabilities this year, alongside vocational training for 131 participants. Tourism Youth Leadership: “Young Tourism Leaders-3” ran in Guba with support from the Ministry of Youth and Sports and partners, aiming to build youth leadership for Azerbaijan’s tourism sector. Energy & Logistics Context: Kazakhstan is reportedly exploring additional oil export routes and discussing the Baku–Supsa pipeline as part of broader corridor diversification. Oman–Azerbaijan Trade & Logistics: Azerbaijan’s embassy in Muscat says ties are expanding in trade, transport and logistics, supported by the Oman embassy opening and a visa exemption deal for diplomatic/service passport holders.

Banking & Finance: Azerbaijan’s banks’ deposit portfolio edged down to 41.3 billion manat as of May 1, while credit investments rose to 32.6 billion manat, signaling continued lending growth. Energy & Diplomacy: Dutch special envoys will visit Azerbaijan for Baku Energy Week (June 1–5), with talks on connectivity, energy, logistics along the Middle Corridor, and meetings with financial institutions. Trade & Regional Links: The U.S. says it’s “delighted” to have signed a Strategic Partnership Charter with Azerbaijan, pointing to an upcoming inaugural Economic Dialogue with business-focused initiatives. Geopolitics with Business Impact: Russia recalled its ambassador to Armenia for consultations over Yerevan’s EU ties, while Moscow also imposed temporary restrictions on Armenian fruit and vegetable imports—moves that can quickly spill into regional supply chains. Corporate Spotlight: Anglo Asian Mining says 2025 was a turning point, expanding into a multi-asset copper and gold producer with new output from Azerbaijan projects. International Markets: China is tightening rules on EV battery recycling as retired batteries are expected to exceed 1 million tons annually by 2030.

Armenia–EU Pressure: Putin and allied leaders urged Armenia to hold an EU membership referendum “as soon as possible,” warning it could face economic risks inside the Eurasian Economic Union. Energy Transit Watch: Kazakhstan said there’s “no alternative” to the CPC pipeline for most oil exports, but is open to considering extra routes like Baku–Supsa if they make economic sense. Azerbaijan–Connectivity Deal: Armenia and the US published the TRIPP framework, setting up a joint venture where a US-linked entity holds a 74% stake to develop multimodal transit infrastructure. Azerbaijan–Tourism Push: The Azerbaijan Tourism Board opened a Beijing office and highlighted rising Chinese arrivals (+9.5% in Jan–Apr 2026). Azerbaijan–Telecom Integration: Azcon is merging AzinTelecom, Aztelekom and Azerpost into one ecosystem and plans to start Azerspace-3 operations by end-2029. Business & Real Estate: Brabus unveiled “Brabus Island Baku,” a luxury residential complex near Baku with 592 apartments and 16 villas. Regional Trade & Sanctions: Russia tightened restrictions on Armenian produce and other imports, while also threatening gas supply terms tied to Yerevan’s EU alignment. Labour Market Angle (UK): The UK plans to expand youth internships and training to prevent a “lost generation,” adding up to 300,000 opportunities.

Energy Deal: BP is set to take over operations of Azerbaijan’s offshore Babek gas field, with SOCAR and BP expected to announce the agreement on June 1; the field is estimated at ~400 bcm of gas and 80 mln tonnes of condensate. Telecom Integration: Azcon is merging AzinTelecom, Aztelekom and Azerpost into one ecosystem, while Azerbaijan plans to start exploiting Azerspace-3 by end-2029. Luxury Real Estate: Brabus unveiled “Brabus Island Baku,” a planned Caspian-coast premium residential complex near Baku with 592 apartments and 16 villas (prices not yet disclosed). Trade & Supply Routes: Iran’s president ordered faster imports of food and medicines via alternative corridors, urging use of northern ports and cooperation with Pakistan, Russia and Azerbaijan. Civil Society & Compliance: Azerbaijani NGOs appealed to governments of 48 countries to investigate Lafarge (Holcim) over alleged cement operations linked to terrorism financing. Business Diplomacy: The Azerbaijan–Netherlands Chamber of Commerce was officially established in The Hague to boost bilateral trade, investment and knowledge exchange. Oil Market: Azeri Light slid to about $100.57/bbl amid a broader global oil selloff.

Textile & Jobs: Ilham Aliyev inaugurated “Garabagh Textile House” LLC in Khojaly, a plant using Turkish and Chinese tech to produce 1.4m textile items a year, with 85 permanent jobs now and plans to reach 200 as garment production expands. Reconstruction in Shusha: Aliyev also inspected restoration in Boyuk Galaderesi village, including power, gas, drinking water, communications and road works for returning residents. Energy Markets: Azeri Light oil price slipped 3.9% to about $102.3/bbl as global prices eased. SOCAR Expansion: SOCAR President Rovshan Najaf met Italy’s energy and enterprise ministers in Rome, highlighted SOCAR’s Italy growth after acquiring shares in Italiana Petroli, and presented SOCAR Italia. Trade Diplomacy: Azerbaijan’s ambassador to Malaysia said Baku wants stronger economic, trade and investment ties, with Economy Minister Mikayil Jabbarov expected to lead a delegation soon. Regional Pressure on Trade: Russia moved to restrict Armenian fruit and vegetable imports from May 30, citing alleged quality and safety violations—another sign of worsening Moscow–Yerevan frictions. Azerbaijan–Georgia Connectivity: New Georgia–Azerbaijan deals include long-term electricity and gas frameworks plus restored daily rail service, while texts remain undisclosed amid energy-security concerns. Finance/Compliance: The US Treasury extended by one month a license tied to Lukoil foreign-asset transactions, affecting assets linked to Azerbaijan among other countries.

Azerbaijan–Italy Energy Ties: SOCAR chief Rovshan Najaf met Italy’s energy and industry ministers in Rome and highlighted SOCAR’s share acquisition in Italiana Petroli as a step to deepen cooperation and energy security. Industrial Push in Liberated Areas: Ilham Aliyev inaugurated the “Garabagh Textile House” in Khojaly (1.4m textile items/year, Turkish/Chinese tech) and also backed a Khankendi work-gloves plant (25m pairs/year), both tied to jobs and export plans. Gold & Markets: Gold slipped $64 to $4,417/oz and silver also fell, while Azeri light reportedly slid nearly 4% amid global oil selling. Regional Trade & Transit: Container traffic on the Middle Corridor is targeted to reach 10m tons by 2030, with Azerbaijan in the route. Azerbaijan Business Abroad: Azerbaijan eyes stronger economic and education cooperation with Malaysia, with a planned Economy Minister delegation visit. Energy Finance Outlook: IMF expects Azerbaijan’s economy to grow 2.2% in 2026, with steadier growth later. Local Regulation/Health Sector: GM PHARMA hosted a GMP inspection by Azerbaijan’s regulator ahead of export expansion.

TRIPP & Regional Connectivity: Armenia’s PM Nikol Pashinyan says the TRIPP corridor will reopen the Meghri railway and add new transport links, with the U.S.-Armenia TRIPP framework expected to be finalized within a month after Marco Rubio and Ararat Mirzoyan initialed the deal in Yerevan. Energy & Geopolitics: Russia warns it could suspend discounted gas, oil products and rough-diamond supplies to Armenia if Yerevan keeps moving toward the EU, raising fresh uncertainty ahead of June 7 parliamentary elections. Azerbaijan Economy—Mining: Azerbaijan’s mining industry production hit 12.5 billion manats in Jan–Apr, including 8.8m tons of marketable crude oil and 13bn cubic meters of marketable gas. Trade & Transport Impact: Galt&Taggart estimates the restored Baku–Georgia rail channel could add about $200m to Georgia’s tourism revenues in the second half of the year. Customs Enforcement: Azerbaijan customs seized 110.3 kg of marijuana hidden in “watermelon” cargo from Iran en route to Georgia. Business & Finance: Azerbaijan’s budget oil revenue share is set at 42.6% this year, with a push to raise non-oil revenues to fund priorities like rebuilding liberated territories and social protection. Azerbaijan–China Diplomacy: Foreign Minister Jeyhun Bayramov met China’s Wang Yi in New York to discuss expanding cooperation across trade, transport, energy, green development and digital transformation.