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SOCAR and Gran Tierra Energy Inc. signed a Production Sharing Agreement for the exploration, development, and production of a promising onshore field located in the Guba-Caspian region of the Republic of Azerbaijan.
The document was signed by SOCAR President Rovshan Najaf and Gran Tierra Energy Inc. President and CEO Gary Guidry, Oku.Az reports. 
Azerbaijan is a highly developed oil and gas region with major discoveries and world-class export-ready infrastructure, backed by over a century of oil and gas production history, including some of the world’s earliest and most productive commercial oil extraction projects. This aligns well with our strategy of reducing risks and increasing capital efficiency in regions with proven growth potential. Crucially, Azerbaijan plays a vital role in Europe's energy security by supplying oil and gas to key European markets, and we are pleased with the opportunity to participate in this value chain over the long term," said Gary Guidry. 
The PSA provides significant access rights in a proven region, ensuring access to developed infrastructure and covering an adjacent basin trend supported by common geology, well data, and seismic data, which opens clear prospects for exploration, appraisal, and field development.
Azerbaijan is a world-class oil and gas producing region, centered around some of the world's largest conventional oil and gas fields. The contract area covers a structure approximately 65 kilometers in length, which has already produced over 100 million barrels of oil and more than 200 billion cubic feet of natural gas, highlighting the scale and quality of Azerbaijan's petroleum system.
This will allow Gran Tierra to leverage its proven expertise in exploration, appraisal, development, and optimization, combining the company’s core technical and operational capabilities with strategic access to European markets.
Gran Tierra has secured a 65% working interest (WI) and operatorship in the contract area, which encompasses approximately 0.4 million acres — more than double the company’s current acreage in Ecuador.
Under the PSA, Gran Tierra is granted five years for exploration and appraisal, along with 25 years for the development of any economically viable fields, with an option to extend the development period for an additional five years. The exploration period consists of an initial three-year phase, followed by a second two-year phase. The initial phase includes conducting gravimetric surveys, as well as an obligation to drill two wells and acquire 3D seismic data over an area of 250 km2. The second phase provides for the drilling of two additional wells and the acquisition of 3D seismic data over an additional 250 km2. Upon completion of the initial phase, the Company has the right to proceed to the second phase.
Gran Tierra plans to begin the aerogravimetric survey in 2026, with seismic work and drilling scheduled for 2027. These activities are expected to be funded by the company's projected net cash flow from operating activities.
The agreement will enter into force following ratification by the Milli Majlis of the Republic of Azerbaijan.