Under the waves of the Caspian Sea, there is abundant oil and gas, while above the sea breeze, infinite green energy is nurtured. China National Offshore Oil Corporation (CNOOC) and Azerbaijan State Oil Corporation (SOCAR) have signed a strategic memorandum, binding the dual main lines of oil and gas and new energy in the entire chain for the first time. Chinese capital has thus deeply penetrated into the core energy circle of the Caspian Sea, and traditional oil and gas giants are accelerating their transformation into comprehensive energy service providers.

Sign a memorandum of cooperation

On September 3, 2026, CNOOC and Azerbaijan State Oil Company SOCAR signed a memorandum of understanding on strategic cooperation. The cooperation covers oil and gas exploration and development, engineering operation and maintenance, while expanding offshore wind power and energy storage businesses in the Caspian Sea. This is the first time that Chinese enterprises have achieved full chain cooperation in oil and gas and new energy in Azerbaijan, further entering the core market of Caspian Sea energy. Traditional oil and gas giants are accelerating their transformation into comprehensive energy service providers.

This cooperation bid farewell to the previous single point project model and shifted towards full industry chain collaboration, including oil and gas joint investment, equipment supply, engineering construction, and full cycle operation and maintenance, incorporating offshore wind power and energy storage in the Caspian Sea into the long-term framework. The Azerbaijani Ministry of Energy has included potential projects in the country's long-term cooperation plan to promote the synchronous development of fossil energy and new energy.

Background and strength of cooperation

Azerbaijan is located on the west coast of the Caspian Sea and is not only an important oil and gas exporting country, but also has abundant offshore wind energy reserves. The country is promoting energy transformation, on the one hand stabilizing the oil and gas industry to ensure finance and exports, and on the other hand vigorously developing offshore wind power in the Caspian Sea. The output of offshore wind power fluctuates greatly, requiring energy storage to support stable supply. However, the local energy storage industry is still in its infancy, lacking experience in large-scale project construction and operation, and urgently needs external capital and technology.

In the past, Chinese investment in local energy projects mostly remained at the level of engineering subcontracting and equipment supply. This framework agreement has been upgraded to joint investment, with deep participation in upstream oil and gas and new energy development. As a leading domestic oil and gas company, CNOOC has vigorously deployed energy storage and offshore wind power in recent years, with the ability to invest, construct and operate large-scale projects. It can reuse its offshore engineering experience to the Caspian Sea photovoltaic storage project.

Opportunities and Industry Insights

This is only a framework memorandum of understanding, and the specific project, investment amount, and timeline have not yet been determined. The formal contract will only be implemented after project screening, business negotiations, and due diligence. The geographical conditions of the Caspian Sea are complex, and the cycle of cross-border energy projects is long, with uncertainty still present from framework to production. This project has significant industry reference value. Many traditional oil and gas resource countries choose to preserve oil and gas and develop new energy sources, with both new and old energy sources running parallel. In the past, photovoltaic energy storage enterprises were the main players in energy storage going global. Now, oil and gas central enterprises are leveraging overseas resources to layout wind power energy storage and embark on a new path of energy storage going global. Keywords: Caspian Sea, Azerbaijan, the Belt and Road News

For the energy storage industry, project development entities are becoming increasingly diverse, and in the future, offshore supporting energy storage will be more dominated by oil and gas comprehensive energy enterprises. The competition among Chinese enterprises going global is no longer just about competing on hardware prices, but also increasingly crucial in large-scale project investment, engineering implementation, and cross energy integration capabilities. With the promotion of green cooperation in the joint construction of the the Belt and Road, such packaged cooperation models will continue to increase in the future.Editor/Gong Ziwei