Source: BP Website After a 21-year cease-fire between Armenia and Azerbaijan, which lay next to Russia, Iran, and Georgia, there are signs that peace is beginning to crumble. The source of the conflict lays with Nagorno-Karabakh region [the small stretch of land that isn't connected by land to Azerbaijan, with the majority of the population there being ethnically Armenian], which is internationally recognized as part of Azerbaijan but is effectively controlled by the Nagorno-Karabakh Republic [backed by Armenia] after the Kagorno-Karabakh War. The Kagorno-Karabakh War officially started in the late 1980's and lasted until May 1994 when a Russian-brokered ceasefire attempted to calm the region down. Plenty of other foreign powers got involved in the conflict as well. Recently, there has been an increase of violence and fighting in the region according to Bloomberg, with 31 confirmed deaths so far this year. There are several reasons why this region is important, and part of it has to do with Azerbaijan's massive natural gas, condensate, and oil reserves. The Shah Deniz 2 expansion, which is being developed by a consortium of players including BP [the operator], SOCAR, Statoil, Lukoil, NICO, and TPAO. SOCAR is run by the Azerbaijani government, NICO is run by the Iranian government, and TPAO is a subsidiary of the Turkish Petroleum Corporation. The Shah Deniz 2 expansion would grow production from the Shah Deniz Field by ~1.5 Bcf/d of natural gas, with most of it being exported to Azerbaijan's neighbors [including Turkey] and Europe. This expansion would also boost the field's condensate production capacity to 120,000 bpd, roughly double its current condensate output. While the violence is occurring in a different part of the region and the South Caucasus Pipeline Expansion circumvents the volatile area for the most part, this is still something investors should watch out for. The Shah Deniz 2 is expected to start-up by late-2018, and will be subsequently ramped up to peak capacity. Hopefully some sort of peace agreement or cease-fire will be worked out to avoid a spread in violence that could end up in another tragic, bloody conflict, but that remains to be seen.