State-owned Oil and Natural Gas Corp’s overseas arm, ONGC Videsh (OVL), is expected to finalise the acquisition of a 0.615% participating interest in Azerbaijan’s offshore Azeri Chirag Gunashli (ACG) oil field from Equinor within the next two months, the company officials said.
Earlier, OVL signed a definitive sale and purchase agreement to increase its stake in the ACG oil field. This deal also includes the acquisition of a 0.73% share in the Baku-Tbilisi-Ceyhan (BTC) pipeline company through its wholly owned subsidiary, ONGC BTC.
OVL anticipates that this increased stake in the ACG oil field will enhance its overseas crude oil production. “We are increasing our stake in the ACG field in Azerbaijan by a smaller amount. The outgoing capex is not much, but it will add to our production,” OVL managing director Rajarshi Gupta told FE. “It is under assessment, and in another two months, we should hear something,” he added.
The total investment for these acquisitions is estimated to be around $60 million. This is in addition to the company’s existing 2.31% participating interest in the ACG field and 2.36% shareholding in the BTC pipeline.
“Since it is a producing field, we will not need to spend new capex. We are increasing our stake because Equinor is exiting, giving us the right to do so. There are also some other projects we should hear about in the next two or three months,” Gupta said. The company typically spends around $500-700 million each year on this project.
The ACG field, one of the largest oil-producing fields globally, is located in the Caspian Sea, about 95 km off the coast of Azerbaijan. The field has been operated by oil major BP since 1999. The latest phase of development, Azeri Central East, was commissioned in early 2024.
Other partners in the field include the State Oil Company of Azerbaijan Republic (SOCAR), Inpex, ExxonMobil, Turkiye’s national oil company Turkiye Petrolleri Anonim Ortaklığı (TPAO), MOL, and Japan’s Itochu.
The ACG field has a contract term extending until December 31, 2049. The BTC pipeline transports oil from the ACG field and condensate from the Shah Deniz gas field across Azerbaijan, Georgia, and Turkiye.
In April, BP and its partners commissioned new production at Azerbaijan’s ACG oil field complex. BP announced that production from the $6 billion Azeri Central East project is expected to reach 24,000 barrels per day by the end of 2024, as additional wells are brought online.
OVL is involved in the overseas exploration and production of crude oil and natural gas, managing 32 assets in 15 countries.
From: financialexpress
Financial News
