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OVL currently has a 2.31 per cent stake in the ACG field and 2.36 per cent in the BTC pipeline. The buyout of Equinor will help raise its stake.
ONGC Videsh Ltd, the overseas investment arm of state-owned Oil and Natural Gas Corporation (ONGC), has acquired Norwegian firm Equinor’s stake in an Azerbaijan oilfield and an associated pipeline for $60 million, the firm said in a statement.
OVL “has signed a definitive sale purchase agreement (SPA) for directly acquiring 0.615 per cent participating interest (PI) in offshore Azeri Chirag Gunashli (ACG) oil field in Azerbaijan from Equinor. The agreement also includes acquiring 0.737 per cent shares of the Baku Tbilisi Ceyhan (BTC) pipeline company through its wholly-owned subsidiary ONGC BTC Limited,” it added.
The acquisitions, expected to be completed in the upcoming months, involve a total investment of up to $60 million.
OVL currently has a 2.31 per cent stake in the ACG field and 2.36 per cent in the BTC pipeline. The buyout of Equinor will help raise its stake.
Equinor, in December last year, announced an agreement to sell all its remaining assets in Azerbaijan to SOCAR (State Oil Company of Azerbaijan Republic).
The assets comprised a 7.27 per cent non-operated interest in the Azeri Chirag Gunashli oil fields in the Azerbaijan sector of the Caspian Sea, 8.71 per cent interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline and 50 per cent in the Karabakh field.
SOCAR already held a 25.0 per cent stake in ACG, a 25.0 per cent stake in BTC via Azerbaijan BTC Limited, and 50 per cent in Karabakh.
It is not clear how Eqinor, which had agreed to sell all of its stake to SOCAR, ended up selling a 0.615 per cent stake in the oilfield and a 0.737 per cent stake in the pipeline. The statement made no mention of this.
Originally, OVL acquired a 2.72 per cent stake in ACG in March 2013.
ACG contract extension till 2049 was signed between field partners and SOCAR in September 2017. As per the restated and amended production sharing agreement (PSA) for the extension period, the stakes of international oil companies were reduced with OVL’s interest becoming 2.31 per cent from 2.72 per cent.
BP is the operator of the field with a 30.37 per cent stake. The remaining stake in the field is divided between Japanese firms and ExxonMobil.
“ACG is a super-giant offshore oil field in the Caspian Sea operated by oil major BP since 1999. The field has been developed in phases, and a seventh production platform, Azeri Central East, has been commissioned in early 2024,” the statement said.
Baku-Tbilisi Ceyhan (BTC) pipeline carries oil from the Azeri-Chirag-Deepwater Gunashli (ACG) field and condensate from Shah Deniz across Azerbaijan, Georgia and Turkiye. It links the Sangachal terminal on the shores of the Caspian Sea to the Ceyhan marine terminal on the Turkish Mediterranean coast.
OVL holds a stake in 32 oil and gas projects in 15 countries, ranging from Vietnam to Venezuela. It currently produces some 2,00,000 barrels of oil and oil equivalent natural gas per day from these assets.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First Published: Jul 20 2024 | 3:02 PM IST
