ONGC Acquires Equinor's Stake In Azerbaijan Oilfields For $60 Million

The overseas investment arm of state-owned Oil and Natural Gas Corp., ONGC Videsh Ltd., has acquired Norwegian firm Equinor's stake in an Azerbaijan oilfield and an associated pipeline for $60 million.

OVL has signed a definitive sale purchase agreement for directly acquiring 0.615% participating interest in offshore Azeri Chirag Gunashli oil field in Azerbaijan from Equinor, the firm said in a statement.

The agreement also includes acquiring 0.737% shares of the Baku Tbilisi Ceyhan pipeline company through its wholly-owned subsidiary ONGC BTC Ltd., 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% stake in the ACG field and 2.36% 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% non-operated interest in the Azeri Chirag Gunashli oil fields in the Azerbaijan sector of the Caspian Sea, 8.71% interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline and 50% in the Karabakh field.

SOCAR already held a 25.0% stake in ACG, a 25.0% stake in BTC via Azerbaijan BTC Ltd., and 50% 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% stake in the oilfield and a 0.737% stake in the pipeline. The statement made no mention of this.

Originally, OVL acquired a 2.72% 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% from 2.72%.

BP is the operator of the field with a 30.37% 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 pipeline carries oil from the Azeri-Chirag-Deepwater Gunashli 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.