ONGC Videsh Limited (OVL) today signed definitive agreements for the acquisition of Hess Corporation’s 2.7213% participating interest in the Azeri, Chirag and the Deep Water Portion of Guneshli Fields in the Azerbaijan sector of the Caspian Sea (“ACG”) and 2.36% interest in the Baku-Tbilisi-Ceyhan Pipeline (“BTC”), for US$ 1 Billion. The acquisition is subject to relevant government and regulatory approvals and is expected to close by the first quarter of 2013.
ACG, which is located in the south Caspian Sea about 95 km off the coast of Azerbaijan, is the largest oil and gas field complex in Azerbaijan and is one of the largest producing oil fields in the world. BP operates ACG and is partnered by State Oil Company of Azerbaijan Republic (SOCAR), Chevron, Statoil, ExxonMobil, Inpex, Turkish NOC - TPAO and Itochu. Average daily production from the field is around 700,000 bopd of crude oil.
The 1,768-km BTC Pipeline is one of the main export routes for Caspian crude oil production with a capacity of around 1.0 million bopd to the Ceyhan terminal in the Mediterranean Sea in south east Turkey.
The acquisition would mark ONGC Videsh’s entry into oil rich Azerbaijan and is consistent with its stated strategic objective of adding high quality international assets to its existing E&P portfolio. The acquisition would bring 9% additional proved reserves to ONGC Videsh Limited portfolio and also bears significant strategic importance to India in terms of contributing towards India’s energy security. ONGC has recently formulated its Perspective Plan – 2030 envisaging that the oil and gas production of ONGC Videsh Limited would increase from the current level of 8.75 MMTOE to 20 MMTOE by FY’18 and 60 MMTOE by FY’30. Mr. Sudhir Vasudeva, CMD, ONGC said that the current transaction is the first step towards achieving this goal. The production from this asset during 2011-12 was about 15% of ONGC Videsh Limited crude oil production during the same period.
About ONGC Videsh
ONGC Videsh is a wholly owned subsidiary of Oil and Natural Gas Corporation Limited, the national oil company of India. It is India’s largest oil and gas exploration and production company outside India. At present, ONGC Videsh has activities in 15 countries including Brazil, Colombia, Cuba, Iraq, Kazakhstan, Libya, Myanmar, Nigeria, Russia, South Sudan, Sudan, Syria, Venezuela and Vietnam. For the year ended 31st March 2012, ONGC Videsh produced 8.75 MMTOE of oil and gas
Oil and Natural Gas Corporation Ltd.
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