OVL buys stake in Azeri fields for $1 bn

In its first acquisition in Azerbaijan, ONGC Videsh Ltd today bought US energy firm Hess Corp's stake in Azeri, Chirag and Guneshli (AGC) group of oil fields in the Central Asian nation for USD 1 billion.

OVL "signed definitive agreements for the acquisition of Hess Corp's 2.7213 per cent participating interest in the Azeri, Chirag and the deepwater portion of Guneshli fields in the Azerbaijan sector of the Caspian Sea and 2.36 per cent interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline for USD 1 billion," the company said in a statement here.

The acquisition is subject to relevant government and regulatory approvals and is expected to close by the first quarter of 2013.

The buyout marks OVL's entry into oil rich Azerbaijan.

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 one of the largest producing oil fields in the world.

UK's BP Plc operated field produces around 700,000 barrels a day (35 million tons per annum) of crude oil. This is more than India's annual oil production.

OVL's share of output would be over 19,000 bpd or a little less than one million tonnes per annum.

"The acquisition would bring 9 per cent additional proved reserves to OVL (the overseas arm of state-owned Oil and Natural Gas Corp, or ONGC) portfolio," the statement said.

While the AGC field has total reserves of over 6.5 billion barrels, the 1,768-km BTC pipeline is one of the main export routes for Caspian crude oil production to the Ceyhan terminal in the Mediterranean Sea in south east Turkey, with a capacity of around 1.0 million bpd.

UK's BP plc is the operator of the ACG fields with 34.1 per cent stake.

Other partners include Chevron (10.2 per cent), State Oil Company of Azerbaijan Republic (SOCAR 10 per cent), Inpex (10 per cent), Norway's Statoil (8.6 per cent), ExxonMobil (8 per cent), Turkish national oil company TPAO (6.8 per cent), Chevron (5.6 per cent) and Japanese Itochu (3.9 per cent).

... contd.

ALSO READ

GST panel says no to placing mobiles in declared goods list

Indian card processor in $45 mn heist is ElectraCard

Weekly review: Rupee plunges to one-month low against US dollar

Weekly review: Market flies high on smart rally, Sensex, Nifty at 28-mth peak