ONGC Expands Global Reach with New Stake in Azerbaijan’s ACG Oil Field

30 Nov 2024 , 07:33 PM

ONGC’s wholly-owned subsidiary ONGC Videsh Ltd, has purchased a participating interest of 0.615% in the Azerbaijan located Azeri-Chirag-Gunashli oil field. The deal includes ONGC Videsh acquiring 0.737% equity in the pipeline company Baku-Tbilisi-Ceyhan through its wholly owned subsidiary ONGC BTC Ltd.

The deal worth $60 million was sealed on 29 November 2024 and is a strategic one for ONGC Videsh to further build upon its presence in the country’s energy sector of Azerbaijan.

The ACG field is a super-giant offshore asset and one of the largest contributors to oil production in Azerbaijan. Located on the Caspian Sea floor, it has been operated by BP since 1999. It is developed in phases, with the newest production platform, Azeri Central East, commissioned at the start of 2024.

BTC pipeline is an important export route connecting the Sangachal terminal in Azerbaijan to the Ceyhan marine terminal in Turkey for Caspian oil and condensate. The other participants of the ACG field are SOCAR, MOL, INPEX, Exxon, Turkiye Petrolleri AO, and Itochu.

A contract for the operations of ACG runs up to 31 December 2049, thus giving a steady stream of production and export. ONGC Videsh already holds a 2.31% equity in the ACG field and a 2.36% interest in the BTC pipeline, which gives this acquisition an edge. BTC pipeline is crucial for extracting oil and condensate out of ACG and Shah Deniz across Azerbaijan, Georgia, and Türkiye.

During FY24, ONGC Videsh produced 10.518 MMtoe of O+OEG, working at an average rate of around 200,000 barrels per day. As of April 2024, ONGC Videsh had 476 MMtoe of oil and gas 2P reserves, whereas total 2P reserves in ONGC were 704 MMtoe. This acquisition matches the strategic focus of ONGC on expansion of its global energy portfolio with reliable energy supplies.