ONGC Videsh Secures Equinor's Stake in Azerbaijan Oilfield for $60 million

ONGC Videsh (OVL), the overseas investment arm of Oil and Natural Gas Corporation (ONGC), has successfully acquired stakes in the Azeri Chirag Gunashli (ACG) oilfield and the Baku-Tbilisi-Ceyhan (BTC) pipeline from Norwegian energy firm Equinor for $60 million. The transaction was finalized on November 29 through OVL’s wholly owned subsidiary, ONGC BTC Limited, after a sale-purchase agreement (SPA) was signed in July 2023. The acquisition includes a 0.615% participating interest in the offshore ACG oilfield and a 0.737% share in the BTC pipeline, further strengthening OVL’s strategic position in these significant energy assets.

The ACG oilfield, one of the largest offshore oilfields in the Caspian Sea, is operated by BP, which holds a 30.37% stake. Other international partners, including ExxonMobil and Japanese firms, also have stakes in this critical asset. OVL has been involved with the ACG field since March 2013, when it initially acquired a 2.72% stake. However, following a production-sharing agreement amendment in 2017, its interest was adjusted to 2.31%. With this latest transaction, OVL’s ownership in the ACG field has grown, enhancing its long-term strategic presence in Azerbaijan.

The BTC pipeline, a vital piece of infrastructure, stretches over 1,768 kilometers, linking Azerbaijan, Georgia, and Turkey. It transports oil from the Caspian Sea to the Turkish Mediterranean coast, serving as a crucial route for global energy exports. The newly acquired 0.737% stake in the BTC pipeline adds to OVL’s existing 2.36% interest, bolstering its influence over this critical supply chain.

Equinor, which sold the stakes to OVL, had previously agreed to divest all its remaining assets in Azerbaijan to SOCAR (State Oil Company of Azerbaijan Republic) in December 2023. These assets included a 7.27% non-operated interest in the ACG field and an 8.71% stake in the BTC pipeline. However, a portion of Equinor's stake was sold to OVL, raising questions about the reasons behind this deviation from the original agreement with SOCAR.

OVL’s acquisition aligns with its strategy of expanding its global portfolio and strengthening its presence in key energy markets. The company currently holds interests in 32 oil and gas projects across 15 countries, with international operations producing around 200,000 barrels of oil and natural gas equivalent per day. This acquisition not only consolidates OVL’s position in Azerbaijan but also underscores its commitment to contributing to global energy security.

By reinforcing its stake in both the ACG field and BTC pipeline, OVL demonstrates its ability to adapt and grow amidst a dynamic energy landscape, further establishing itself as a key player in international oil and gas exploration and production.