Wednesday, 06 November 2019 12:45

Chevron leaves largest project in the Caspian

International oil-gas company MOL signed an agreement with Chevron Global Ventures, Ltd and Chevron BTC Pipeline, Ltd to acquire a 9.57% stake in the Azeri-Chirag-Gunashli (“ACG”) oil field, and a 8.9% stake in the Baku-Tbilisi-Ceyhan (“BTC”) pipeline. Total sum of the deal made $1.57 billion.

Once completed, the transaction will make MOL the third largest field partner in ACG. Azerbaijan is becoming the 14th country in MOL’s portfolio, the official website of the Hungarian company says.

Completion of the deal will be subject to the Azerbaijani government and regulatory approvals and is expected to close by the second quarter of 2020. ACG field is a leading oil-producing asset of Azerbaijan, the company’s release says. According to forecasts, the asset will increase MOL’s production by 20,000 barrels per day in coming years, as well as continue to generate robust cash flow, EBITDA and rising dividends. The deal fits into the current portfolio of MOL, meets the company’s 2030 strategy, as well as strengthens its presence in CIS.

Late in September it became known that MOL became the first European company which fully agreed the compensation sum for low-grade oil supplied from RF in spring. The Company can get a compensation worth up to $110 million from its supplier, depending on the size of the supplied crude, which stays undisclosed.

 

ACG field is a leading oil-producing asset of Azerbaijan, covering an area of 400 km2 where there are 6 offshore production platforms operating. Oil production has been commenced here since 1997. The giant oil field of the country is being operated by the oil giant BP. Average production here totaled 584,000 barrels per day in 2018. In this strategic asset MOL Group will unite with such world level partners as BP, Exxon, Equinor and SOCAR. MOL also gets a stake in the Baku-Tbilisi-Ceyhan (BTC) pipeline transporting Azerbaijani crude to the Mediterranean port of Ceyhan (Turkey).
It is noteworthy that early in September the American company Hess agreed to sell its 2.72% stake in the Azeri-Chirag-Gunashli (ACG) oil field development project, as well as a 2.36% stake in BTC pipeline, to the Indian ONGC. The sum of the deal was estimated at $1 billion.
Meanwhile, the Russian oil-gas giant LUKOIL became a participant of the Azeri-Chirag-Gunashli PSA in 1994. LUKOIL paid $400 million for a 10% stake in the project. In 2002, the stake in the Azeri-Chirag-Gunashli project was sold to the Japanese company Itochu Oil Exploration Co. for $1.25 billion.

The Company owns Duna oil refinery in Hungary and Slovnaft in Slovakia with a total volume of refining reaching 12.5 million tonnes a year. Besides, 25%+1 share of the Croatian oil-gas company INA. MOL manages 812 petrol filling stations in Hungary, Slovakia, Slovenia, Austria, Romania and Poland. The main shareholders are the government of Hungary (11.8%), Austrian OMV (10%), the company itself (6.8%). The rest shares are listed in exchanges.

It bears reminding that the agreement on joint development and production sharing (PSA) for the Azeri, Chirag fields and the Deep Water Portion of the Gunashli Field (ACG) was signed under the leadership of the National Leader of Azerbaijan Heydar Aliyev in Baku on September 20, 1994.  On September 14, 2017 signed was the amended and restated agreement on the joint development and production sharing (PSA) for the Azeri, Chirag fields and the Deep Water Portion of the Gunashli Field (ACG) in the Azerbaijan Sector of the Caspian Sea.
 

Following completion of the contract, the new ACG participating interests will be as follows: BP, 30.37 per cent; SOCAR, 25.00 per cent; Chevron, 9.57 per cent; INPEX, 9.31 per cent; Equinor - 7,27%,ExxonMobil, 6.79 per cent; TPAO, 5.73 per cent; ITOCHU, 3.65 per cent; and ONGC Videsh Limited (OVL), 2.31 per cent. 

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