ONGC Videsh buys Hess's stake in Azerbaijan's ACG fields for $1 billion

ONGC Videsh Ltd (OVL), the overseas arm of state-run Oil and Natural Gas Corporation Ltd (ONGC) has acquired US energy firm Hess Corporation's interests in the Azeri, Chirag and Guneshli (ACG) group of oil fields in Azerbaijan, for $1 billion.

OVL bought Hess Corporation's 2.72 per cent interest in the Azeri, Chirag, and Guneshli (ACG) fields in Azerbaijan and its 2.36 per cent equity stake interest in the associated Baku-Tbilisi-Ceyhan (BTC) pipeline, for $1 billion, the US firm said in a statement.

The ACG field, which lies 120 km off the coast of Azerbaijan in 120 meters of water, has total estimated reserves of over 6.5 billion barrels and produced 16.8 million tonnes of crude oil during January-June 2012.

The production sharing agreement (PSA) for the ACG field, signed in September 1994, covers the 30-year development of the Azeri-Chirag-Gunashli exploration area.

The Chirag oil project is currently at the execution stage with first oil expected in 2013, Hess said.

Overall production from all phases is expected to be about 1 million barrels per day, it added.