The Cabinet Committee on Economic Affairs (CCEA) today approved ONGC Videsh Ltd (OVL)'s $1 billion acquisition of US energy firm Hess Corporation's interests in the Azeri, Chirag and Guneshli (ACG) group of oil fields in Azerbaijan.
In September 2012, OVL, the overseas arm of state-run Oil and Natural Gas Corporation Ltd (ONGC), had proposed to buy Hess Corporation's 2.72-per cent staket in the ACG fields in Azerbaijan and its 2.36 per cent interest in the associated Baku-Tbilisi-Ceyhan (BTC) pipeline, for $1 billion. (See: ONGC Videsh buys Hess's stake in Azerbaijan's ACG fields for $1 billion)
The CCEA authorised OVL to to keep the total exposure up to the approved amount of $1 million over $1 billion ($1,001 million) at all times. The acquisition would add nine per cent additional proven reserves to OVL.
The approval comes in the same week when OVL received approval from Kazakhstan's Kashagan oilfield partners for its $5-billion acquisition of US energy giant ConocoPhillips' 8.4-per cent stake in the massive Kashagan oilfield (See: Kazakh oil project partners approve ONGC's acquisition of ConocoPhillips' stake).
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.
BP holds 34.1 per cent stake in the ACG fields while Chevron Corp holds 10.3 per cent, SOCAR 10 per cent, Inpex 10 per cent, Statoil 8.6 per cent, ExxonMobil Corp 8 per cent, TPAO 6.8 per cent, Devon Energy Corp 5.6 per cent and Itochu 3.9 per cent.