OVL Acquires Stake in Azeri Oil, Gas Block

ONGC Videsh Ltd (OVL), the overseas arm of ONGC has decided to acquire Hess Corp’s 2.72 per cent stake in Azeri, Chirag and the deepwater portion of Guneshli fields in the Azerbaijan sector of the Caspian Sea (ACG) and another 2.36% interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline for $1 billion.

ACG, which is located in the south Caspian Sea about 95 km off the coast of Azerbaijan, is the largest oil and gas field complex in Azerbaijan and is one of the largest producing oil fields in the world.

The 1,768-km BTC Pipeline is one of the main export routes for Caspian crude oil production with a capacity of  around 1.0 million bopd to the Ceyhan terminal in the Mediterranean Sea in south east Turkey.

The acquisition is subject to government approval and the deal is expected to close by the first quarter of 2013.

"The acquisition is consistent with ONGC's stated strategic objective of adding high quality international assets to its existing E&P portfolio. The acquisition would bring 9 per cent additional proved reserves to OVL portfolio and also bears significant strategic importance to India in terms of contributing towards India’s energy security,” the release said.