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ONGC Videsh’s consortium partners ink PSA extension deal with Azerbaijan govt

Consortium partners of ONGC Videsh Limited have entered into an agreement with Azerbaijan government and State Oil company of the Azerbaijan Republic for extension of duration of the Production Sharing Agreement (PSA) for Azeri-Chirag-Deep water portion of Gunashil(ACG) oil fields until December 31, 2049, says a release on 18th Sept.

ONGC Videsh Limited, the subsidiary of the Indian flagship Oil and natural Gas Corporation Limited holds a participating interest in ACG oil fields in the Azerbaijan sector of Caspian Sea. The other partners in the consortium are BP, Chevron, INPEX, Statoil, Exxon Mobil, TPAO and ITOCHU. The agreement is subject to ratification by the Parliament (Milli Majlis) of the Republic of Azerbaijan.

The agreement was signed in Baku on 14th Sept 2017, in the presence of H.E. President Illham Aliyev of the Republic of Azerbaijan and a group of visiting senior government and state officials, by Rovnag Abdullayev, President of SOCAR, on behalf of the Azerbaijan government, and by the representatives of the co-venture companies, including ONGC Videsh Limited. Ambassador of India to Azerbaijan Mr Sanjay Rana was also present in the signing ceremony.

As part of the agreement, the international co-ventures will pay a bonus of $3.6 billion to the State Oil Fund of the Republic Azerbaijan, and SOCAR will increase its equity share in the ACGPSA from 11.65 per cent to 25 per cent. Following completion of the agreement, the new ACG participating interests will be : BP, 30.37 per cent; AzACG(SOCAR), 25 per cent; Chevron 9.57 per cent; INPEX 9.31 per cent; Statoil 7.27 per cent; ExxonMobil 6.79 per cent; TPAO 5.73 per cent; ITOCHU 3.65 per cent; and ONGC Videsh Limited 2.31 per cent. ONGC Videsh’s share of the total bus payments is about USD 111 mn.

The ACG oil fields are located in the Caspian Sea, approximately 100 kilometers east of Baku, the capital of the Republic of Azerbaijan. The ACG oil fields currently produce crude oil at a rate of approximately 585,000 barrels per day (Average rate for first half of 2017) from three oil fields (Azeri Oil Field, Chirag Oil Field and Deep Water portion of Gunashil Oil Field), Crude oil produced at the ACG oil fields is transported through the Baku-Tbilisi-Ceyhan pipeline (BTC pipeline) to Ceyhan on the Mediterranean coast of the Republic Turkey, from where it is shipped to customers.

The existing ACG PSA was signed on 20th Sept 1994 for thirty years. There is substantial amount of remaining oil and gas in the field and the PSA extension will benefit Azerbaijan and partners through sustained long term production. ONGC Videsh had acquired 2.7213 per cent participating interest in the ACG PSA and 2.36% in BTC Pipeline from Hess Corporation on 28th March 2013.


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