OVL Hikes Stake in Azerbaijani Oilfield with $60 Million Investment

ONGC Videsh Limited (OVL), a subsidiary of ONGC, has acquired Norwegian firm Equinor’s stake in Azerbaijan’s offshore Azeri Chirag Gunashli (ACG) oil field and an associated oil pipeline for $60 million. This increases OVL’s stake in the oil field to 2.95% and in the Baku-Tbilisi-Ceyhan (BTC) pipeline to 3.097%.

OVL’s Investment in ACG Oil Field and BTC Pipeline

Initial Investment (2013)

OVL first invested in ACG in 2013, acquiring a 2.72% stake.

Current Stake

Before the deal, OVL held a 2.31% stake in ACG and a 2.36% stake in the BTC pipeline.

New Acquisition

The recent purchase includes 0.615% in ACG and 0.737% in the BTC pipeline from Equinor, bringing OVL’s total stakes to 2.95% and 3.097%, respectively.

Azeri Chirag Gunashli Oil Field

Location

Located in the Caspian Sea, Azerbaijan.

Ownership

State Oil Company of Azerbaijan Republic (SOCAR) holds 25%, BP operates the field with a 30.37% stake, and other shareholders include Japanese firms and ExxonMobil.

Production

The field has been developed in phases, with the seventh platform, Azeri Central East, commissioned in early 2024.

Baku-Tbilisi-Ceyhan (BTC) Pipeline

Function

Transports oil from ACG and condensate from Shah Deniz across Azerbaijan, Georgia, and Turkey to the Ceyhan marine terminal in Turkey.

Ownership

SOCAR holds 25% through Azerbaijan BTC Limited.

About ONGC Videsh Limited (OVL)

Foundation

Established in 1965 as a wholly-owned subsidiary of ONGC to explore and develop petroleum and gas fields outside India.

Operations

OVL is the second-largest petroleum company in India by reserves and production, with stakes in 32 oil and gas projects across 15 countries.

Recent Production

In 2023-24, OVL produced 7.178 million metric tonnes of crude petroleum oil and 10.518 million metric tonnes of oil equivalent gas.

Headquarters

New Delhi.

Chairperson

Arun Kumar Singh.

Strategic Importance

Long-term Commitment

The ACG contract was extended till 2049 in 2017, reducing the stakes of international oil companies and adjusting OVL’s stake to 2.31% from 2.72%.

Equinor’s Exit

Equinor had previously agreed to sell its entire stake to SOCAR but ended up selling part of it to OVL, raising questions about the transaction details.

Piyush Shukla

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