Azerbaijan has extended the oil production contract with ONGC Videsh, BP, Chevron and other consortium partners until 2049 for the giant ACG fields after companies agreed to pay $3.6 billion in bonus to the government and higher stake in the fields to the state oil firm of the Central Asian nation.
The ACG oil fields are in the Caspian Sea, about 100 kilometers east of Azerbaijan’s capital Baku, and produce 585,000 barrels per day of crude oil from three oil fields of Azeri, Chirag and deep water portion of Gunashli. The crude is transported through the Baku-Tbilisi-Ceyhan pipeline (BTC pipeline) to Ceyhan on the Mediterranean coast of the Republic of Turkey.
“As part of the agreement, the international co-venturers will pay a bonus of $3.6 billion to the State Oil Fund of the Republic of Azerbaijan, and State Oil Company of the Azerbaijan Republic (SOCAR) will increase its equity share in the ACG production sharing agreement from 11.65 per cent to 25 per cent,” ONGC Videsh said in a statement.
“Following completion of the agreement, the new ACG participating interests will be: BP, 30.37 per cent; AzACG (SOCAR), 25.00 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,” it said. ONGC Videsh’s share of the total bonus payments is about $111 million.
The agreement, signed in Baku on 14th September, is subject to ratification by the Parliament of the Republic of Azerbaijan.
The existing ACG production sharing agreement was signed in 1994 for thirty years. ONGC Videsh had acquired 2.7213% participating interest in the ACG field and 2.36% in BTC Pipeline from Hess Corporation in 2013.
