Hungary's MOL Snaps Up Chevron's Azeri Assets for $1,57 Billion

OE Staff Apr 17, 2020

The Deepwater Gunashli platform, offshore Azerbaijan - Image Credit: BP

U.S. oil giant Chevron has sold its stake in the BP-operated offshore oil fields in the Caspian Sea in Azerbaijan to Hungary's MOL for $1,57 billion.

More specifically, Chevron sold its non-operating interests in the Azeri-Chirag-Deepwater Gunashli (ACG) oil fields (including interests in the Western Export Route Pipeline) and the Baku-Tbilisi-Ceyhan (BTC) oil pipeline located in Azerbaijan.

Chevron Global Ventures Ltd. has sold its 9.57% interest in ACG, which had a daily net production of 20,000 barrels of oil equivalent per day in 2019. In addition, Chevron BTC Pipeline, Ltd. has completed the sale of its 8.9% interest in BTC.

Azeri-Chirag-Deepwater Gunashli (ACG) field located about 100km east of Baku is the largest oilfield in the Azerbaijan sector of the Caspian basin

"Chevron regularly reviews its global portfolio to assess whether assets are strategic and competitive for capital,” said Jay Johnson, executive vice president of upstream. “This sale is an important part of our divestment program, which is targeting before-tax proceeds of $5 billion to $10 billion between 2018 and 2020.”

MOL said: "With this transaction, MOL becomes the third-largest field partner in ACG, a supergiant oil field, located in the Caspian Sea, which is operated by BP and started production in 1997. This transaction is a major milestone in building MOL’s international E&P portfolio and a significant step to deliver on the inorganic reserve replacement targets. The operator estimates total gross recoverable reserves to be c.3bn bbl of oil, following the license extension in September 2017 until 2049."

The BP-operated ACG complex last year celebrated its 25th anniversary since the first oil. From the start of production in November 1997 till the end of 2Q 2019, ACG produced about 488 million tonnes (more than 3.6 billion barrels) of oil. On December 26, 2019, the field produced the 500 millionth tonne of oil.

Apart from BP and now MOL instead of Chevron, other partners in the ACG offshore fields are SOCAR, INPEX, Equinor, ExxonMobil, TPAO, ITOCHU, and ONGC Videsh Ltd (OVL).