Azerbaijan okays deal between MOL Group, Chevron on ACG project

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Azerbaijan has approved a deal on the purchase of US Chevron’s share by the Hungarian MOL Group oil and gas company in the development of Azeri-Chirag-Guneshli (ACG) block of fields in the Azerbaijani sector of the Caspian Sea and in the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, Ibrahim Ahmadov, deputy head of the SOCAR Public Relations and Event Management Department, told Trend.

“With the approval from Azerbaijan, MOL will become one of the full members of the consortium on the development of the ACG block and the BTC pipeline,” Ahmadov said.

On Sept.20, 1994, the government of Azerbaijan and a group of international oil companies representing eight countries signed the Azeri-Chirag-Gunashli Production Sharing Agreement, which later became known as the “Contract of the Century”. The Contract was extended in September 2017 until mid-century.

ACG participating interests are: BP (30.37 percent), SOCAR (25 percent), Chevron (9.57 percent), INPEX (9.31 percent), Equinor (7.27 percent), ExxonMobil (6.79 percent), TPAO (5.73 percent), ITOCHU (3.65 percent), ONGC Videsh Limited (OVL) (2.31 percent).

In November 2019, Hungarian MOL Group company signed an agreement with Chevron Global Ventures Ltd and Chevron BTC Pipeline Ltd to acquire a 9.5-percent stake in the development project of the ACG block of oil and gas fields and an 8.9-percent stake in the Baku-Tbilisi-Ceyhan (BTC) pipeline project.

The total value of the contract is $1.5 billion, taking into account adjustments at the closing of the transaction, which will be financed through the existing liquidity of the company. Upon completion of this transaction, MOL will become the third biggest partner in the ACG. The transaction is expected to be completed by the second quarter of 2020.

The total length of the BTC pipeline is 1,768 kilometers, of which 443 kilometers run through the territory of Azerbaijan, 249 kilometers run through Georgia, and 1,076 kilometers go through Turkey. The construction of the pipeline began in April 2003, and it was first filled with oil on May 18, 2005.