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 Azerbaijan extends BP contract for giant oilfield

MOL buys stake in Azerbaijan oilfield from Chevron

Nov 05, 2019
2 min read
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Hungary's MOL has signed a US$1.57 billion deal with U.S. oil giant Chevron to acquire their non-operated E&P and mid-stream interests in Azerbaijan, including a 9.57 per cent stake in the Azeri-Chirag-Gunashli (ACG) oilfield, and a 8.9 per cent stake in the Baku-Tbilisi-Ceyhan (BTC) pipeline.

The deal with have an effective date of 1 January 2019 and once completed, this transaction will make MOL the third largest field partner in ACG. The deal is subject to government and regulatory approvals and is expected to close in Q2 2020.

“This major US$$ 1.57 billion transaction is a significant milestone in building our international E&P portfolio, in one of our core regions, the CIS, where we will team up with world-class partners. Following the closing of the deal, around half of our production will come from outside the CEE region, giving us a healthy balance. With these new barrels we are also strengthening our resilient, integrated business model, which will continue to generate robust cash flow to finance the MOL 2030 transformational projects as well as rising dividends to our shareholders,” commented Zsolt Hernádi, MOL Group’s Chairman-CEO.

The supergiant ACG field is located in the Caspian Sea and is operated by BP and encompassing six offshore production platforms, ACG produced an average 584,000 barrels per day in 2018.

MOL said it expects the Group’s pro-forma total hydrocarbon 2P reserves to increase to around 360-380 mmboe by the end of 2020.

"The ACG deal marks the beginning of a new chapter in MOL’s E&P story as we take a significant step to deliver on our promise of inorganic reserve replacement," said Dr. Berislav Gaso, MOL Group, Executive Vice President for Upstream.

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