Contract of the Century expetded to 2050

Live Mint
Contract of the Century expetded to 2050

The signing ceremony of a new contract on development of the Azeri-Chirag-Gunashli (ACG) block of oil and gas fields in the Azerbaijani sector of the Caspian Sea took place last week. The Azerbaijani government and AzACG (SOCAR), BP, Chevron, INPEX, Statoil, ExxonMobil, TP, ITOCHU, ONGC Videsh signed a new contract which would operate till 2050.

Live Mint reports in its article ONGC Videsh, consortium partners get Azerbaijan oil field contract extension that ONGC Videsh and partners signed a pact with the Azerbaijan government and oil firm SOCAR for extending a production contract for oil fields till 2049 for a $3.6 billion bonus payment.

ONGC Videsh Ltd and partners have signed an agreement with the Azerbaijan government and State Oil Company of the Azerbaijan Republic (SOCAR) for extending a production contract for oil fields in the Caspian sea till 2049 for a $3.6 billion bonus payment, ONGC Videsh said in a statement here. The consortium partners include BP p.l.c., Chevron Corp., Statoil ASA and ExxonMobil Corp., ONGC Videsh said. The original production contract for the Azeri-Chirag-Deep water portion of Gunashli (ACG) oil fields was to expire in 2024. ONGC Videsh said it had acquired a 2.7% stake in the field in 2013, but after the extension, will hold 2.31% as SOCAR raises its stake in the consortium.

ONGC Videsh’s share of the total bonus payments is about $111 million. The Azeri-Chirag-Deepwater Gunashli (ACG) complex in the Caspian Sea produces most of Azerbaijan’s crude oil. It is located at about 100 kilometres east of Baku, the capital of Azerbaijan. “The agreement is subject to ratification by the Parliament (Milli Majlis) of the Republic of Azerbaijan,” the statement said.

As part of the agreement, SOCAR will increase its equity share in the ACG from 11.65% to 25%.

The fields currently produce 585,000 barrels per day of oil, which is transported through the Baku-Tbilisi-Ceyhan (BTC) pipeline to Ceyhan on the Mediterranean coast of Turkey, from where it is shipped to customers.

“There is substantial amount of remaining oil and gas in the field and the production sharing contract extension will benefit Azerbaijan and partners through sustained long term production,” ONGC Videsh statement said. The agreement was signed in Baku on 14th September, the company added.