close_game
close_game

ONGC Videsh, partners win rights to produce gas from ACG field

By, Rajeev Jayaswal, New Delhi
Sep 24, 2024 08:32 AM IST

ONGC Videsh (OVL) and its partners on Saturday acquired a 25-year right to explore and produce natural gas from BP-operated Azeri-Chirag-Deepwater Gunashli (ACG) field

State-run energy explorer Oil and Natural gas Corp’s overseas arm ONGC Videsh (OVL) and its partners on Saturday acquired a 25-year right to explore and produce natural gas from BP-operated Azeri-Chirag-Deepwater Gunashli (ACG) field in addition to their decade-old rights of producing oil from the largest oilfield in the Azerbaijan sector of the Caspian basin.

The gas exploration and production rights in ACG was acquired by OVL and other partners through an addendum to the existing Production Sharing Agreement (PSA) . (Bloomberg)
The gas exploration and production rights in ACG was acquired by OVL and other partners through an addendum to the existing Production Sharing Agreement (PSA) . (Bloomberg)

“The NAG (non-associated natural gas) resources of ACG are believed to be significant, with up to 4 trillion cubic feet (tcf) in place,” ONGC informed bourses that saw 3.16% jump in company’s stock price in the BSE to 295.35. While associate natural gas is produces along with crude from an oil field, NAG is dry gas produced exclusively from gas fields.

The gas exploration and production rights in ACG was acquired by OVL and other partners through an addendum to the existing Production Sharing Agreement (PSA) . OVL acquired Hess Corporation’s 2.31% participating interest (PI) in the asset in April 2013. Besides BP (30.37% PI), other partners in the field are the State Oil Company of the Azerbaijan (SOCAR with 25% PI), Hungarian energy firm MOL Group (9.57%), Japanese company INPEX (9.31%), Norwegian firm Equinor (7.27%), ExxonMobil (6.79%), Turkish company TPAO (5.73%), and ITOCHU (3.65%).

“The addendum amends the ACG PSA enabling the parties to progress the exploration, appraisal, development of and production from the non-associated natural gas (NAG) reservoirs of the ACG field,” multinational oil giant BP said in a statement on September 20.

Rovshan Najaf, president of SOCAR called it a “remarkable day” in Azerbaijan’s energy journey. “The signing of this gas agreement represents not just a commercial triumph, but also a strategic milestone in our efforts to further diversify our energy resources,” he said. This project will bolster Azerbaijan’s role as a key supplier of energy to Europe, he added.

The addendum, signed on September 21, allows the stakeholders to explore, appraise, develop and produce from the non-associated natural gas reservoirs of the oil field until 2049. The field is located in the south Caspian Sea and covering an area of 435 sq km about 95 km off the coast of Azerbaijan; reserves are estimated to be up to 4 trillion cubic feet (tcf). The NAG reserves were not included in the original PSA signed in 2013. This agreement was amended in 2017 to extend its duration until December 2049.

The stakeholders agreed to drill a well in 2022 to collect gas pressure data from the NAG reserves in the field. The data confirmed the presence of natural gas within the expected pressure range last year. The stakeholders are now planning the development of the NAG reserves, with the first gas production expected in 2025.

ACG produces about 585,000 barrels per day. The crude is transported through the Baku-Tbilisi-Ceyhan (BTC) pipeline to Ceyhan on the Mediterranean coast of Turkiye, from where it is shipped to customers.

Get Current Updates on India News, Weather Today, Latest News at Hindustan Times.
See More
Get Current Updates on India News, Weather Today, Latest News at Hindustan Times.
SHARE THIS ARTICLE ON
SHARE
Story Saved
Live Score
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Tuesday, February 11, 2025
Start 14 Days Free Trial Subscribe Now
Follow Us On