New Delhi: The Cabinet Committee on Economic Affairs (CCEA) is likely to consider tomorrow approving ONGC Videsh Ltd's USD 1 billion acquisition of a stake in an Azerbaijan oilfield.
OVL had in September last year agreed to buy US energy firm Hess Corp's 2.7213 percent stake in the Azeri, Chirag and the deep water portion of Guneshli fields in the Azerbaijan sector of the Caspian Sea and 2.36 percent interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline for USD 1 billion.
Official sources said the approval for the deal was listed on CCEA agenda for tomorrow's meeting.
The acquisition was subject to government and regulatory approvals and is expected to close by the first quarter of 2013.
The buyout marks OVL's entry into oil rich Azerbaijan.
ACG, which is located in the south Caspian Sea, about 95 km off the coast of Azerbaijan, is the largest oil and gas field complex in Azerbaijan and one of the largest producing oil fields in the world.
The UK's BP Plc operated field produces around 700,000 barrels a day (35 million tonnes per annum) of crude oil. This is more than India's annual oil production.
OVL's share of output would be over 19,000 bpd or a little less than one million tonnes per annum.
The acquisition would bring 9 percent additional proved reserves to OVL, the overseas arm of state-owned Oil and Natural Gas Corp, or ONGC) portfolio, sources said.
While the AGC field has total reserves of over 6.5 billion barrels, the 1,768-km BTC pipeline is one of the main export routes for Caspian crude oil production to the Ceyhan terminal in the Mediterranean Sea in south east Turkey, with a capacity of around 1.0 million bpd.
UK's BP plc is the operator of the ACG fields with 34.1 percent stake.
Other partners include Chevron (10.2 percent), State Oil Company of Azerbaijan Republic (SOCAR 10 percent), Inpex (10 percent), Norway's Statoil (8.6 percent), ExxonMobil (8 percent), Turkish national oil company TPAO (6.8 percent), Chevron (5.6 percent) and Japanese Itochu (3.9 percent).
As part of the deal, OVL will also buy Hess' 2.36 percent stake in BTC export pipeline.
The pipeline transports crude oil from Azeri capital city of Baku to the Mediterranean port of Ceyhan in Turkey via Georgia.
OVL is present in 15 nations including Brazil, Colombia, Cuba, Iran, Iraq, Kazakhstan, Libya, Myanmar, Nigeria, Russia, South Sudan, Sudan, Syria, Venezuela and Vietnam.
First Published: Wednesday, January 30, 2013, 16:17