MOL Group has agreed with Chevron Global Ventures and Chevron BTC Pipeline to acquire their non-operated E&P and midstream interests in Azerbaijan. The interests include a 9.57% stake in the Azeri-Chirag-Gunashli (ACG) oil field, as well as an 8.9% stake in the Baku-Tbilisi-Ceyhan (BTC) pipeline.
The ACG oil field is Azerbaijan’s largest strategic oil interest, while the BTC pipeline transports crude oil to the Mediterranean port of Ceyhan. The total consideration of the purchase is $1.57 billion (€1.41 billion), subject to adjustments at closing.
Once completed, the transaction will make MOL the third largest field partner in ACG. The field is the country’s flagship oil producing asset, covering 400 square kilometres, and includes six offshore production platforms. The field, which has been producing oil since 1997, is operated by BP and produced an average of 584,000 barrels per day in 2018.
The BTC pipeline, which transports crude oil from Azerbaijan to the port of Ceyhan in Turkey, will add around 20,000 barrels per day net to MOL’s production in the next few years, and will also increase the company’s proved and probable reserves.
“This major $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,” commented Zsolt Hernádi, MOL Group’s chairman and CEO. “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.”
"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,” added Berislav Gaso, executive vice-president for upstream at MOL Group. “By completing the ACG acquisition we are well positioned to preserve the excellent cash-flow generation ability of MOL’s E&P business for an extended period. MOL E&P has built a strong track record of delivering outstanding profitability over the course of the past three years and with this transaction we are continuing MOL E&P’s transformation to an international business, as promised in our MOL 2030 Strategy.”
The transaction, which is subject to government and regulatory approvals, is expected to close by the second quarter of 2020.
POPULAR NEWS STORIES
LATEST VIDEOWatson Marlow pump collaboration with Siltbuster