MOL agrees to acquire 9.57% stake in ACG Oil Field, 8.9% stake in BTC pipeline

MOL Group has entered an agreement with Chevron Global Ventures, Ltd and Chevron BTC Pipeline, Ltd for the acquisition of their non-operated E&P and mid-stream interests in Azerbaijan, including a 9.57% stake in the Azeri-Chirag-Gunashli (ACG) oil field, and an 8.9% stake in the Baku-Tbilisi-Ceyhan (BTC) pipeline.

The deal represents a total consideration of US$1.57bn (subject to adjustments at closing) with an effective date of 1 January 2019.

Once completed, this transaction will make MOL the third-largest field partner in ACG.

The supergiant ACG field is located in the Caspian Sea and is one of the largest offshore oil fields in the world which started production in 1997. Operated by BP and encompassing six offshore production platforms, ACG produced an average of 584,000 barrels per day in 2018. The operator estimates total gross recoverable reserves to be c.3bn bbl of oil, following the license extension in September 2017 until 2049.

Baku-Tbilisi-Ceyhan (BTC) is a 1,768 km pipeline project that runs 443  km through Azerbaijan, 249 km through Georgia and 1,076 km through Turkey to the Ceyhan Marine Terminal.

The transaction is subject to government and regulatory approvals and is expected to close in Q2 2020. MOL expects the Group’s Pro-forma total hydrocarbon 2P reserves to increase to around 360-380mmboe by the end of 2020.