US firms Exxon Mobil and Chevron are reportedly exploring the sale of their stakes in the Azeri-Chirag-Gunashli (ACG) oilfield in the Caspian Sea, around 120km off the coast of Azerbaijan.
Exxon expects to raise up to $2bn from the divestment of its 6.8% interest in the field, Reuters reported, citing unnamed industry and banking sources.
In addition to the sale of its 9.57% stake in the ACG field, Chevron is also looking to offload its 8.9% interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline.
Said to be the largest oilfield in the Azerbaijan sector of the Caspian basin, the field is operated by UK-based firm BP on behalf of the Azerbaijan International Operating Company (AIOC).
“ACG was discovered in the early 1970s when Azerbaijan was part of the Soviet Union.”
BP owns a 30.4% interest in the field. Other participants in the ACG include Azerbaijan’s state oil company Socar (25%), Inpex (9.3%) and Equinor (7.3%). TPAO, Itochu, and India’s ONGC Videsh also own interests in the project.
ACG was discovered in the early 1970s when Azerbaijan was part of the Soviet Union.
In 1994, the consortium signed a production sharing agreement (PSA) with the Government of Azerbaijan for the development of the area covering three major oil fields, namely Azeri, Chirag and the deepwater portion of the Gunashli field (ACG).
Supported by the US Government, the deal involved five American firms, including Exxon, Amoco and McDermott.
The field’s large reserves and the potential future major discoveries raised hopes that it could be seen as a key project to help reduce Europe’s dependence on Russian oil and gas.
However, these hopes eventually faded as new large discoveries could not be made and the majority of the US firms exited the project.
The ACG fields produced around 75% of overall Azeri crude production, or nearly 600,000 barrels a day, in the first half of this year.