Oil and gas firm MOL Group has signed an agreement with Chevron Global Ventures and Chevron BTC Pipeline to acquire their non-operated E&P and mid-stream interests in Azerbaijan for $1.57bn.
Under the agreement, MOL will purchase 9.57% stake in the Azeri-Chirag-Gunashli (ACG) oil field and 8.9% stake in the Baku-Tbilisi-Ceyhan (BTC) pipeline which transports crude to the Mediterranean port of Ceyhan.
Upon completion, the transaction will enable MOL to become the third largest field partner in ACG.
Located in the Caspian Sea, ACG is operated by BP and comprises six offshore production platforms. It produced an average of 584,000bpd in 2018.
MOL Group chairman and CEO Zsolt Hernádi said: “This major $1.57bn 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.
“Following the closing of the deal, around half of our production will come from outside the CEE region, giving us a healthy balance.”
These share purchases are in alignment with MOL’s 2030 strategy.
The oil field acquisition contributes to MOL’s annual hydrocarbon production of 20,000bpd in the coming years, thereby, significantly increasing the company’s proven and probable (2P) oil reserves.
MOL said that the total funding for the transaction will be financed from available liquidity of the company.
MOL Group Upstream executive vice-president Berislav Gaso said: “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.
“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 is expected to be completed in the second quarter of next year upon receipt of government and necessary regulatory approvals.