The proposal of ONGC Videsh (OVL) to pick up the 2.7213 per cent stake of US energy major Hess Corp in the Azerbaijan oilfield received approval from the Cabinet Committee on Economic Affairs (CCEA).
According to the plan, OVL would invest $ 1.001 billion to buy 2.7213 per cent stake of the above mentioned firm in Azeri, Chirag and the deep water portion of Guneshli fields (together called ACG) in the Azerbaijan sector of the Caspian Sea. It would also buy 2.36 per cent interest of Hess Corp in the Baku-Tbilisi-Ceyhan (BTC) pipeline.
ACG is located in the south Caspian Sea, about 95 km off the coast of Azerbaijan. It is the largest oil and gas field complex in Azerbaijan and one of the largest producing oil fields in the world.
The CCEA authorised “OVL to incur expenses so as to keep the total exposure up to the approved amount ie $ 1.001 billion at all times, an official statement of the government said.
OVL would get about 1 million tonne per annum of oil for about a decade. In addition to oil revenue, the investment would enable OVL to enter into Azerbaijan, which is rapidly emerging into a strategically important country in the CIS region, it said.
The deal may facilitate OVL to raise its portfolio around the region and transport crude from future assets, which the company may acquire in the Caspian Sea in the future.
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