SOCAR Expands Influence in Caspian Basin with Equinor Deal

Equinor is exiting Azerbaijan by selling all its oil and gas assets there to Azeri state energy firm SOCAR, the Norwegian major said on Friday. 

For an undisclosed sum, Equinor will divest all its assets in Azerbaijan, which include a 7.27% non-operated interest in the huge Azeri Chirag Gunashli (ACG) oil fields in the Caspian Sea, an 8.71% interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline, and 50% in the Karabagh field. 

SOCAR already holds a 25.0% stake in ACG, a 25.0% interest in BTC via Azerbaijan BTC Limited, and 50% in Karabagh. 

The closing of the transaction is subject to the satisfaction of certain conditions including all regulatory and contractual approvals, the Norwegian company said.  

"Equinor is in the process of re-shaping its international oil and gas business, and the divestments in Azerbaijan are in line with our strategy to focus our international portfolio," said Philippe Mathieu, Equinor's executive vice president for international exploration and production. 

Azeri Chirag Gunashli (ACG) is the largest oilfield in the Azeri sector of the Caspian basin and is operated by UK oil and gas supermajor BP. 

Earlier this month, BP said it had started drilling the first production well from a new platform developing the next $6-billion stage of the giant field in the Caspian Sea in Azerbaijan. 

The $6 billion ACE project is the next stage of development of the giant ACG field in the Caspian Sea. The Azeri-Chirag-Deepwater Gunashli (ACG) field is located about 100 kilometers (62 miles) east of Baku and is the largest oilfield in the Azerbaijan sector of the Caspian basin.

The new platform and facilities are designed to process up to 100,000 barrels of oil per day (bpd) and the project is expected to produce up to 300 million barrels over its lifetime, BP says.

The new project was sanctioned in April 2019 and was the first major investment decision by the ACG partnership following the extension of the ACG Production Sharing Agreement (PSA) to 2049, agreed in 2017.   

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• BP Leads Oil Majors in Rerouting Ships Away from Red Sea
• China's Renewable Energy Capacity Tops 50% Milestone
• Falling Nickel Prices Weigh Heavy on Stainless Steel Industry