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Norway’s state oil company Equinor is considering the sale of its assets in Azerbaijan, Bloomberg has reported, adding that the sale would include Equinor’s stake in the biggest oil project in the Caspian country, the Azeri-Chirag-Guneshli field.
The massive offshore field in the Caspian Sea contains an estimated 5.4 billion barrels of recoverable oil. With total investments of some $20 billion, production at the field began in late 1997 with peak production seen in 2009.
Besides Equinor, the operator BP has as partners in the ACG field Japan’s Inpex, Exxon, Itochu, India’s ONGC Videsh, and the Azeri state oil and gas company, SOCAR.
Per the terms of the contracts between the shareholders, SOCAR has the right of first refusal to Equinor’s offer for sale, after which the Norwegian major can look for other buyers.
According to unnamed sources cited by Bloomberg, there are already interested parties and negotiations are underway but there is no certainty these will result in a sale.
Azerbaijan, meanwhile, is boosting its natural gas profile. The country recently ramped up its gas exports to Europe after the cutoff of most Russian pipeline supply last year, sending some 2.9 billion cubic meters via the Trans-Adriatic Pipeline during the first quarter of the year.
This is a small amount compared to what Europe was getting from Russia but plans are in motion to boost Azeri deliveries further. By 2027, the EU and Azerbaijan plan to have at least 20 billion cubic meters flowing from the Caspian country to Europe.
This year, Azeri gas exports to Europe are seen at some 11.6 billion cubic meters, which would be a minor increase on total exports in 2022, which stood at 11.4 billion cubic meters.
Meanwhile, BP announced a new gas discovery at the ACG field, with Eurasianet reporting production from the new find could begin as early as 2024.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com