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    MOL to Pay $1.57bn for Chevron's ACG Stake


MOL will acquire Chevron's interests in both ACG and the BTC pipeline that pumps its oil to markets.

by: Joseph Murphy

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MOL to Pay $1.57bn for Chevron's ACG Stake

Hungary’s MOL is set to replace Chevron as a shareholder at Azerbaijan’s largest oil and gas project, under a $1.57bn deal it announced on November 4.

MOL has agreed to buy Chevron’s 9.57% stake in the offshore Azeri-Chirag-Gunashli (ACG) development, along with its 8.9% share in the Baku-Tbilisi-Ceyhan (BTC) pipeline that pumps ACG's oil to market, it said in a statement. Pending government and regulatory approvals, the transaction should close in the second quarter of 2020, MOL said, and will be backdated to January 1 this year.

MOL was reported to be in talks to acquire Chevron’s interests in Azerbaijan last month. The company had initially considered buying ExxonMobil’s 6.8% share in ACG as well, before deciding against it.

MOL expects to add around 360-380mn barrels of oil equivalent to its proven and probable reserves as a result of the purchase.

“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,” MOL CEO Zsolt Hernadi said.

ACG is operated by BP, with other partners including Azerbaijan’s SOCAR, Japan’s Inpex and Itochu, Norway’s Equinor, Turkish Petroleum and India’s ONGC Videsh.

After the deal is closed, Hernadi said, around half of MOL’s production will come from outside central and eastern Europe. ACG produced 584,000 barrels per day of oil last year and 2.34bn m3 of gas.

“With these new barrels we are also strengthening our resilient, integrated business model, which will continue to generate robust cash flow to finance the MOL 2030 transformational projects as well as rising dividends to our shareholders,” he said.

ACG consists of a cluster of oilfields situated 100 km east of Baku in the Caspian Sea that have been producing since 1997 and are now considered mature. But its investors still estimate that a further 3bn barrels of oil can be recovered and have greenlit construction of a seventh platform.