ONGC Videsh, together with partners including the State Oil Company of Azerbaijan (SOCAR), bp, MOL, INPEX, Equinor, ExxonMobil, TPAO, and ITOCHU, has signed an important addendum to the existing Production Sharing Agreement (PSA) for the Azeri-Chirag-Deepwater Gunashli (ACG) field in the Azerbaijan sector of the Caspian Sea. This strategic agreement amends the PSA to progress the exploration, appraisal, development, and production of Non-Associated Natural Gas (NAG) reservoirs within the ACG field.
The newly amended agreement is set to run until 2049, coinciding with the end of the original PSA. The NAG resources of the ACG field are believed to be substantial, with estimated reserves of up to 4 trillion cubic feet (tcf). The deal was signed in Baku as part of the celebrations marking Azerbaijan’s National Oil Workers’ Day and the 30th anniversary of the original ACG PSA.
Under the agreement, all co-venturers will maintain their existing participating interests in the NAG project: bp (30.37%), SOCAR (25%), MOL (9.57%), INPEX (9.31%), Equinor (7.27%), ExxonMobil (6.79%), TPAO (5.73%), ITOCHU (3.65%), and ONGC Videsh (2.31%). BP continues as the operator for the ACG PSA.
The NAG reservoirs, located in multiple geological formations above and below the current oil-producing reservoirs, were initially excluded from the original PSA. In 2022, ACG co-venturers and SOCAR drilled a data well to assess these reservoirs, and by 2023, the findings confirmed significant natural gas resources. Based on this, SOCAR and its co-venturers are moving ahead with plans to drill an initial production well, targeting gas production from two key reservoirs by 2025.
ONGC Videsh, a wholly owned subsidiary of ONGC, acquired its stake in the ACG project in 2013. As India’s largest international oil and gas exploration and production company, ONGC Videsh operates 32 assets across 15 countries. In FY24, ONGC Videsh produced 10.518 million metric tonnes of oil equivalent (MMtoe) and is currently producing around 200,000 barrels of oil equivalent per day across its global projects.
This new addendum is expected to significantly boost gas production and strengthen ONGC Videsh’s international presence in the oil and gas sector.