ONGC Videsh and Partners Extend Agreement to Tap 4 TCF Gas in Azerbaijan’s ACG Field

ONGC Videsh, along with the State Oil Company of Azerbaijan (SOCAR) and other partners, including bp, MOL, INPEX, Equinor, ExxonMobil, TPAO, and ITOCHU, signed an addendum to the existing Production Sharing Agreement (PSA) for the ACG Field in the Caspian Sea’s Azerbaijan sector. This addendum allows the companies to continue exploring, evaluating, developing, and producing from the Non-Associated Natural Gas (NAG) reservoirs of the ACG field until the end of the current PSA in 2049.

The NAG resources in the ACG field are believed to be substantial, with an estimated 4 trillion cubic feet (tcf) of natural gas. The signing ceremony for this new agreement took place in Baku, coinciding with Azerbaijan’s National Oil Workers’ Day and the 30th anniversary of the original ACG PSA signing.

The shareholding interests of the partners in the NAG project remain unchanged from the existing ACG PSA: bp (30.37%), SOCAR (25.0%), 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 to operate the ACG PSA.

The NAG reservoirs are located in different geological layers above and below the current oil-producing reservoirs and were not included in the original ACG PSA. In 2022, the partners and SOCAR agreed to drill a data well to gather gas pressure data from the NAG reservoirs. The well was completed in 2023, and the results confirmed the presence of natural gas resources with the expected pressure levels.

Following the addendum, SOCAR and the ACG partners are now planning the next steps for developing the Non-Associated Natural Gas (NAG) reservoirs. They plan to drill an initial well to start gas production from two key reservoirs, with the first output expected in 2025.

ONGC Videsh acquired its stake in the ACG project back in 2013. It is a wholly-owned subsidiary of ONGC, India’s leading national oil company. ONGC Videsh focuses on oil and gas exploration and production (E&P) operations outside India and is the country’s largest international oil and gas E&P company, managing 32 assets across 15 countries. In the financial year 2023-24, ONGC Videsh produced 10.518 million metric tons of oil and oil equivalent gas (O+OEG) and is currently producing around 200,000 barrels of O+OEG per day.

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