ONGC To Acquire Stake In Azerbaijan's ACG Oil Field For ₹498 Cr

ONGC Videsh Limited has penned a sale purchase agreement (SPA) to acquire a stake in Azerbaijan’s ACG oil field and shares in the Baku Tbilisi Ceyhan (BTC) pipeline company.

What Happened: ONGC Videsh announced on Friday that it will directly acquire 0.615% Participating Interest (PI) in the Offshore Azeri Chirag Gunashli (ACG) oil field from Equinor. Furthermore, the company will gain 0.737% shares of the BTC pipeline company via its wholly-owned subsidiary ONGC BTC Limited.

The acquisitions, which are anticipated to be finalised in the upcoming months, will involve a total investment of up to $60 million (around ₹498 crore). These acquisitions are in addition to ONGC Videsh's existing 2.31% PI in the ACG field and 2.36% shareholding in the BTC pipeline.

The ACG oil field, a super-giant offshore oil field located in the Caspian Sea, has been under the operation of BP since 1999. The BTC pipeline transports oil from the ACG field and condensates from Shah Deniz across Azerbaijan, Georgia, and Turkey.

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This acquisition by ONGC Videsh, which owns 32 assets in 15 countries, aligns with its strategic objective of enhancing India’s energy security by adding high-quality international assets to its existing portfolio.

Earlier in the day, Citi maintained a "buy" rating on the company and raised the target price by around 18% to ₹370 from the previous ₹315. This adjustment was based on an optimistic outlook for both oil and gas production as well as realisations.

ICICI Securities has also expressed optimism about the oil and gas sector, expecting oil and liquefied natural gas (LNG) demand to remain strong in the near term. The brokerage has recommended a “buy” call for ONGC, among other companies.

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