Shares of oil explorer ONGC rose 3% on Monday after signing a deal in Azerbaijan.

What Happened: ONGC on Saturday said it signed an addition to an existing production sharing agreement (PSA) for the Azeri-Chirag-Deepwater Gunashli (ACG) Field in the Azerbaijan sector of the Caspian Sea.

The deal was signed with the State Oil Company of Azerbaijan (SOCAR), BP, MOL, INPEX, Equinor, ExxonMobil, TPAO and ITOCHU. 

The company said the deal allows all the parties to progress on the "exploration, appraisal, development and production from the Non-Associated Natural Gas (NAG) reservoirs of the ACG field," the company said in the regulatory filing. The deal is effective and will last until the existing agreement ends in 2049.

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The company said the NAG resources in the ACG well could be up to 4 trillion cubic feet. The NAG reservoirs were not initially included in the first agreement, ONGC added. 

The deal comes after HSBC downgraded the stock to "reduce" with a target price of ₹235. The research firm said the falling crude oil prices threaten the viability of future projects. 

Price Action: Shares of ONGC surged 3.28% to an intraday high of ₹295.65. 

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