ONGC Videsh, along with the State Oil Company of Azerbaijan (SOCAR) and a consortium of international energy majors, has signed an addendum to the existing Production Sharing Agreement (PSA) for the Azeri-Chirag-Deepwater Gunashli (ACG) field. This milestone deal aims to explore, appraise, and develop the Non-Associated Natural Gas (NAG) reservoirs in the ACG field, located in the Azerbaijan sector of the Caspian Sea. The addendum will extend the PSA for NAG exploration until 2049, aligning with the current ACG oil field agreement.
The co-signing parties include energy giants such as bp, MOL, INPEX, Equinor, ExxonMobil, TPAO, and ITOCHU, with bp continuing to operate the ACG field. This agreement marks a critical step in the broader utilisation of the ACG field, which has primarily focused on oil extraction since its inception.
The NAG reservoirs, located in multiple geological formations both above and below the existing oil reservoirs, were previously excluded from the ACG PSA. However, recent data collection, including the completion of a specialised well in 2023, has confirmed the presence of substantial gas reserves. The field is estimated to hold up to 4 trillion cubic feet (tcf) of natural gas in place.
In line with the new agreement, SOCAR and its co-venturers plan to drill an initial well to begin gas production from two priority NAG reservoirs. The first gas production is expected in 2025. The project is seen as a significant development for Azerbaijan’s energy sector and enhances the strategic importance of the Caspian region in global natural gas supply.
The signing of this deal coincided with celebrations of Azerbaijan’s national Oil Workers’ Day and marked the 30th anniversary of the original ACG PSA, underscoring the long-standing partnerships and contributions of international oil companies to the country’s energy success.
ONGC Videsh, which acquired its participating interest in the ACG project in 2013, holds a 2.31% stake in the NAG development. As India’s largest international oil and gas company, ONGC Videsh currently operates in 15 countries and produced over 10.5 million metric tonnes of oil and oil-equivalent gas (MMtoe) during the fiscal year 2024. With the signing of the new gas deal, ONGC Videsh is poised to further expand its footprint in Azerbaijan’s energy landscape.
The participating interests in the ACG field for NAG exploration mirror those of the existing PSA, with bp holding 30.37%, SOCAR 25%, and other international partners sharing the remaining stakes. The exploration of these NAG resources is expected to play a pivotal role in boosting Azerbaijan’s natural gas production and further solidifying its position as a key energy supplier to global markets.