ONGC Videsh (OVL), the foreign arm of state-run Oil and Natural Gas Corporation (ONGC), has signed an agreement with SOCAR Trading, trading arm of Azerbaijan’s government-owned energy firm, SOCAR, for foraying into oil trading business.
The objective of the pact, signed in Geneva on May 27, is to explore the possibility of joint marketing of OVL’s crude oil portfolio by leveraging SOCAR Trading’s experience in oil trading, OVL stated. “Both the parties agreed to initiate discussion on joint marketing agreement in respect of OVL’s equity crude from ACG, Azerbaijan,” the statement said.
The ACG, or Azeri-Chirag-Guneshli, field is located off the coast of Baku and is said to be the largest oilfield in the Azerbaijan sector of the Caspian basin. OVL had earlier bought a 2.7 per cent stake in the field from US-based Hess for $1 billion.
“Based on the performance of this agreement, both parties will mutually agree to optimise price realisation of other crudes from OVL’s portfolio either through joint marketing or joint venture route,” OVL said. The agreement was signed by S P Garg, director (finance) at OVL, and Arzu Azimov, chief executive of SOCAR.
OVL operates 36 projects in 17 countries including Azerbaijan, Bangladesh, Brazil, Colombia, Iraq, Kazakhstan, Libya, Mozambique, Myanmar, Russia, South Sudan, Sudan, Syria, Venezuela, Vietnam and New Zealand. It currently produces 165,000 barrels of oil and oil equivalent gas per day and had total oil & gas reserves of 633 million tonnes of oil equivalent as on March 31.
SOCAR Trading is the international marketing and development arm of the State Oil Company of Azerbaijan Republic (SOCAR). It was incorporated in December 2007 with a mandate to market Azeri barrels produced from the ACG field and other surrounding fields in the country.