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Exclusive: Exxon, Chevron seek to exit Azerbaijan's oil after 25 years

Reuters  |  LONDON 

By and Ron Bousso

LONDON (Reuters) - and are seeking to sell their stakes in Azerbaijan's largest oilfield, marking the retreat of the U.S. majors from the former Soviet state after 25 years as they re-focus on domestic production.

Exxon is hoping to raise up to $2 billion from the sale of its 6.8 percent in the Azeri-Chirag-Gunashli (ACG) field in the Caspian Sea, according to industry sources.

Rival said in a statement to it had also decided to launch the sale of its 9.57 percent stake in as well as its 8.9 percent interest in the Baku-Tbilisi-(BTC) pipeline.

Exxon declined to comment, saying"we don't comment on market rumours or speculation". A for Azerbaijan's company said: "The report is about Exxon and there is no need for to get involved."

For both companies, the sale would mark the end of a 25-year involvement. Exxon and were among five U.S. companies that helped create Azerbaijan's current industry soon after the collapse of the Soviet Union, and acquiring a stake in in 1994.

The deal was dubbed by and partners as the "the contract of the century" thanks to the field's large reserves and hopes of future major discoveries that would help diversify away from Russian and gas.

Even though the project is operated by British oil major BP, it had received substantial support and a total of five American companies initially participated in the deal, including Exxon, Amoco, Unocal, and McDermott.

said it had no information about Exxon's or Chevron's plans.

The project received particular Western support due to hopes it would help cut Europe's reliance on Russian energy, but those hopes faded as new large discoveries failed to materialise.

Most U.S. companies sold out of the project or were acquired by rivals, while U.S. support to the also shrank.

also became more assertive in controlling its wealth by building up large stakes in its projects via state company

Other than Exxon and Chevron, holds a 30.4 percent stake in ACG and Socar a 25 percent stake.

The ACG fields still account for the lion's share of Azeri They produced around three quarters of overallAzeri crude output, or nearly 600,000 barrels per day, in the first half of 2018.

Other ACG consortium members include Japan's with 9.3 percent and Norway's with 7.3 percent. Turkey's TPAO, Japan's Itochu, and India's have smaller stakes.

Exxon and Chevron have in recent years increasingly focused on developing shale fields in the Exxon is also set to invest billions in developing a string of in Guyana, while Chevron is developing the extension of the giant field in Kazakhstan, estimated to cost $37 billion.

The transports the majority of ACG production from through to the port of Ceyhan,

(Additional reporting by Margarita Antidze; Writing by Ron and Dmitry Zhdannikov; Editing by and David Evans)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, December 04 2018. 23:11 IST