MOL signs agreement in Azerbaijan to develop gas reserves of ACG field
Budapest-based MOL Group and its joint venture (jv) partners signed commercial agreements for the development of gas reserves in Azerbaijan. After the State Oil Company of the Republic of Azerbaijan (Socar) and UK’s BP, MOL is the third largest shareholder in the giant ACG field, where non-associated gas reservoirs were identified beneath and above the producing oil reservoirs. The partners have now agreed on the development and commercial exploitation of these reserves.
MOL has also signed a Memorandum of Understanding with Socar to evaluate further potential cooperation opportunities in the area of hydrocarbon exploration in Azerbaijan.
MOL is the third largest shareholder in the giant Azeri-Chirag-Deepwater Gunashli (ACG) field, where non-associated gas (NAG) reservoirs were identified beneath and above the oil producing reservoirs.
The commercial agreements amend the existing ACG production sharing agreement (PSA) framework, enabling the parties to progress the exploration, appraisal, development of and production from the gas reservoirs of the ACG field. ACG non-associated gas resources are believed to be significant, with up to 112 billion cu m in place.
Drilling of the initial producing well has already started from the West Chirag Platform, with first gas expected in 2025. The well is important as it will deliver appraisal through production which is expected to underpin future development plans.
The signing ceremony was held in Baku on the 30th anniversary of the signing of the ACG Production Sharing Agreement in 1994.
In addition, MOL Group Chairman/CEO Zsolt Hernádi and Socar CEO Rovshan Najaf signed a MoU in Baku to evaluate potential exploration opportunities in the Shamakhi-Gobustan region.
MOL Group entered Azerbaijan in 2020 by acquiring a 9.57% stake in the Azeri-Chirag-Gunashli (ACG), one of the world’s largest oil fields, and an effective 8.9% stake in the Baku-Tbilisi-Ceyhan (BTC) pipeline that transports the crude to the Mediterranean port of Ceyhan. This share represents 15% of MOL’s total production and 25% of total reserves as of 2023. The BTC pipeline plays an important role in MOL’s supply of oil to MOL Group’s refineries in Central and Eastern Europe, including Slovnaft’s Bratislava and INA’s Rijeka Refinery.
The Azeri asset gives MOL the flexibility to decide whether to sell the share of the oil produced at ACG in Ceyhan port to third parties, or to use it within MOL Group in its CEE core region to contribute to the European energy supply security and to improve the company’s crude sourcing flexibility.
