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Equinor sells its interests in Azerbaijan

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The Deepwater Gunashli platform in the Caspian Sea.
The Deepwater Gunashli platform in the Caspian Sea.
(Photo: bp)

Equinor and SOCAR (State Oil Company of Azerbaijan Republic) have signed an agreement whereby Equinor will divest all its remaining assets in Azerbaijan to SOCAR.

Updated 29 November 2024

On 29 November 2024 the transaction under the amended and restated Sales and Purchase Agreement for Azeri Chirag Gunashli (ACG) and Baku-Tbilisi-Ceyhan (BTC) was completed.

This includes the sales of Equinor’s total shares of 7.27% in ACG with 6.655% to SOCAR (State Oil Company of Azerbaijan) and 0.615% to ONGC, and sales of Equinor’s total shares of 8.71% in BTC with 7.96% to SOCAR and 0.75% to ONGC. The total consideration for the transaction is about 720 MUSD.

Update 23 July 2024:

The agreements with SOCAR for divestment of Equinor’s portfolio in Azerbaijan were signed 22 December 2023. Following the announcement, ONGC Videsh Limited (ONGC) elected to exercise their pre-emption right in accordance with the ACG Joint Operating Agreement.

An amended and restated Sales and Purchase Agreement for Azeri Chirag Gunashli (ACG) and Baku-Tbilisi-Ceyhan (BTC) were signed on 19 July with the sales of Equinor’s total shares of 7.27% in ACG with 6.655% to SOCAR (State Oil Company of Azerbaijan) and 0.615% to ONGC, and sales of Equinor’s total shares of 8.71% in BTC with 7.96% to SOCAR and 0.75% to ONGC.

Agreement with SOCAR for sales of 50% in Karabagh was completed on 24 April 2024.

The assets comprise a 7.27% non-operated interest in the Azeri Chirag Gunashli (ACG) oil fields in the Azerbaijan sector of the Caspian Sea, 8.71% interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline and 50% in the Karabagh field. SOCAR already holds a 25.0% stake in ACG, a 25.0% stake in BTC via Azerbaijan BTC Limited, and 50% in Karabagh.

Equinor has been present in Azerbaijan since 1992. ACG, operated by bp, is the largest oilfield in the Azerbaijan sector of the Caspian basin and the BTC pipeline is used to transfer crude oil to the Turkish Mediterranean coast.

Philippe Mathieu (left) and Rovshan Najaf
Philippe Mathieu, Equinor's executive vice president for international exploration and production, and Rovshan Najaf, SOCAR President.
(Photo: SOCAR)

“Azerbaijan has been an important part of Equinor’s international portfolio over the past 30 years. Together with SOCAR and the other partners in ACG, we have created significant value for the partnership and for the Azerbaijani society. SOCAR is well positioned to create further value from the assets for the longer-term and we have appreciated the close collaboration over the years,” says Philippe Mathieu, Equinor's executive vice president for international exploration and production.

“Equinor is in the process of re-shaping its international oil and gas business, and the divestments in Azerbaijan are in line with our strategy to focus our international portfolio,” says Philippe Mathieu.

The closing of the transaction is subject to the satisfaction of certain conditions including all regulatory and contractual approvals.

Equinor and SOCAR also signed a memorandum of understanding (MoU) to share experience and best practice on low carbon solutions, reducing greenhouse gas emissions and carbon management.

Facts

  • Since 1994, SOCAR and Equinor have been cooperating in important joint projects, including the ACG oil field operated by BP.
  • The ACG is located around 100 kilometres east of Baku in water depths ranging from 125-180 meters. Estimated total recoverable over the period 2018-2049 are around 3 billion barrels of oil.
  • ACG crude oil is sent via the Baku-Tbilisi-Ceyhan (BTC) pipeline, which carries oil from the Sangachal terminal near Baku to the Ceyhan marine terminal on the Turkish Mediterranean coast.
  • The Karabagh oilfield is located 120 kilometers east of Baku, in around 180 meters water depth. On 19 March 2020, SOCAR and Equinor confirmed discovery of Karabagh oil field in Azerbaijan.

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