London — Chevron is to sell its stakes in Azerbaijan's ACG oil complex and the BTC export pipeline to Hungary's MOL for $1.57 billion, MOL said Monday.
Chevron said last December it was looking to sell its 9.57% stake in the Azeri-Chirag-Gunashli field and its 8.9% stake in the Baku-Tbilisi-Ceyhan pipeline, which runs from the Caspian coast to Turkey's Mediterranean coast.
ExxonMobil has also been looking to sell its slightly smaller stakes in the same assets, both of which are operated by BP, as the US majors pare back non-core assets.
In a statement, MOL said the purchase would strengthen its position in the Commonwealth of Independent States and would mean half the company's upstream production would come from outside Central and Eastern Europe.
It noted the ACG field, with around 3 billion barrels of reserves, had produced 584,000 b/d of crude oil last year, only a slight decline on the previous year, and the license had been extended to 2049 under a deal agreed in 2017.
It described the field as a "low-cost producing asset, which would be breaking even in a lower-oil price environment, with limited investment needs."
The deal, which will have an effective date of January 1, 2019 and should be completed in the second quarter next year, "is a significant milestone in building our international Exploration & Production portfolio, in one of our core regions, the CIS, where we will team up with world-class partners," MOL chairman and CEO Zsolt Hernadi said.
Azerbaijan's oil production is seen as broadly in decline, but has been supported by continued investment at the ACG complex, including a $6-billion investment in new facilities announced in April.
The 1,800-km (1,116-mile) BTC pipeline through the Caucasus mountains, regarded as an engineering feat when it began operating in 2006, is under-utilized as it has not been much used for transporting crude from other countries in the region, including Kazakhstan, where Chevron is the largest investor. Crude from the Chevron-led Tengiz project in Kazakhstan is almost entirely exported as CPC blend through the CPC pipeline across southern Russia to the Black Sea port of Novorossiisk.
Chevron announced Friday a 25% cost increase in an expansion project at Tengiz intended to lift output to around 900,000 b/d, as well as a delay of about a year to the project.
--Nick Coleman, firstname.lastname@example.org
--Edited by Jonathan Dart, email@example.com