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Hungary's MOL buys Chevron's key Azeri assets for $1.57bn

BUDAPEST, November 4, 2019

Hungary-based oil and gas company MOL has signed an agreement with Chevron Global Ventures and Chevron BTC Pipeline to acquire their non-operated E&P and mid-stream interests in Azerbaijan, including a 9.57% stake in the Azeri-Chirag-Gunashli (ACG) oilfield, and an effective 8.9% stake in the Baku-Tbilisi-Ceyhan (BTC) pipeline that transports the crude to the Mediterranean port of Ceyhan, for total consideration of $1.57 billion. 
 
Once completed, this transaction will make MOL the third largest field partner in ACG. 
 
The supergiant ACG field is Azerbaijan’s flagship oil producing asset covering 400 sq km and including six off-shore production platforms. 
 
It has been producing oil since 1997 and has an excellent 20 year-long operational track record. The country’s largest oil field is operated by the oil giant BP and produced on average 584,000 barrel per day in 2018. 
 
As  per the deal, MOL Group will team up with world-class partners such as BP, Exxon, Equinor and Socar in this key strategic asset. MOL also acquires a stake in the BTC pipeline transporting crude oil from Azerbaijan to the port of Ceyhan, Turkey, on the Mediterranean Sea. 
 
This world-class asset will add around 20,000 barrel per day net to MOL’s production in the coming years and will also increase MOL’s proved and probable reserves materially, said a statement from the Hungarian company.  
 
The new assets will immediately start contributing ebitda and free-cash flow to the group after completion. 
 
ACG is a low-cost producing asset, with excellent production track record over the last two decades, which would be breaking even in a much lower-oil price environment.  
 
This transaction is an excellent fit to MOL’s current portfolio and the transaction contributes to the further transformation of its upstream segment into an international business by developing the company’s footprint in its core CIS region, said a top official. 
 
"The deal is in line with the transformation targets laid down in the 2030 strategy and it further strengthens MOL Group’s Upstream and Downstream integrated and resilient business model," remarked its Chairman and CEO Zsolt Hernádi.   
 
"Following the closing of the deal, around half of our production will come from outside the CEE region, giving us a healthy balance. With these new barrels we are also strengthening our resilient, integrated business model, which will continue to generate robust cash flow to finance the MOL 2030 transformational projects as well as rising dividends to our shareholders," he added.-TradeArabia News Service



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