ONGC Videsh, India's largest international oil and gas exploration and production (E&P) company, has signed an important deal along with global partners to explore and develop Non-Associated Gas (NAG) reservoirs in the Azeri-Chirag-Deepwater Gunashli (ACG) field, located in the Azerbaijan sector of the Caspian Sea. The agreement, signed on Azerbaijan’s national Oil Workers’ Day and coinciding with the 30th anniversary of the original Production Sharing Agreement (PSA) for the ACG field, marks a significant step forward in tapping into the vast natural gas resources of the region.

This new agreement, which is an addendum to the existing ACG PSA, enables ONGC Videsh and its partners, including bp, SOCAR, MOL, INPEX, Equinor, ExxonMobil, TPAO, and ITOCHU, to explore and develop the NAG reservoirs, which were not initially included in the original PSA. The ACG co-venturers will work together to explore up to 4 trillion cubic feet (tcf) of natural gas, which is believed to be present within the NAG reservoirs. The development of these reservoirs is set to continue until the expiry of the existing PSA in 2049, securing long-term gas production.

The ACG field has been producing oil for decades, and the discovery of significant gas resources adds a new dimension to the region's energy potential. The NAG reservoirs, located both beneath and above the oil reservoirs currently being produced, were confirmed as viable following the completion of a data well drilled by SOCAR and the ACG co-venturers in 2023. The data well provided vital information on the pressure and presence of natural gas, leading to the decision to proceed with the next phase of development.

bp, the operator of the ACG PSA, will continue in this role, overseeing the development of the NAG reservoirs alongside its partners. The participating interests for the NAG project mirror those in the existing PSA: bp (30.37%), SOCAR (25%), MOL (9.57%), INPEX (9.31%), Equinor (7.27%), ExxonMobil (6.79%), TPAO (5.73%), ITOCHU (3.65%), and ONGC Videsh (2.31%). Together, they will focus on initial exploration and production, with the first gas expected in 2025 from two priority reservoirs.

This agreement further solidifies ONGC Videsh’s presence in the global energy sector. Since acquiring its Participating Interest (PI) in the ACG project in 2013, ONGC Videsh has contributed to the oil production from the field. The company’s total production during FY’24 amounted to 10.518 MMtoe, and it currently produces about 200,000 barrels of Oil and Oil Equivalent Gas (O+OEG) per day. This new NAG project will allow ONGC Videsh to further diversify its production portfolio and increase its role in the natural gas market.

The signing of this NAG addendum is a momentous occasion for Azerbaijan as well, as it coincides with the 30th anniversary of the ACG PSA—a landmark deal that has helped shape the country's oil and gas industry. This celebration took place in Baku, the capital of Azerbaijan, and was attended by representatives of all the co-venturers, as well as government officials. The development of these gas resources is expected to contribute significantly to Azerbaijan's economy and bolster its position as a key player in the Caspian Sea’s energy sector.

This landmark NAG deal is expected to make a substantial impact not only on Azerbaijan's energy landscape but also on the global natural gas market. With first gas expected by 2025, the ACG co-venturers, including ONGC Videsh, are poised to make significant contributions to meeting the world’s growing demand for natural gas.

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