Oil & Natural Gas Corporation Ltd.

The Cabinet Committee on Economic Affairs (CCEA) is likely to consider today, i.e., January 31, 2013, granting approval to ONGC’s overseas investment arm ONGC Videsh’s (OVL) $1 billion acquisition of a stake in an Azerbaijan oilfield.

Back in September, OVL had signed definitive agreements for the acquisition of Hess Corporation’s 2.72% participating interest in the Azeri, Chirag and the Deep Water Portion of Guneshli Fields in the Azerbaijan sector of the Caspian Sea (ACG) and 2.36% interest in the Baku-Tbilisi-Ceyhan Pipeline (BTC), for $1 billion. However, the approval was then subject to government and regulatory approvals and is expected to close by the first quarter of 2013.

Further, the deal on getting approval would mark OVL's entry into oil rich Azerbaijan. ACG, which is located in the south Caspian Sea about 95 km off the coast of Azerbaijan, is the largest oil and gas field complex in Azerbaijan and is one of the largest producing oil fields in the world. BP operates ACG and is partnered by State Oil Company of Azerbaijan Republic (SOCAR), Chevron, Statoil, ExxonMobil, Inpex, Turkish NOC - TPAO and Itochu. Average daily production from the field is around 700,000 bopd of crude oil.