Hungary Mol signs landmark contract in Azerbaijan
The commercial agreements will complement ACG's existing production sharing contract, allowing the partners to explore, appraise, develop and produce the ACG field's gas reserves. The gas reserves in the ACG are estimated to be significant, with volumes of up to 4,000 billion cubic feet (approximately 112 billion m³). Drilling of the first producing well from the West Chirag platform has already started and gas production is expected to start by 2025. The role of the well is important as it will allow gas reserves to be assessed through production, which will help inform future development plans.
The signing ceremony took place in Baku on the 30th anniversary of the ACG Agreement (ACG PSA) signed in 1994. In addition, Zsolt Hernádi, Chairman and CEO of Mol, and Rovshan Najaf, President of SOCAR, signed a Memorandum of Understanding in Baku to explore further cooperation opportunities in hydrocarbon exploration in the Shamakhi-Gobustan region. Under the agreement, Mol has expressed its intention to contribute its experience, technical and commercial knowledge and financial resources to the further development of Azerbaijan's hydrocarbon exploration.
“Today is an important milestone for MOL Group as after years of developing and producing oil fields in Azerbaijan, we extend our footprint by entering into gas reservoir development. This is thanks to theoutstanding cooperation with SOCAR and the partners of the ACG project,” said Zsolt Hernádi.
“This is also a great day for the economic cooperation between Azerbaijan and Hungary and thanks to the excellent governmental relations between our countries, we have been able to further deepen our business cooperation. ACG is our crown jewel as it is the largest international contributor to our hydrocarbon production. Also, MOL’s participation in the project is the flagship economic connection of the two countries. Moreover, ACG also plays a key role in the security of energy supply of Central Europe. The production of the field gives us crude oil sourcing flexibility for our refineries both in Slovakia and Croatia so the whole region benefits from this partnership. In light of this, I am very honored to sign an additional memorandum of understanding with our valued partner, SOCAR. It clearly shows that this partnership has great future and I am looking forward to further exploration successes in Azerbaijan onshore in addition to the ongoing offshore ACGdevelopment. We are very much open to go beyond and leverage this even further.” - he added.
MOL Group’s 9.57% stake in ACG and its 8.9% stake in the Baku-Tbilisi-Ceyhan pipeline remain unchanged.
Cover photo: Ákos Stiller/Bloomberg via Getty Images
