ONGC Videsh expands global energy footprint with Azerbaijan acquisitions

ONGC Videsh Limited has made a significant move to strengthen its energy security strategy by completing acquisitions in Azerbaijan. On 29 November 2024, the company announced its latest investments, including a 0.615% stake in the Azeri-Chirag-Gunashli field and a 0.737% share in the Baku-Tbilisi-Ceyhan pipeline. This acquisition, valued at approximately USD 60 million, enhances ONGC Videsh’s profile in the global energy market.

The Azeri-Chirag-Gunashli field, located offshore in the Caspian Sea, is one of the world’s largest oil fields. Operated by BP since 1999, the field has undergone phased developments, including the addition of a new production platform, Azeri Central East, in early 2024. The Baku-Tbilisi-Ceyhan pipeline, a crucial infrastructure asset, transports oil across Azerbaijan, Georgia, and Türkiye, ensuring access to international markets.

ONGC’s energy security strategy

This latest acquisition bolsters ONGC Videsh’s long-term commitment to energy security by expanding its stakes in high-performing assets. Already holding a 2.31% interest in the Azeri-Chirag-Gunashli field and a 2.36% share in the Baku-Tbilisi-Ceyhan pipeline, the company’s expanded ownership reflects its dedication to securing strategic international partnerships.

With its diversified asset portfolio spanning 32 projects in 15 countries, ONGC Videsh plays a critical role in the oil and gas sector. In FY 2024, the company produced 10.518 million metric tonnes of oil and oil-equivalent gas (MMtoe) and currently delivers approximately 200,000 barrels daily.

Strengthening India’s global energy market presence

This acquisition has broader implications for India’s role in the global energy market. It aligns with ONGC Videsh’s mission of securing stable supplies through investments in lucrative regions like the Caspian Sea. The move also reduces dependence on oil imports from more volatile areas.

The parent company, ONGC, further strengthens this position with its 2P reserves of 704 MMtoe and a robust market capitalisation of INR 3,22,999 crores as of November 2024. Both ONGC and its subsidiary are key players in driving India’s energy security strategy forward.

Expert perspective on energy dynamics

Industry analysts note that the Baku-Tbilisi-Ceyhan pipeline is critical for ensuring uninterrupted crude oil flows to European and global markets. Additionally, the expansion of ONGC Videsh’s footprint in the Azeri-Chirag-Gunashli field underscores the importance of acquiring equity in stable, high-quality reserves to meet India’s growing energy needs.