Hungarian oil and gas company MOL Group has finalized commercial agreements with its joint venture partners for the extraction of natural gas reserves in Azerbaijan. Alongside Azerbaijani SOCAR and British BP, the project operator, MOL Group has become the third-largest stakeholder in the giant Azeri–Chirag–Deepwater Gunashli (ACG) field in Azerbaijan, where natural gas layers have been identified both above and below the oil-bearing strata.
According to MOL Group’s announcement, the commercial agreements will complement ACG’s existing production sharing agreement (PSA), enabling the partners to explore, appraise, develop, and produce the gas reserves in the ACG field. The gas reserves in the ACG are estimated to be substantial, with volumes of up to 4.000 billion cubic feet (approximately 112 billion cubic metres).
The drilling of the first production well from the West Chirag platform has already commenced, with gas production expected to begin in 2025. This well plays a crucial role, as it will allow for the assessment of gas reserves through production, providing valuable insights to guide future development plans.
‘The gas reserves in the ACG are estimated to be substantial, with volumes of up to 4.000 billion cubic feet’
The signing ceremony took place in Baku, coinciding with the 30th anniversary of the ACG Agreement (ACG PSA) originally signed in 1994. In addition, CEO of MOL Group Zsolt Hernádi and President of SOCAR Rovshan Najaf signed a Memorandum of Understanding in Baku to explore further cooperation opportunities in hydrocarbon exploration in the Shamakhi–Gobustan region. Under the agreement, MOL Group expressed its intention to contribute its experience, technical and commercial expertise, and financial resources to the continued development of hydrocarbon exploration in Azerbaijan.
‘Today marks an important milestone for MOL Group: after years of developing and producing oil fields, we are now expanding our activities in Azerbaijan to include the production of natural gas reserves, thanks to the excellent cooperation with SOCAR and other ACG partners,’ Zsolt Hernádi highlighted.
MOL Group entered Azerbaijan in 2020 with a 9.57 per cent stake in the ACG field, one of the world’s largest oil fields, and an 8.9 per cent stake in the Baku–Tbilisi–Ceyhan (BTC) pipeline, which transports crude oil to the Mediterranean port of Ceyhan. In 2023, this stake accounted for 15 per cent of MOL Group’s total production and 25 per cent of its total hydrocarbon reserves. The BTC pipeline also plays a key role in supplying MOL Group’s refineries in Central and Eastern Europe, including the Slovnaft refinery in Bratislava and the INA refinery in Rijeka.
In a statement, MOL Group highlighted that its stake in Azerbaijan provides the flexibility to either sell its share of ACG crude oil produced at the port of Ceyhan to third parties or use it within the MOL Group in Central and Eastern Europe. This approach aims to contribute to Europe’s energy security while enhancing the company’s oil procurement flexibility.
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