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MOL Buys Stakes in Azeri Oil Field and Pipeline

D&T
November 4, 2019

MOL today signed an agreement with Chevron Global Ventures and Chevron BTC Pipeline to acquire their non-operated exploration and production as well as mid-stream interests in Azerbaijan for USD 1.57 billion (subject to adjustments at closing), the Budapest-based company said in a press release. The deal includes a 9.57% stake in the Azeri-Chirag-Gunashli (“ACG”) oil field and an effective 8.9% stake in the Baku-Tbilisi-Ceyhan (“BTC”) pipeline that transports the crude to the Mediterranean port of Ceyhan. Once completed, the transaction will make MOL the third largest field partner in ACG. The giant ACG field is located in the Caspian Sea and is one of the largest offshore oil fields in the world which started production in 1997. Operated by BP and encompassing six offshore production platforms, ACG produced an average 584,000 barrels per day in 2018. The operator estimates total gross recoverable reserves to be  approximately 3 billion bbl of oil, following the license extension until 2049. This world-class asset with an exceptional production track record over the past two decades will add around 20 mboepd to MOL Group’s net production in the coming years, according to the announcement. MOL will finance the transaction from available liquidity and the deal will have no impact on MOL’s ambition to continue to increase base dividends in the coming years. The transaction is subject to government and regulatory approvals and is expected to close in the second quarter of 2020. ”Following the closing of the deal, around half of our production will come from outside the CEE region, giving us a healthy balance. With these new barrels we are also strengthening our resilient, integrated business model, which will continue to generate robust cash flow to finance the MOL 2030 transformation projects as well as rising dividends to our shareholders,” commented Zsolt Hernádi, MOL Group’s Chairman and CEO.

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