Azerbaijan, Baku, April 2 / Trend A.Badalova /
India's ONGC Videsh Ltd., which is a 100% subsidiary of Oil and Natural Gas Corporation Limited (ONGC), aims to raise up to $1 billion via a dollar bond by April-end to fund a stake acquisition in Azerbaijan, the Wall Street Journal reported with the reference to ONGC Videsh statement.
On Monday, ONGC Videsh announced the completion of acquisition of Hess Corporation's 2.7213% participating interest in the development project of Azeri Chirag Guneshli (ACG) oil fields in the Azerbaijan sector of the Caspian Sea and 2.36% interest in the Baku-Tbilisi-Ceyhan Pipeline ("BTC").
The transaction value is $1 billion, the report stated. The company expects to complete the transaction in the first quarter of 2013.
In early September 2012, ONGC Videsh and Hess entered into the definitive agreements, and subsequently all relevant government and regulatory approvals were received.
According to the Managing Director Dinesh K. Sarraf, it now makes sense to raise cheaper debt through overseas bond issuance. He said that all of ONGC Videsh's assets and liabilities are denominated in dollars, making cheaper refinancing easier.
Earlier, Reuters reported with the reference to the sources with direct knowledge of the deal that ONGC Videsh has hired Deutsche Bank, Citigroup and RBS for the fund raising.
According to the ONGC Videsh report, the stakes in the projects in Azerbaijan is the first acquisition of a producing property made by ONGC Videsh in the Caspian Region and is consistent with its strategic objective of adding high quality international assets to its existing E&P portfolio. It also bears significant strategic importance to India.
Production at Azeri-Chirag-Guneshli oil field, located about 100 kilometers east of Baku in the Caspian Sea, was launched in 1997.
The shares in the contract, excluding the share of Hess, are distributed as follows: BP (operator of Azeri-Chirag-Guneshli) - 35.83 per cent, Chevron - 11,27 per cent, Inpex - 10,96 per cent, AzACG - 11 6 per cent, Statoil - 8,56 per cent, Exxon - 8 per cent, TPAO - 6.75 per cent and Itocu - 4,3 per cent.