ONGC acquires Hess' interest in ACG, Azerbaijan, for US$1 billion
ONGC has agreed to buy Hess' 2.72% stake in the Azeri-Chirag-Guneshli oil project (ACG) in the Azeri sector of the Caspian Sea, and its 2.36% interest in the associated Baku-Tbilisi-Ceyhan (BTC) pipeline, for a total of US$1 billion. We value the interests at US$912 million (NPV10, discounted to 1 September 2012). Our base modelling generates an Implied Long-term Oil Price of U$98/bbl (NPV10); well above the current market average. However, upside exists in the potential ...