ONGC Videsh Ltd will acquire Hess Corporation’s 2.72 per cent stake in the Azeri, Chirag and Guneshli (ACG) oil and gas fields in Azerbaijan.

The acquisition marks OVL’s entry into oil-rich Azerbaijan.

According to an OVL statement, the definitive agreements for the acquisition of Hess Corporation’s participating interest in oil fields in the Azerbaijan part of the Caspian Sea and 2.36 per cent interest in the Baku-Tbilisi-Ceyhan Pipeline (BTC) is for $1 billion (Rs 5,535 crore).

“The acquisition is subject to relevant Government and regulatory approvals and is expected to close by the first quarter of 2013,” the company said.

ACG, which is located in the South Caspian Sea about 95 km off the coast of Azerbaijan, is the largest oil and gas field complex in Azerbaijan and is one of the largest producing oil fields in the world.

BP operates ACG and is partnered by State Oil Company of Azerbaijan Republic (SOCAR), Chevron, Statoil, ExxonMobil, Inpex, Turkish NOC -TPAO and Itochu.

The average production from the field is around 7,00,000 barrels of oil a day.

The potential recovery from the field is estimated at over five billion barrels.

The 1,768-km BTC Pipeline is one of the main export routes for Caspian crude oil production with a capacity of around one million barrels of oil a day to the Ceyhan terminal in the Mediterranean Sea in South-East Turkey.

This acquisition would bring nine per cent additional proven reserves to OVL’s portfolio, the company said.