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Exxon & Chevron to dump Azeri oil project meant to save Europe from Russian energy reliance – report

The US companies, who were at the onset of singing the so-called “contract of the century” with the former Soviet Republic, are now willing to leave the Azeri-Chirag-Guneshli (ACG) oil field after almost a quarter of a century of presence in the area.

Exxon seeks to raise up to $2 billion from the sale of its 6.8 percent in the field on the Caspian seabed, according to Reuters citing industry sources. Meanwhile, Chevron, which owns some 9.57 percent stake in ACG, is also going to sell its stake. Additionally, Chevron is considering offloading its 8.9% interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline, the company’s statement to the agency read.

Both Exxon and Azerbaijan’s state energy company Socar were reluctant to comment on the report, with Exxon spokeswoman Julie King labeling it “market rumors or speculation.”

Exxon Mobil was among five American firms of 11 foreign oil companies from the UK, the US, Russia, Norway, Turkey, and Saudi Arabia to sign on to develop the ex-Soviet state’s biggest oilfield in 1994. The same year Chevron began operating in the Central Asian country when it bought an interest in the Azerbaijan International Operating Company (AIOC), which produces and develops offshore crude oil reserves from the ACG project.

The landmark deal was considered a game changer for the energy map of Europe as it was believed it would help lessen the continent's reliance on Russian energy. It became “the first major investment by Western multinational companies in any country of the former Soviet Union,” according to BP, who is the current operator of the oilfield under the newly extended agreement signed last year with Baku. The old contract was to expire in 2024, and the new one extends to the end of 2049.

American companies' possible selloff of their stakes comes amid Washington’s constant criticism of Russia’s energy projects with Europe, including the Nord Stream pipeline. US President Donald Trump lambasted Germany in particular for its alleged dependency on natural gas from Russia and accused Berlin of being a “captive” of Moscow.

The statement immediately was rebuked by German Chancellor Angela Merkel. German Foreign Minister Heiko Maas stressed that Berlin will proceed with the project despite pressure to quit after the recent naval standoff between Moscow and Kiev.