OVL "signed definitive agreements for the acquisition of Hess Corp's 2.7213 per cent participating interest in the Azeri, Chirag and the deepwater portion of Guneshli fields in the Azerbaijan sector of the Caspian Sea and 2.36 per cent interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline for USD 1 billion," the company said in a statement here.
The acquisition is subject to relevant government and regulatory approvals and is expected to close by the first quarter of 2013.
The buyout marks OVL's entry into oil rich Azerbaijan.
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 one of the largest producing oil fields in the world.
UK's BP Plc operated field produces around 700,000 barrels a day (35 million tons per annum) of crude oil. This is more than India's annual oil production.
OVL's share of output would be over 19,000 bpd or a little less than one million tonnes per annum.
"The acquisition would bring 9 per cent additional proved reserves to OVL (the overseas arm of state-owned Oil and Natural Gas Corp, or ONGC) portfolio," the statement said.
While the AGC field has total reserves of over 6.5 billion barrels, the 1,768-km BTC pipeline is one of the main export routes for Caspian crude oil production to the Ceyhan terminal in the Mediterranean Sea in south east Turkey, with a capacity of around 1.0 million bpd.