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Hess to Sell Azerbaijan Assets for $1 Billion

Hess Corporation has agreed to sell some minority field stakes in Azerbaijan to India's Oil & Natural Gas Corporation for $1 billion, as the oil-and-gas producer works to sell off small holdings in mature assets.

"Including this transaction, we have announced asset sales year-to-date totaling nearly $2 billion and additional asset sales are under way as part of our strategic portfolio reshaping," said Greg Hill, president of worldwide exploration and production for Hess.

Hess, which is based in New York, plans to sell its 2.7 percent interest in the Azeri, Chirag and Guneshli fields in Azerbaijan and its 2.4 percent interest in the associated BTC pipeline to ONGC Videsh Ltd., the overseas investment arm of state-run Oil & Natural Gas Corporation.

The transaction is expected to close in the first quarter of 2013 and is still subject to Indian and other government and regulatory approvals.

The fields, located in the Caspian Sea east of Baku, started production in 1997 and are operated by BP PLC.

Hess has increased spending in recent years in order to fund an ambitious exploration program and the development of shale gas properties it acquired across the U.S. Hess has also been aiming to reduce its exposure to risky exploration programs following a string of dry holes.

In July, Hess said its second quarter earnings fell as the company's exploration and production segment reported a decline in profit amid lower average oil selling prices.

Source: The Wall Street Journal

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