To begin with, OVL's share of oil from the Azeri, Chirag and Guneshli (ACG) group of fields in Azerbaijan will be traded through the new venture.

BP-operated Azeri-Chirag-Deepwater Guneshli (ACG) field is located about 100 km east of Baku and is the largest oilfield in the Azerbaijan sector of the Caspian basin.

It produced an average 634,000 barrels per day (31.3 million tonnes in total) oil in 2015. OVL has 2.72 per cent stake in the field which it had bought from US energy firm Hess for about USD 1 billion.

The memorandum of understanding (MoU) was signed on May 27 at Geneva, the company said in a statement.

"The objective of the MoU is to explore possibilities of joint marketing of OVL's crude oil portfolio by leveraging SOCAR Trading's experience in oil trading," it said.

The MoU was signed by S P Garg, Director (Finance), OVL and Arzu Azimov, CEO, SOCAR/

Initially, both parties agreed to initiate discussion on Joint Marketing Agreement in respect of OVL's equity crude from ACG, Azerbaijan.

"Based on the performance of this agreement both parties will mutually agree to optimise price realisation of other crudes from OVL's portfolio either through joint marketing or joint venture route," it said.

OVL has 36 projects in 17 countries including Azerbaijan, Bangladesh, Brazil, Colombia, Iraq, Kazakhstan, Libya, Mozambique, Myanmar, Russia, South Sudan, Sudan, Syria, Venezuela, Vietnam and New Zealand.

It currently produces 165,000 barrels of oil and oil equivalent gas per day and has a total oil and gas reserves of about 632.65 million tons of oil equivalent as on March 31.

SOCAR Trading is the international marketing and development arm of SOCAR, the State Oil Company of Azerbaijan. SOCAR Trading was incorporated in December 2007 with a mandate to market Azeri barrels produced from the ACG field and other surrounding fields in Azerbaijan.