Indian ONGC Videsh (OVL), the overseas arm of the state-run explorer Oil and Natural Gas Corporation (ONGC), signed a Memorandum of Understanding (MoU) with SOCAR Trading, the trading arm of Azerbaijan’s government-owned energy firm SOCAR, for foraying into oil trading business, Business Standard reported.

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, OVL. “Initially, both the parties agreed to initiate discussion on joint marketing agreement in respect of OVL’s equity crude from ACG, Azerbaijan,” a statement said.

“At a later stage, OVL will look at opportunities to market its oil from other assets through the planned trading company with SOCAR,” a source cited by CNBC added.

The Azeri-Chirag-Guneshli (ACG) field is located off the coast of Baku and is said to be the largest oilfield in the Azerbaijan sector of the Caspian basin. OVL had earlier bought a 2.7% stake in the field from US-based Hess for $1b.