It's finally happening. Chevron (CVX 2.28%) is selling off its investment in the oil-rich former Soviet Union nation of Azerbaijan -- and its exit couldn't come at a better time for this energy giant.

Across the country and around the world, oil prices are plummeting. As of today, a barrel of West Texas Intermediate crude oil costs just 30% of what it fetched less than a year ago. International benchmark Brent crude prices are off a nearly as precipitous 62%. Oil companies are pressed for cash flow, and barreling (sorry -- I couldn't resist) into a recession while carrying high piles of debt.

Oil rig superimposed on three descending red arrows

Image source: Getty Images.

How high Chevron's debt load has gotten is something we'll only find out next month, when Chevron files its quarterly earnings report on May 1. What is certain, however, is that the situation won't be as dire as it might have been.

This is thanks to a deal that Chevron struck back in November 2019, when it agreed to sell its 9.6% "non-operating interest" in Azerbaijan's Azeri-Chirag-Deepwater Gunashli (ACG) oil fields and its 8.9% non-operating interest in the Baku-Tbilisi-Ceyhan (BTC) oil pipeline as well, to MOL Hungarian Oil and Gas PLC for $1.57 billion.  

As Chevron reports, this sale finally closed today. It relieves Chevron of its interest in an oilfield that has been adding 20,000 barrels a day to the global oil glut, slightly decreasing the company's exposure to weak oil prices. At the same time, it gives Chevron nearly $1.6 billion (at least, before taxes and fees) that it can redeploy into more profitable ventures -- or to pay down debt.  

Considering that, last we heard, Chevron was lugging around roughly $30 billion in debt, this is very good news indeed.