PetroVietnam eyes BP oil rights

The PetroVietnam Group has the option to consider purchase of offshore projects that BP has put up for sale, says PetroVietnam director general Phung Dinh Thuc.

On Tuesday, Petro-Vietnam received a report from British Petroleum (BP) about a deal reached between BP and TNK-BP, Russia’s third largest oil company.

Under the deal, BP will sell its upstream businesses and associated interest in Venezuela and Viet Nam to TNK-BP with a combined value of US$1.8 billion, according to BP’s report.

BP’s assets in Viet Nam include a 35-per-cent stake in the offshore Block 06.1, currently operated by BP, approximately 370km offshore of southeast Viet Nam which contains the Lan Tay and Lan Do gas fields.

BP also has a 32.67-per-cent interest in the Nam Con Son Gas Pipeline, operated by PetroVietnam and a 33.3 -per-cent stake in the joint venture that owns and operates the Phu My Power Plant No 3 in Ba Ria – Vung Tau Province.

“PetroVietnam could decide to buy BP’s stake if the offered sale prices were reasonable and equal to those offered by TNK-BP,” Thuc said.

“A detailed description of the value of BP’s assets in Viet Nam alone (excluding its assets in Venezuela) remained undisclosed in the report BP sent to PetroVietnam,” Thuc said.

However, unofficial information reveals that BP’s assets in Viet Nam are worth an estimated $1 billion.

PetroVietnam and India’s Oil Natural Gas Corporation Ltd (OGNC) currently partner with BP in offshore exploitation projects in Viet Nam.

If one of the joint venture partners opts to withdraw capital from a project, the other partners, including PetroVietnam, are given priority options to buy the stake and also have the right to approve the final sale.

“PetroVietnam has the right to consider purchase within 60 days of receiving the official BP report,” Thuc said.

TNK-BP is owned equally by BP and the AAR Consortium (consisting of Alfa Group, Access Industries and Renova).

The BP report reveals the expectation that the majority of 175 staff employed in the Viet Nam and Venezuela businesses will transfer to TNK-BP upon completion of the deal.

“The agreement between BP and TNK-BP is further evidence of the rapid progress BP is making towards the divestment target we set in July,” said Bob Dudley, chief executive officer of the BP Group.

The sale is part of BP’s plan to make divestment’s of up to $30 billion by the end of next year in an effort to meet its financial obligations arising from the recent oil spill in the Gulf of Mexico.

The agreement does not affect BP’s other business activities in Viet Nam, including a significant lubricants blending and marketing business, nor in Venezuela. — VNS

Tags: BP, PetroVietnam