PetroVietnam ready to swoop for BP operations

PetroVietnam chairman Dinh La Thang last week confirmed that the group planned to submit a proposal to buy stakes in BP’s upstream offshore projects.

Vietnam and BP are involved in four projects, the Lan Tay-Lan Do gas field in Block 06.1, Nam Con Son pipeline system, Phu My 3 power plant and BP Petco lubricant joint venture.

BP planned to transfer stakes from the first three projects, but not the last one.

A BP Vietnam representative said BP had informed the Vietnamese government of its intention to explore options for divestment of its upstream assets and was now awaiting approval.

“Our top priority is to continue safe and reliable operations now, during transition and thereafter,” a BP Vietnam spokeswoman said.

Thang was quoted by local press as saying under the agreement signed among partners of the above projects, if one of the partners wanted to withdraw the investment capital or quit the project it would offer priority rights to buy stakes to the other partners in the project.

“We have already made a plan to coordinate with India partners [the third partner in those projects] to buy those stakes,” he said.

However, Thang also confirmed that the group would set up a “reasonable price plan” to buy those stakes, but not “buy in any price”. This plan will be submitted and approved by the Vietnamese government, he added.

Thang did not reveal the financial source for buying, or comment on the project prices, estimated at around $1 billion.

However, he confirmed that the projects had been effectively operating in Vietnam and if PetroVietnam presented good development plan it would not face difficulties to raise financial sources.

Meanwhile, an overseas newspaper quoted India’s oil secretary S Sundareshan that India’s Oil and Natural Gas Corporation (ONGC) and PetroVietnam would jointly bid for BP’s assets in Vietnam.

“We met with the prime minister of Vietnam and we had said we will work with PetroVietnam [to buy BP’s stake]. We are discussing with BP and PetroVietnam,” Sundareshan said.

Meanwhile, BP Vietnam confirmed that BP’s other businesses in Vietnam, which are to supply crude oil to the Dung Quat refinery and the production and marketing of lubricants at Castrol BP Petco, would not be affected by the divestment plan.

BP arrived in Vietnam in 1989 and its exploration activities in the 1990s discovered four major gas fields 320 kilometres south of Ho Chi Minh City.

These have resulted in the $1.3 billion Nam Con Son gas project. This complex operation involves the development of the Lan Tay and Lan Do fields, the laying of a two-phase 400km offshore and onshore pipeline and the construction of the 720 megawatt Phu My 3 power plant in Ba Ria-Vung Tau province.

According to BP Vietnam, production started in November 2002 and today BP’s operations supply four billion cubic metres of gas annually to meet around 24 per cent of Vietnam’s electricity generation.

The gas production capacity was increased from 10 to 15 million metric standard cubic metres per day after the installation of a new compression model in 2008.

The Nam Con Son pipeline that BP built, operated, expanded, and transferred operatorship to PetroVietnam has become a model of a sustainable, reliable and efficient investment project in Vietnam. – VIR

Tags: BP assets in Vietnam, PetroVietnam