TNK-BP inks transfer deals to acquire BP’s gas block in Vietnam

Anglo-Russian TNK-BP has signed transfer agreements with BP, Vietnam’s PetroVietnam and India’s ONGC on purchasing the British company’s share in the gas block 06.1 offshore Vietnam, the oil venture said Wednesday.

“Today TNK-BP signed the transfer agreements on Block 06.1, which confirm partner approval of the acquisition and TNK-BP’s [future] role of the project’s operator,” it said in a statement.

The agreements, which will now be submitted to Vietnam’s Ministry of Industry and Trade to receive final governmental approval, were signed by the block’s former operator BP, as well as TNK-BP’s future partners in the joint venture, PetroVietnam and ONGC Videsh, the international arm of India’s ONGC, TNK-BP said.

In October 2010, TNK-BP signed agreements to acquire BP’s upstream, pipeline and electricity assets in Vietnam and Venezuela for a total cost of $1.8 billion as BP sought to raise funds to pay for its Macondo spill liabilities.

In Vietnam, TNK-BP will acquire from BP a 35% stake in offshore gas production block 06-1, which contains the Lan Tay and Lan Do gas condensate fields, a 32.7% stake in the Nam Con Son Pipeline and Terminal, and a 33.3% stake in the Phu My 3 power plant.

The Wednesday agreement covers the Block 06.1 only, to be followed by agreement on the other assets, a spokesman with TNK-BP said.

Block 06.1 is Vietnam’s largest in-country gas producer and will bring TNK-BP production of 18,800 barrels of oil equivalent/day on a net entitlement basis in 2011, it said.

“We are confident that Block 06.1 is a high-quality asset that will enable TNK-BP to develop new expertise, particularly its offshore capabilities,” TNK-BP’s Deputy Chief Executive Officer Maxim Barsky was quoted as saying in the statement. “As operator of Block 06.1, TNK-BP will ensure responsible operations and the highest commitment to environmental safety.”

Barsky said PetroVietnam and ONGC gave up their pre-emptive rights in early March to buy the assets from BP, and TNK-BP was expecting to complete the deal by the end of June.

The acquisitions in both Vietnam and Venezuela are on track to be completed in the first half of 2011, TNK-BP reiterated.

In Venezuela, TNK-BP expects to acquire from BP a 16.7% equity stake in extra heavy oil producer PetroMonagas, a 40% stake in Petroperija which operates the DZO field, and a 26.7% stake in Boqueron.

These assets are operated as joint ventures with Venezuelan state oil company PDVSA and have a combined capacity of 25,000 b/d of oil equivalent.

Tags: BP gas block in Vietnam