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Petro Vietnam reveals intentions to buy BP assets   2010-08-05 - VnExpress, Thoi bao Kinh te Vietnam

The Vietnam National Oil and Gas Group (PetroVietnam) is planning to purchase BP’s stake in offshore exploration projects that BP has offered to sell. 

PetroVietnam is going to ask for permission from the Government and submit to the Government plans to purchase BP’s stakes in offshore exploration projects.


Dinh La Thang, Chairman of the Members Council of PetroVietnam, confirmed the news yesterday, August 3, when Thang met the press on the sideline of the Government’s press conference. 


Thang said that under the agreement, if one of the partners in the joint venture withdraws capital in a project, the partner has to prioritize the other remaining partners when selling its stake.


Therefore, PetroVietnam is now planning to join forces with other partners in the joint venture, including Indian ONGC, to purchase the projects on sale.


However, Thang has declined to give information about the process of purchasing shares and about the prices at which PetroVietnam may purchase the shares, stating that the oil and gas group will only carry out the purchase after it submits a plan to the Government and the Government approves the plan.


“This is really a good project, so we will certainly purchase a stake. However, we will only purchase the shares if they offer reasonable prices.  We will not purchase the shares at any cost,” Thang said.


Thang also did not reveal the budget for the affair, but said that it will not be “very significant”.


“There is different information about the value of the project, but none of the figures are official, so I don’t want to comment on the figures,” Thang said.


Meanwhile, according to VnExpress newspaper, foreign newspapers believe the value of the project could be over one billion dollars.


Regarding the capital arrangement, Thang said if PetroVietnam has sound planning, commercial banks will be ready to disburse funds. 


Two weeks ago, local newspapers quoted international press in reporting that the Indian ONGC Group, also a partner in the joint venture, expressed its willingness to buy BP’s assets in Vietnam.


ONGC has a 45 percent share in Block 6.1 in the Nam Con Son basin, off Vietnam’s southeast coast.


VnExpress newspaper quoted the Government website’s report that on July 22, Vietnamese Prime Minister Nguyen Tan Dung received Murli Deora, Indian Oil Minister, in Da Lat City. The Prime Minister encouraged Indian enterprises to expand investment and business in Vietnam, especially in the energy sector.


Besides ONGC, Chinese groups, including CNOOC and Sinopec, and Thai PTTEP, have also expressed their willingness to purchase BP’s stake.


A couple of weeks ago, BP announced it will sell its assets in Vietnam and Pakistan in order to pay for the clean up of the large oil spill in the Gulf Coast.  BP also promised to compensate fishermen from Louisiana who have been affected by the oil spill.


According to BP’s representative in Vietnam, the group’s assets in Vietnam are worth $1.3 billion.

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