WRAPUP 1-India's ONGC keen to buy BP's stake in Vietnam project

Wed Jul 21, 2010 1:40pm BST

Related Topics



 * BP to sell Asian gas fields to help pay spill costs
 * Vietnam assets worth $966 million - analysts
 * ONGC already partners BP in Vietnam project
 * Pakistan assets estimated at $690 million - analysts
  (Adds quotes, details, background)
 By Nidhi Verma and Ho Binh Minh
 NEW DELHI/DALAT, Vietnam, July 21 (Reuters) - Indian
state-run explorer Oil and Natural Gas Corp (ONGC.BO) wants to
buy BP's (BP.L) stake in an offshore Vietnam gas field, as
Hanoi stressed BP must give priority to its partners in the
sale of its energy assets.
 ONGC has a 45 percent share in Block 6.1 in the Nam Con Son
basin, off Vietnam's southeast coast, which is operated by BP
with a 35 percent stake, ONGC's website shows. The rest is
owned by Petrovietnam.
 "Yes, we are interested," ONGC head R.S. Sharma said, when
asked if his firm was interested in buying BP's stake.
 Vietnam's deputy minister of industry and trade Do Huu Hao
earlier said BP must give priority to its partners in sales of
stakes in energy assets in Vietnam before making offers to
outside parties. [ID:nSGE66K0F9]
 A BP spokesman said the company was "exploring divestment
options" for its interest in the Nam Con Son gas project, which
the London-based firm says is one of Vietnam's largest foreign
investment projects.
 The interest, which comprises stakes in the Lan Tay and Lan
Do gas fields, the Nam Con Son pipeline and the Phu My power
generation project, is worth $966 million, analysts at UBS said
in a research note on Monday.
 For Breakingviews on BP's asset sale, click:
 For a Factbox on BP's asset sale, click:    [ID:nN12148109]
 For a related story, click:                 [ID:nLDE66J1O3]
 For Dealtalk on BP's Vietnam assets, click:  [ID:nTOE66706O
 BP has kicked off a $10 billion asset sale aimed at raising
cash to pay for its Gulf of Mexico oil spill. On Tuesday, it
said it planned to sell gas assets in Pakistan and Vietnam
worth around $1.7 billion.
 BP shares were up 3.2 percent by 1220 GMT in a strong
market .FTSE.
 China's CNOOC (0883.HK) (CEO.N) and Sinopec (0386.HK)
(600028.SS) (SNP.N), as well as Thailand's PTTEP (PTT.BK) and s
ONGC (ONGC.BO) were likely to show interest in BP's stake in
the project, bankers and analysts who are familiar with the
asset had told Reuters last week.
 Hao said BP had informally approached Vietnam on the stake
 "They need to have a formal letter with a proposal to the
Vietnamese government," he said. "After that letter (they) need
to discuss with Petrovietnam and partners, Hao told Reuters and
domestic media at a meeting of ASEAN energy ministers.
 "In principle, priority should be given to sell the stake
to partners," he said. "If partners do not buy, then they can
sell to outside parties and in case of selling to outside
parties, they (BP) will need to seek permission from the
Vietnamese government on the supply of bidding documents."
 Other stakeholders in the Nam Con Son pipeline include
ConocoPhillips (COP.N) and Petrovietnam, while Singapore's
Sembcorp Industries (SCIL.SI) and Japan's Kyushu Electric Power
(9508.T) also have stakes in the Phu My 3 power plant.
 Vietnam's relatively small status as an oil producer and
flat production growth over the last five years meant Nam Con
Son is unlikely to attract global players such as ExxonMobil
(XOM.N) and Chevron (CVX.N), some analysts had said.
Analysts say Chinese oil majors could also come up against
political opposition in Vietnam, where suspicion of China runs
high due to the territorial disputes between the countries in
the South China Sea.
 BP also plans to sell its upstream assets in Pakistan
comprising a number of producing fields and exploration blocks
in the southern Sindh province, estimated by UBS to be worth
$690 million.
 (Writing by Ramthan Hussain, Editing by Anshuman Daga)