September 27, 2017 / 6:28 AM / a year ago

Chevron may miss mid-Oct target to close sale of Bangladesh gas fields -sources

* Deal, announced in April, due to close around mid-Oct

* Dhaka undecided over whether to back a counterbid -source

* China firm has Beijing green light for acquisition

By Ruma Paul and Chen Aizhu

DHAKA/BEIJING, Sept 27 (Reuters) - Chevron Corp may miss its mid-October target for closing the agreed $2 billion sale of its natural gas assets in Bangladesh to a Chinese consortium as Dhaka weighs the prospect of a counterbid, people with knowledge of the matter said.

The U.S. oil major agreed in April to sell its three Bangladesh gas fields to Himalaya Energy, comprising state-run Chinese oil trader Zhenhua Oil and a government investment platform, CNIC Corp. Chevron had planned to close the sale, part of non-core asset disposals, around mid-October.

But Bangladesh’s state oil and gas firm Petrobangla claims it has the first right of refusal in the sale. A government official who declined to be identified said Dhaka remains undecided over whether to back a counterbid amid doubts on whether Petrobangla has the expertise to run the fields, or the funds to make future investments.

“The deal looks very uncertain as the deadline for in about two weeks’ time,” said a Beijing-based Chinese oil executive with knowledge of the deal’s status.

“Chevron may need to decide then whether it wants to extend the deadline, or to reassess its strategy in Bangladesh,” the executive said. He declined to be identified because of company policy.

Chevron declined to comment on Reuters’ questions regarding the asset sale’s progress.

The offshore gas fields - Bibiyana, Jalalabad and Moulavi Bazar - have average net daily output of 720 million cubic feet of gas and 3,000 barrels of condensate, or liquid hydrocarbon produced with gas. Chevron sells the entire output to Petrobangla under a production sharing contract and most of the fuel is used to generate electricity for the country.

When asked by Reuters early this month, Petrobangla’s chairman, Abul Mansur Md. Faizullah, said a decision on a potential counterbid was pending. He declined to provide further details.

Financial sources familiar with Petrobangla said earlier in September the Bangladesh firm was tapping banks with a view to potentially funding a counterbid.

Meanwhile the government was waiting for a final asset assessment by consultancy Wood Mackenzie before making a decision, according to a Petrobangla official.

“As per production sharing contract, Chevron has no right to transfer its shares without permission,” said the official, who declined to be named as he was not authorized to speak to media.

“They (Chevron) never officially informed us about the deal with a Chinese company. We came to know only from media,” the official said.

Chevron didn’t say whether it had informed Petrobangla on its plans for the gas fields before the sale was agreed.

A spokesman at China’s Zhenhua Oil said that his company has been “actively communicating” with Chevron and Dhaka. He said the Chinese government gave its nod to the acquisition shortly after the deal was agreed.

For Zhenhua Oil, among the smallest state-run Chinese oil and gas firms, the Bangladesh assets would provide a much-need addition to its reserve base. A completed deal would also mark the first major Chinese energy investment in the South Asian nation, where China is vying with India and Japan for influence. (Reporting by Ruma Paul in DHAKA and Chen Aizhu in BEIJING; Additional reporting by Anshuman Daga in SINGAPORE; Editing by Kenneth Maxwell)

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