Vietnam: TNK BP grabs troubled BP's assets

Vietnam: TNK BP grabs troubled BP's assets

TNK-BP, the third largest oil and gas company in Russia, last week announced
it had reached agreements to take over troubled BP's upstream businesses and
associated interests in Vietnam.

TNK-BP, a joint venture in which BP holds a 50 per cent stake, said it would
pay $1.8 billion for BP's assets in Venezuela and Vietnam.

The agreements include BP's 35 per cent operating interest in offshore Block
06.1, approximately 370 kilometres off south east Vietnam, 32.67 per cent
interest in the 370 kilometre Nam Con Son associated pipeline system and
33.33 per cent in 739 megawatt Phu My 3 power plant in Ba Ria-Vung Tau
province.

Since last July when BP announced its Vietnam assets selling plan to cover
the expenses from the devastating Gulf of Mexico oil spill occurring in
April, concerns had risen from Vietnamese experts about who would be the
replacement investors.

Some experts even suggested the Vietnamese government establish conditions
for BP to choose partners, or give incentives for PetroVietnam to buy out
BP's assets. As a stakeholder in BP's projects, PetroVietnam had the right
to be the first offered to buy BP's assets.

Responded to the agreements, PetroVietnam's chairman Dinh La Thang said
PetroVietnam had considered buying the assets. "But such deals must ensure
efficiency. We would not buy them at any costs."

Thang told VIR that the choice of new partners in these projects would be
important as it was directly related to not only the project's efficiency,
but also long-term interest of the stakeholders.

According to a local oil and gas sector expert, a Russian partner taking
over BP's assets in Vietnam was "good news" for Vietnam, based on two
countries' long relations in oil and gas cooperation.

The Vietnam-Russia Petroleum Joint Venture, or Vietsovpetro, is now in its
27th year operation in Vietnam, occupying roughly 80 per cent of Vietnam's
oil and gas products, contributing more than $20 billion and less than $6
billion to Vietnamese and Russian government budgets, respectively. The
joint venture is among foreign-backed firms with largest tax contribution in
Vietnam.

Apart from that, recently Rusvietpetro, a joint venture between Vietnam and
Russia, received its first oil output from four blocks in the central Khorei
Ver region of Russia's Nenets autonomous district, with the industrial
capacity of 3,000 tonnes crude oil per day, or 21,000 barrels per day.
Another joint venture Vietgazprom has been established in the two nations'
oil and gas sector.

TNK-BP's statement said the acquisitions would be financed entirely through
the company's available resources and would not require additional capital
from the shareholders of TNK-BP.

According to TNK-BP, under the terms of the agreements, it will pay BP a
total deposit of $1 billion on October 29, with the balance of payment due
on completion of the sales. Subject to regulatory and other third party
approvals, and other customary conditions, the parties anticipate completing
both sales in the first half of 2011.

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Link to Original Article:
https://www.vietmaz.com/2017/02/tnk-bp-grabs-troubled-bps-assets/?utm_source
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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com