The Indian government plans to buy BP's stake in Vietnam's largest gas project as the company plans to sell several of its assets to meet the rising cleanup costs of the Gulf of Mexico oil spill. BP announced its plans to pull out of Vietnam as part of a US$30bn divestment drive aimed at raising funds to pay for the Macondo oil spill cleanup and associated liabilities demanded by U.S.
For this purpose, state-run explorer Oil and Natural Gas Corporation (ONGC) will make a joint bid with Petrovietnam. Vietnam as a geography will be simple for investments and ONGC knows the geology of the area.
This ONGC's efforts to acquire BP's Vietnamese assets would be a welcome step forward for India's international growth strategy, which has been slowed by stiff competition from China for foreign oil and gas assets.
ONGC is in the process of evaluating BP's assets, after which it will make a joint bid with PetroVietnam. The valuation process to be completed within a few weeks. It is expected that the OVL-PetroVietnam effort would be successful, as its stake in the Nam Con Son project gives it pre-emption rights over that block and, in spite of earlier reports indicating potential Russian interest in the assets, the company is the only one in active negotiations.
ONGC has a 45% share in Block 6.1 in the Nam Con Son basin, off Vietnam’s southeast coast, operated by BP, which has a 35% stake. The remaining 20% is owned by state-run Petrovietnam. These two fields contain estimated reserves of 58bn cubic metres (bcm) and are producing 4bcm per annum on average. Gas from the Nam Con Son fields is transported via a 400km pipeline to two power plants in the Ba Ria-Vung Tau province. BP operates the pipeline in partnership with PetroVietnam and ConocoPhillips.
For the India state-run company it would mark a much-needed success in its drive to acquire oil and gas assets abroad. Indian companies have repeatedly found themselves outspent and outmanoeuvred, particularly by China's large state-owned companies, in the search for international assets which the country needs to keep up with soaring domestic demand. State-owned Chinese companies spent US$32bn acquiring energy assets in 2009 with to a sole US$2.1bn acquisition by ONGC. ONGC will no doubt be hoping that buying BP's Vietnam assets will mark the first of more successful asset acquisitions.
For this purpose, state-run explorer Oil and Natural Gas Corporation (ONGC) will make a joint bid with Petrovietnam. Vietnam as a geography will be simple for investments and ONGC knows the geology of the area.
This ONGC's efforts to acquire BP's Vietnamese assets would be a welcome step forward for India's international growth strategy, which has been slowed by stiff competition from China for foreign oil and gas assets.
ONGC is in the process of evaluating BP's assets, after which it will make a joint bid with PetroVietnam. The valuation process to be completed within a few weeks. It is expected that the OVL-PetroVietnam effort would be successful, as its stake in the Nam Con Son project gives it pre-emption rights over that block and, in spite of earlier reports indicating potential Russian interest in the assets, the company is the only one in active negotiations.
ONGC has a 45% share in Block 6.1 in the Nam Con Son basin, off Vietnam’s southeast coast, operated by BP, which has a 35% stake. The remaining 20% is owned by state-run Petrovietnam. These two fields contain estimated reserves of 58bn cubic metres (bcm) and are producing 4bcm per annum on average. Gas from the Nam Con Son fields is transported via a 400km pipeline to two power plants in the Ba Ria-Vung Tau province. BP operates the pipeline in partnership with PetroVietnam and ConocoPhillips.
For the India state-run company it would mark a much-needed success in its drive to acquire oil and gas assets abroad. Indian companies have repeatedly found themselves outspent and outmanoeuvred, particularly by China's large state-owned companies, in the search for international assets which the country needs to keep up with soaring domestic demand. State-owned Chinese companies spent US$32bn acquiring energy assets in 2009 with to a sole US$2.1bn acquisition by ONGC. ONGC will no doubt be hoping that buying BP's Vietnam assets will mark the first of more successful asset acquisitions.
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