Vietnam to help Indian cos in acquiring BP stake in gas project
New Delhi   23-Jul-2010

Attempts to acquire BP Plc's stake in Nam Con Son gas project by the Indian public sector oil companies got a boost with Vietnam on Thursday giving its assurance.

Indian companies will jointly work with PetroVietnam, the National Oil Company of Vietnam, for acquiring the British firm's stake in the 'Nam Con Son gas project'.

The Petroleum Minister, Mr Murli Deora, after calling on the Prime Minister of Vietnam, Mr Nguyen Tan Dung, told Business Line that "the Prime Minister has in-principle agreed to our proposal. He has asked us to work out the details."

The Petroleum Minister, who discussed the further strengthening of bilateral ties in the hydrocarbon sector with Vietnam's Prime Minister, said that "according to the production sharing contract, if somebody wants to exit the project then the existing partners must be given the first right."

Details on how the joint acquisition will be formed for acquiring BP's stake in the upstream part of the project is being discussed between ONGC Videsh Ltd (OVL), the overseas investment arm of ONGC, and PetroVietnam.

Following the Gulf of Mexico incident, BP is looking at divesting stake from its existing project in Vietnam. Indian public sector companies ONGC, GAIL (India), IndianOil, and Oil India are making a claim on BP's stake in two offshore gas fields, a pipeline and power project, called the 'Nam Con Son gas project'.

The project is estimated to be worth $1.3 billion. While OVL will be further increasing its stake in the gas producing asset, where it has partnered with BP and PetroVietnam. IndianOil will be looking at the 720-MW power project, where BP has a stake. GAIL is exploring the opportunity of acquiring BP's stake in the 376-km pipeline.

Upstream project

In the upstream project, BP, which is also the operator of the asset has 35 per cent stake, OVL has 45 per cent equity, and remaining is with PetroVietnam 20 per cent.