TNK-BP board to make offer for BP Vietnam assets next month

TNK-BP, BP Plc’s venture with a group of Russian billionaires, will make a proposal to buy BP’s share in an offshore natural gas project in Vietnam.

“We have an offer from BP,” Maxim Barsky, TNK-BP deputy chief executive officer, told reporters in Moscow today. “We are finishing our evaluation of it and I hope in the next board meeting we will make an offer.”

BP, Europe’s largest oil producer by volume, plans to sell $30 billion of assets in 18 months to cover costs linked to the Gulf of Mexico oil spill, the worst in U.S. history. BP said in July it plans to sell interests in the Nam Con Son gas project in Vietnam. TNK-BP’s board meets in October.

TNK-BP agreed on a one-year supply deal with Vietnam Oil & Gas, known as PetroVietnam.

The Moscow-based company will provide a minimum of 100,000 metric tons a month of ESPO-blend crude oil to Vietnam from Russia’s Pacific port Kozmino starting in November and lasting at least a year, Jonathan Kollek, senior vice president for sales, trading and logistics, told reporters today in Moscow. The crude price will be linked to that set in Dubai, he said.

The trade deal should be the “first step” in a developing relationship between PetroVietnam and TNK-BP, Phung Dinh Thuc, chief executive officer of the Vietnamese company, said today in Moscow at the signing ceremony.

TNK-BP seeks an equity stake of as much as 50 percent in the Dung Quat refinery, which produces 6 million tons of crude a year and may produce as much as 10 million tons, Barsky said.

In return, PetroVietnam would gain access to Russian oil deposits, Barsky said. Fields under consideration would likely be among those that feed Russia’s East Siberian Pacific Ocean pipeline, he said.

TNK-BP holds licenses to fields that would supply the Asia pipe in the Siberian Yamal Nenets region and in Eastern Siberia.

The two sides aim to sign a general accord on the venture in time for Russian President Dmitry Medvedev’s visit to Vietnam next month, Barsky said.

Bloomberg

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