India won Vietnam's support on Thursday for its bid for crisis'hit BP Plc's energy assets in the South Asian country, as Hanoi stressed BP must give priority to its partners in the stake sale.
The two nations, who are partners of BP in offshore gas fields in Block 06.1, appeared cozying up for splitting the British firm's stake between them after a meeting between India's Oil Minister Murli Deora and Vietnamese Prime Minister Nguyen Tan Dung.
"I had a very good meeting where the Vietnamese Prime Minister agreed with our proposal to takeover BP's interest (in an offshore gas field, a pipeline and a power plant - together known as Nam Con Son project)," Mr. Deora told PTI here.
"He was supportive and asked us to work out details (of the bid)," he said without further elaborations.
ONGC Videsh Ltd, the overseas investment arm of State-run Oil and Natural Gas Corporation (ONGC), already has 45 per cent stake in the offshore gas fields where BP has 35 per cent and the balance 20 per cent is with Vietnam's national oil firm PetroVietnam.
Both OVL and PetroVietnam are keen to acquire BP's stake in the fields that currently produce about 14 million standard cubic meters per day of gas.
"He (Dung) sounded very positive (on India making a bid for BP?s interest). I think we are making progress," Mr. Deora said, adding Vietnam gave enough hints that it will not come in way of BP selling its stake to India.
Vietnam's Deputy Minister of Industry and Trade Do Huu Hao earlier said BP must give priority to its partners in sales of stakes in Vietnam assets before making offers to outside parties. In all likelyhood, OVL and PetroVietnam may arrive at an understanding to divide the BP's stake between them.
"We are open to taking 1 per cent to 35 per cent stake," Mr. Deora said. "Since (India's first Prime Minister Jawarhal) Nehru to (former prime ministers) Indira Gandhi and Rajiv Gandhi and now (UPA Chairperson) Sonia Gandhi, India has always supported Vietnam. We have very good relations with them and we will be happy to extend our relationship."
Besides the offshore fields, BP also has 32.33 per cent stake in a 371-km pipeline, built at a cost of $ 565 million, that ships the gas produced from the fields to onshore power plants. ConocoPhillips (16.7 per cent) and Petrovietnam (51 per cent) are other partners in the pipeline.
The gas produced from the fields is supplied to a 720 MW, $ 412 million Phu My-3 power plant where BP, Japan's Kyushu Electric Power and Singapore's Sembcorp have 33.3 per cent stake each.
India is keen to take BP?s stake in the pipeline project and the power plant.
"BP has told the Vietnam government that they want to sell their stake in the Vietnam gas fields," Mr. Deora said.
The British energy giant intends to sell all of its assets in Vietnam and Pakistan, except for its lubricants business, in its drive to raise $ 10 billion to help pay for the Gulf of Mexico oil spill clean up and compensation.
The Vietnamese assets are valued at about $ 966 million and the Pakistan business at about $ 690 million, according to investment banker UBS.
"In principle, priority should be given to sell the stake to partners,? Mr. Hao said. ?If partners do not buy, then they can sell to outside parties."
OVL had sold stake in the Lan Tay field in the block 06.1 in Vietnam to BP after winning the exploration license for the area in 1988.
Mr. Deora flew into the Vietmease capital Hanoi on Wednesday and held discussions with top officials of Petrovietnam. Later he flew to Dalat, the venue of ASEAN Energy Ministers meeting. He met the Vietnamese Prime Minister on sidelines of the conference.
"The gas fields were originally allocated to us but due to foreign exchange crisis of 1990s, we had to farm?out (give away) some stake to BP. We will like to get back that stake," Mr. Deora said.
China's CNOOC and Sinopec as well as Thailand's PTTEP may also be interested in BP's stake in the Vietnam project.
Chinese oil majors could come up against political opposition in Vietnam, where suspicion of China runs high due to the territorial disputes between the countries in the South China Sea.
Oil Secretary S. Sundareshan said India is interested in taking over Bk's stake in all the segments of the Nam Con Son project - the gas fields, pipeline and the power plant.
While OVL along with State-owned Oil India Ltd may takeover BP stake in the gas fields, gas utility GAIL India was interested in the British energy giant's stake in the pipeline. GAIL and refiner Indian Oil Corp (IOC) can together manage the power plants.
Nam Con Son project's upstream part is the Block 06.1, located 370 km south-east of Vung Tau on the southern Vietnamese coast. The 955 sq km block has Lan Tay and Lan Do gas fields. Lan Tay currently produces around 14 million standard cubic meters per day of gas while Lan To is being developed currently.
OVL recouped all its investment in the project in 2006 and currently earns $ 35?40 million of net revenues, officials said.
OVL has so far invested $ 217 million in the gas fields and has government approval to invest up to $ 377.46 million.
ONGC Chairman and Managing Director R. S. Sharma, OVL Managing Director R. S. Butola, GAIL Chairman and Managing Director B. C. Tripathi, OIL Chairman and Managing Director N. M. Borah and IOC Director (Refineries) B. N. Bankapur are part of the high-level delegation Mr. Deora is leading.
Besides Nam Con Son, BP also owns 75.9 per cent operating interest in Block 5?2 with Petrovietnam holding 24.1 per cent.
It partners ConocoPhillips and PetroVietnam in Block 5?3.
OVL also has two other exploration blocks - 127 and 128 in Vietnam.
The gas fields in Block 06.1 were discovered in 1998 and were put on production in January 2003. The field produced an average of 12 mmscmd in 2009 and with additional compressors being put, the output will rise to 15 mmscmd.
