Local giant eyeing up ConocoPhillips

New PetroVietnam chairman Phung Dinh Thuc told VIR that those assets would be negotiated on the bases of efficiency and benefits for Vietnam, but not for “any cost”. Starting presence in Vietnam in 1996, ConocoPhillips has involved in three oil and gas projects off the coast of Vietnam.

“For PetroVietnam, we must put efficiency as the top factor. These assets could be taken over by PetroVietnam if they are proved to be efficient enough,” Thuc said. Even if PetroVietnam could not   take over ConocoPhillips’ assets, Thuc said profits would still be received from these projects via PetroVietnam’s stakes in these assets.

ConocoPhillips spokesman John McLemore refused for comments when contacted by VIR. However in a previous interview,  McLemore confirmed that those assets were in Block 15.1, Rang Dong oil field and Nam Con Son pipeline projects, with a total value of $1.5 billion.

In Block 15.1 PetroVietnam has a 50 per cent stake, with ConocoPhillips, Korea National Oil Corp, SK Corp and Geopetrol holding the rest, according to ConocoPhillips’ website. Japan Vietnam Petroleum has a 46.5 per cent share of Rang Dong field, while PetroVietnam holds a 17.5 per cent stake. ConocoPhillips owns the rest.

Meanwhile, PetroVietnam has a 51 per cent stake in the Nam Con Son pipeline. BP in October last year agreed to sell its 32.7 per cent stake in the pipeline to Moscow-based TNK-BP. ConocoPhillips owns the remaining share.

Previously ConocoPhillips announced to sell a number of its assets  worldwide including those in Vietnam due to “re-structuring” its investment portfolios. As host country, Vietnam has priority rights for any such purchase.

ConocoPhillips is a big oil and gas investor in Vietnam and holds 4.7 million gross acres in six blocks 15.1, 15.2, 133, 134, 5.2 and 5.3. In late 2009, PetroVietnam said it had considered buying BP’s stakes in offshore oil projects, but later waived the option, paving the way for BP to sell them to its Russian joint venture, TNK-BP, for $1.8 billion.

While ConocoPhillips and BP decided to transfer their assets in Vietnam, the US oil and gas producer Chevron has stepped up its profile in Vietnam. Chevron confirmed to have final investment decision for the offshore development of Vietnam Block B Gas Project in the fourth quarter of this year.

Chevron said the targeted maximum total daily production is 490 million cubic feet of natural gas.
According to Chevron, the total investment capital of the project was $7 billion, including over $4 billion for gas development and pipeline installation and $3 billion for constructing five power plants.
Of the capital, foreign investment contribution for the value chain would be over $4 billion, including O Mon II power plant, which will be bid out as a  build-operate-transfer project.

Chevron’s share would be about $2 billion in gas development and pipeline installation. This investment would make Chevron the biggest US investor in Vietnam. Chevron is now the operator and 42.38 per cent-owner of blocks B and 48/95. Other partners of Block B are Japan’s Mitsui Oil (26.62 per cent), PetroVietnam (23.5 per cent) and Thailand’s PTTEP (8.5 per cent). In block 52/97 Chevron owns 43.4 per cent of stakes, the rest belongs to PetroVietnam (30 per cent), Mitsui Oil (19.6 per cent) and PTTEP (7 per cent).