Perenco upstages giants

US-backed ConocoPhillips announced that it had reached a billion-dollar plus agreement to offload its assets in Vietnam to Perenco, an oil and gas company with operations in 16 countries across the globe.

In its statement, ConocoPhillips said the sale of assets in Vietnam was a part of ConocoPhillips’s ongoing strategy to create shareholder value.

The company said that the Vietnam business unit was sold at a total of $1.29 billion plus customary working capital adjustments. However, previously ConocoPhillips expected that those assets would have total valued at up to $1.5 billion.

ConocoPhillips will now sell its three wholly-owned subsidiaries that separately hold a 23.25 per cent participating interest in Block 15-1, a 36 per cent participating interest in Block 15-2, and a 16.3 per cent participating interest in Nam Con Son pipeline, the company said. It expected the transaction to go ahead in the first half of 2012.

“The sale of our Vietnam business unit is an important component of our $15-20 billion 2010-2012 asset divestiture programme. ConocoPhillips has conducted business in Vietnam for more than 15 years, and we are pleased that Perenco has recognised the value of these quality assets,” said Al Hirshberg, senior vice president, planning and Strategy, ConocoPhillips.

Many competitors had eyed on ConocoPhillips assets in Vietnam over the last two years, including PetroVietnam and TNK–BP. PetroVietnam as the host country had priority rights in the sale. But the group’s chairman Phung Dinh Thuc said that he would not “get these assets at any price”.

In 2010-2011, ConocoPhillips’ asset divestiture programme yielded $10.7 billion in proceeds. Along with a $9.5 billion sale of shares in Russian Lukoil, this gave the US firm total dispositions of $20.2 billion over the period.