TNK-BP upbeat on inking long-awaited BP deal

TNK-BP Management Company is close to inking a deal to buy BP’s assets in Vietnam.

Russia-based TNK-BP spokesman Thomas Kiehn told VIR that the deal was close to be sealed and was only waiting for the Vietnamese government’s final approval.

TNK-BP moved for BP in July last year, after the British firm decided to dissolve some of its global assets following the disastrous Gulf of Mexico oil spill in the southern United States in April 2010.

“The key asset of the deal is offshore gas Block 06.1. This is a major asset and TNK-BP will be the operator in this joint venture with PetroVietnam and India’s Oil and Natural Gas Corporation Videsh. The other assets, Nam Con Son Pipeline and the Phu My 3 Power Plant [where TNK-BP will not be operator] will be transferred shortly after the Block 06.1 approval is received,” Kiehn said.

“We anticipate that we will have a licence awarding ceremony in early August,” he added.

TNK-BP is a joint venture between BP and Russia companies.

BP’s asset which were  due to be transfered to TNK-BP were upstream assets, stakes in gas production, pipeline and power station interest, with total cost of $1.8 billion. Those include Lan Tay-Lan Do gas field in block 06.1 offshore Vietnam, Nam Con Son pipeline system and Phu My 3 Power plant in Ba Ria-Vung Tau province. It was reported previously that India ONGC, Singapore’s Sinopec, Thailand’s PTTEP and Kuwait Foreign Petroleum Exploration Company (Kufpec) expressed interest in this sale. 

PetroVietnam, the host partner in the BP’s joint venture, was given pre-emption rights to buy the stake first, however it refused, blaming that the price was not “proper”.

TNK-BP is Russia’s third largest oil company, formed in 2003 with 50 per cent stakes held by BP and the other 50 per cent held by the AAR Consortium (consisting of Alfa Group, Access Industries and Renova).

TNK-BP also owns close to 50 per cent of another Russian oil and gas company, Slavneft. TNK-BP accounts for approximately 16 per cent of Russia’s production.