TNK-BP Group said it has been awarded the license to operate Vietnam’s offshore natural gas Block 06-1, which it last year agreed to purchase from BP PLC.
The Vietnamese Ministry of Investment and Trade granted TNK Vietnam, the Vietnam-based subsidiary of TNK-BP Group, the investment license to operate the block, which is part of the Nam Con Son Integrated Gas-to-Power Project, TNK-BP said.
TNK-BP acquired its 35% stake in the block from BP, along with a 32.7% stake in the Nam Con Son pipeline and terminal and a 33.3% stake in the Phu My 3 power plant, all pending lender and government approval.
TNK-BP said its 35% stake in Block 06.1, which contains the Lan Tay and Lan Do gas condensate fields, will add 17,000 boe/d to the firm’s production. According to BP Vietnam, the Lan Tay platform is producing more than 4.6 billion cu m/year of gas.
Analyst Tom Grieder of IHS Global Insight said Vietnam's approval of TNK-BP as operator of Block 06-1 means that Russian firms are partners in Vietnam's largest producing oil and gas fields, while also having “major acreage positions” in emerging areas of the Nam Con Son and Song Hong basins.
“Going forward, Russian companies are looking to expand further upstream and might be interested in bidding for ConocoPhillips’s assets or for blocks offered in Vietnam's fourth licensing round,” Grieder said.
However, the Russians face considerable competition as some 50 other international oil companies, among them state-owned PetroVietnam, also are interested in acquiring ConocoPhillips’s Vietnam assets, which are valued at $1.15 billion.
Indeed, earlier this month, PetroVietnam Deputy Chief Executive Nguyen Tien Dung said his firm already has submitted a bid for ConocoPhillips’s oil and gas assets in Vietnam.
The bid includes ConocoPhillips’s 23.3% stake in Cuu Long Joint Operating Co., which operates five oil fields on Block 15-1 in the Cuu Long basin, a 36% stake in Block 15-2 in the same basin, and a 16.3% stake in the Nam Con Son gas pipeline.
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