TNK-BP to acquire BP's Vietnam, Venezuela assets

Russian oil company TNK-BP said on Monday it had agreed a deal with its part-owner BP to acquire the troubled British oil giant's assets in Vietnam and Venezuela for US$1.8 billion.

TNK-BP, Russia's third-biggest oil company, is owned 50 percent by BP and 50 percent by a group of Russian billionaires including banking magnate Mikhail Fridman known collectively as Alfa Access-Renova (AAR).

The divestment is in line with a plan by BP to sell up to $30 billion (€21.2 billion) of assets by the end of 2011 to help meet its financial obligations from the Gulf of Mexico oil spill.

"Today's agreement is further evidence of the rapid progress BP is making towards the divestment target we set out in July," BP's new chief executive, Robert Dudley, said in a statement

Dudley, who replaced Tony Hayward after the oil spill catastrophe, said that the acquisition would give TNK-BP a solid foundation to build its business outside Russia.

TNK-BP almost imploded during a venomous shareholder conflict between the co-owners in 2008 but the dispute was patched up when shareholders agreed to appoint Maxim Barsky chief executive effective from January 1, 2011, with Fridman taking the reins in the interim.

Ironically, Dudley was ousted as TNK-BP chief executive at the height of the conflict. With relations now smooth, Hayward has been nominated as non-executive director at TNK-BP after his departure from BP.

TNK-BP, which operates huge oil fields in Siberia and accounts for 16 percent of Russian production, has long been considered one of BP's crown jewels.

"The acquisitions in Venezuela and Vietnam mark a milestone in TNK-BP's strategic expansion in the global energy market," said Fridman, who is serving as acting chief executive of the company, in a TNK-BP statement.

TNK-BP said a deposit of $1 billion will be made by October 29 with final payment upon completion.

"Subject to government approvals and the fulfilment of other agreed pre-closing conditions, the companies expect the transaction to be completed in the first half of 2011."

According to the terms of the agreements, in Venezuela TNK-BP will acquire from BP a 16.7 percent equity stake in the PetroMonagas SA extra heavy oil producer, a 40 percent stake in Petroperija SA which operates the DZO field, and a 26.7 percent stake in Boqueron SA.

The deal comes after Russian and Venezuela on Friday signed a memorandum of understanding supporting the acquisition, at a ceremony in the Kremlin attended by Venezuelan President Hugo Chavez and Russia's Dmitry Medvedev.

In Vietnam, TNK-BP will acquire from BP a 35-percent stake in an upstream offshore gas production block containing the Lan Tay and Lan Do gas condensate fields, a 32.7-percent stake in the Nam Con Son Pipeline and Terminal, and a 33.3-percent stake in the Phu My 3 power plant.

The acquisitions of the assets in Venezuela and Vietnam will bring TNK-BP net proved and probable reserves of 290 million barrels of oil equivalent, it said.

TNK-BP has also expressed interest in acquiring BP's assets in Algeria and the issue was discussed earlier this month during a visit by Medvedev to the North African country.

Related Articles

• TNK-BP to acquire BP's Vietnam, Venezuela assets
• Market plunges for third straight day
• Market moves up sharply
• Vinashin collapse gives State a lesson
• Vinashin collapse gives State a lesson

TNK-BP to acquire BP's Vietnam, Venezuela assets

Russian oil company TNK-BP said on Monday it had agreed a deal with its part-owner BP to acquire the troubled British oil giant's assets in Vietnam and Venezuela for US$1.8 billion.

TNK-BP, Russia's third-biggest oil company, is owned 50 percent by BP and 50 percent by a group of Russian billionaires including banking magnate Mikhail Fridman known collectively as Alfa Access-Renova (AAR).

The divestment is in line with a plan by BP to sell up to $30 billion (€21.2 billion) of assets by the end of 2011 to help meet its financial obligations from the Gulf of Mexico oil spill.

"Today's agreement is further evidence of the rapid progress BP is making towards the divestment target we set out in July," BP's new chief executive, Robert Dudley, said in a statement

Dudley, who replaced Tony Hayward after the oil spill catastrophe, said that the acquisition would give TNK-BP a solid foundation to build its business outside Russia.

TNK-BP almost imploded during a venomous shareholder conflict between the co-owners in 2008 but the dispute was patched up when shareholders agreed to appoint Maxim Barsky chief executive effective from January 1, 2011, with Fridman taking the reins in the interim.

Ironically, Dudley was ousted as TNK-BP chief executive at the height of the conflict. With relations now smooth, Hayward has been nominated as non-executive director at TNK-BP after his departure from BP.

TNK-BP, which operates huge oil fields in Siberia and accounts for 16 percent of Russian production, has long been considered one of BP's crown jewels.

"The acquisitions in Venezuela and Vietnam mark a milestone in TNK-BP's strategic expansion in the global energy market," said Fridman, who is serving as acting chief executive of the company, in a TNK-BP statement.

TNK-BP said a deposit of $1 billion will be made by October 29 with final payment upon completion.

"Subject to government approvals and the fulfilment of other agreed pre-closing conditions, the companies expect the transaction to be completed in the first half of 2011."

According to the terms of the agreements, in Venezuela TNK-BP will acquire from BP a 16.7 percent equity stake in the PetroMonagas SA extra heavy oil producer, a 40 percent stake in Petroperija SA which operates the DZO field, and a 26.7 percent stake in Boqueron SA.

The deal comes after Russian and Venezuela on Friday signed a memorandum of understanding supporting the acquisition, at a ceremony in the Kremlin attended by Venezuelan President Hugo Chavez and Russia's Dmitry Medvedev.

In Vietnam, TNK-BP will acquire from BP a 35-percent stake in an upstream offshore gas production block containing the Lan Tay and Lan Do gas condensate fields, a 32.7-percent stake in the Nam Con Son Pipeline and Terminal, and a 33.3-percent stake in the Phu My 3 power plant.

The acquisitions of the assets in Venezuela and Vietnam will bring TNK-BP net proved and probable reserves of 290 million barrels of oil equivalent, it said.

TNK-BP has also expressed interest in acquiring BP's assets in Algeria and the issue was discussed earlier this month during a visit by Medvedev to the North African country.

Related Articles

• TNK-BP to acquire BP's Vietnam, Venezuela assets
• Market plunges for third straight day
• Market moves up sharply
• Vinashin collapse gives State a lesson
• Vinashin collapse gives State a lesson

BP sells $1.8bln of assets to Russian JV TNK-BP

Photo: Reuters

LONDON/MOSCOW - BP has agreed to sell a package of oil and gas fields in Vietnam and Venezuela to its Russian joint venture TNK-BP for US$1.8 billion as the London-based oil major raises cash to pay for its Gulf of Mexico oil spill.

BP said in a statement on Monday that the assets represented reserves of 270 million barrels of oil equivalent and production of 40,000 barrels of oil equivalent per day.

The sale brings to around $11.5 billion the amount BP has agreed from asset sales in recent months. The company has a divestment target of $25 billion to $30 billion over the next 18 months.

Analysts said the price was in line with their valuations for the assets, which they added were not strategic for BP.

"This allows BP to high-grade its portfolio," Iain Armstrong, oil analyst at Brewin Dolphin said.

The deal also sees TNK-BP realize its ambition of growing outside Russia, where it is the third-largest oil producer.

"The acquisitions in Venezuela and Vietnam mark a milestone in TNK-BP's strategic expansion in the global energy market," said Mikhail Fridman, TNK-BP's executive chairman and one of the four Russia-connected billionaires who own the other half of TNK-BP.

The sale also represents the latest pull-back by big western oil companies from Venezuela.

In 2007 US oil giants Exxon Mobil and ConocoPhillips pulled out of Venezuela following socialist President Hugo Chavez's demand for majority control of oil projects, and in March this year Royal Dutch Shell said it and others were shunning the country's licensing rounds.

BP remains in talks with potential buyers for its interests on the North Slope of Alaska, including Prudhoe Bay, and Argentina-based Pan American Energy, sources familiar with the matter said.

The assets are worth around $7 billion and $7.5 billion, respectively, analysts said.

BP shares traded up 0.2 percent at 426 pence at 0915 GMT compared to a 0.1 percent rise in the STOXX Europe 600 Oil and Gas index.

TNK-BP, which produced 1.89 million boe per day in 2009, said it would use its own funds to finance the acquisitions and expects the transaction to be completed by first half 2011.

In Venezuela, the company will buy 40 percent of Petroperija and 26.6 percent of Bouqeronin oil field projects, majority owned by Venezuela's state-owned PDVSA oil company.

It will also acquire a 16.7 percent stake in the Petromanagas upgrader project, which processes tar-like Orinoco heavy crude into lighter synthetic oil that can be processed by traditional refineries.

In Vietnam, TNK-BP will acquire BP's 35 percent stake in an offshore gas condensate project; a 32.7 percent stake in the Nam Con Son gas pipeline and a 33.3 percent stake in the Phu My 3 power plant.

All three of these assets form an integrated gas and power project with a production capacity of 30,000 barrels of oil equivalent per day, on a working interest basis.

BP sells Vietnam energy assets to Russian group

Russia’s third largest oil and gas company TNK-BP announced on
October 18 that the company had reached an agreement to buy assets worth
about 1.8 billion USD from British oil company BP in Vietnam and
Venezuela.

The deal is part of a series of sales BP is making to help pay for oil
spill damages in the Gulf of Mexico. It will be financed entirely by
TNK-BP, which is owned 50-50 by BP and a group of Russian tycoons.

Under the deal, in Venezuela, TNK-BP will buy BP’s 16.7 percent stake
of PetroMonagas SA and 26.7 percent stake of Boqueron SA.

In Vietnam, the company will acquire BP’s 35 percent of stake in a
upstream offshore gas project including Lan Tay and Lan Do gas fields, a
32.7 percent stake in Nam Con Son Pipeline and Terminal, and a 33.3
percent stake in Phu My 3 power plant.

“The
acquisitions in Venezuela and Vietnam mark a milestone in TNK-BP's
strategic expansion in the global energy market,” TNK-BP CEO Mikhail
Fridman said. He also expressed his company’s interest in buying BP
assets in Algeria./.

Related Articles

• Energy group asks for 50% price hike
• PM sets agenda for insolvent shipbuilder
• Assoc insists on power price hike despite protests
• Green cars begin world race
• IFC: Vietnam needs to increase PPP to support economy

IFC to buy 10 percent stake in Vietinbank for 190 mln USD

Vietinbank on Oct.10 agreed to sell a 10-percent stake in the firm to
International Finance Corporation (IFC) for 190 million USD. The deal
makes Vietinbank the first partly equitised State-owned bank to become
part-owned by a foreign strategic investor. It made its initial public
offering 22 months ago.

The price was set by the Government, the Ministry of Finance and the State Bank of Vietnam.

IFC will support Vietinbank with technologies, international business development and management.

Vietnam's largest partly-private lender announced on Oct. 10 its total
assets at the end of August had risen nearly 30 percent from the end of
2009 to 320 trillion VND (16.41 billion USD).

In
the first eight months of this year, the Hanoi-based lender raised more
than 290 trillion VND in deposits and lent 199.5 trillion VND. Its bad
debt stood at 1.05 percent of all loans, below an annual target of 2.5
percent for 2010.

The bank plans to pay a dividend
of 20 percent of its shares' face value of 10,000 VND for 2010, higher
than its initial target of around 15 percent, the statement said,
without giving profit figures for the eight-month period.

Vietinbank expects to increase its charter capital to 23 trillion VND
(1.18 billion USD) by the end of the year, and the figure is slated to
reach 35 trillion VND (1.8 billion USD) next year.

"By helping Vietinbank build up its capacity and strengthen its products
and services, IFC will assist the bank in reaching more small – and
medium-sized enterprises through its nationwide network," said Simon
Andrews, IFC regional manager for Vietnam, Cambodia, Laos, and Thailand.

"The proposed engagement will help Vietinbank
further develop as a leading SME and underlines IFC's support for the
Government's equitisation programme in the financial and banking
sectors."

The Hanoi-based bank also plans to sell a
stake of 15 percent to Canada's Bank of Nova Scotia to raise its
registered capital by 35 percent to 15.1 trillion VND. The deal is
expected to be finalised in December.

Shares of Vietinbank (coded CTG on the HCM Stock Exchange) closed at 18,700 VND per share on Oct.8.

Vietinbank went public in December 2007, becoming the first State-owned bank to do so.

However, it has struggled to find a foreign strategic investor./.

Related Articles

• VietinBank sells 10% stake to IFC
• Developers offer incentives to woo homebuyers
• Hanoi model wins Miss Vietnam 2010
• Asia-Pacific firms worried over carbon laws - survey
• HCMC apartment market beginning to stir: report

Australian bank seeks 20 percent stake in VIB

Commonwealth Bank of Australia (CBA) will seek approval to increase its
stake in Vietnam International Bank (VIB) to 20 percent, according to a
CBA statement quoted by Dow Jones on Sept. 14.

"Consistent
with the strategic partnership agreement signed earlier this year,
Commonwealth Bank intends to request an increase in the VIB investment
to 20 percent at the earliest opportunity – the maximum investment
allowed by the State Bank of Vietnam ," said the statement.

No financial details of the transaction were disclosed.

VIB did to give any comment on the statement but confirmed that all
procedures had been finalised to sell a 15-percent of stake to CBA under
a strategic partnership agreement announced last April.

CBA's acquisition of a 15-percent interest added 600 billion VND (30.8
million USD ) to VIB's charter capital, bringing the total to 4 trillion
VND (205.2 million USD). VIB's assets have also increased by an annual
average of 40 percent over the past five years.

CBA is the
exclusive foreign strategic shareholder of the Hanoi-based bank and was
expected to help VIB improve its performance in such critical business
areas as retail banking, risk management, human resources, IT, and
finance.

Commonwealth Bank has quietly been enlarging its
footprint in Asia over the past decade. It is now one of the leading
international banks operating in Indonesia , and it also has
investments and partnerships in two Chinese banks – Qilu Bank in Jinan
and the Bank of Hangzhou ./.

Related Articles

• Banks scramble for mid-level managers
• Industry sector seeks energy-saving solutions
• AIPA-31 Assembly to boost parliamentary co-operation
• Diamond studded Ao Dai marks 20 years in fashion
• Hanoi model wins Miss Vietnam 2010

IFC to buy 10 percent stake in Vietinbank

Photo: Tuoi Tre

Vietinbank would sell a 10-percent stake to International Finance Corp (IFC) in October for US$190 million, Vietinbank chairman Pham Huy Hung said last week.

The price was set by the Government, the Ministry of Finance and the State Bank of Vietnam.

When the deal is finalized, Vietinbank will be the first partly-equitized State-owned bank to have obtained a foreign strategic investor within 20 months of its initial public offering (IPO).

Vietcombank was the first State-owned bank to go public in December 2007, but it has been struggling since to land a foreign strategic investor.

IFC, a financial arm of the World Bank, also agreed to lend $120 million o Vietinbank over 10 years at six-month LIBOR (London Interbank Offered Rate) plus a fixed margin of 1.5 percent.

Vietinbank also expects to sell another 10-20 percent to Canada's Nova Scotia Bank which will meet with Government representatives next month with the aim to finalize the Vietinbank deal in December.

Vietinbank is also planning to issue 392 million additional shares next month, of which 315.1 million will be offered to existing shareholders and the remaining 76.9 million issued to them as a dividend. The deadline for shareholders to register for participation is September 8.

Shares of Vietinbank (coded CTG on the HCM Stock Exchange) closed up 3.3 percent on Monday to VND22,200 per share.

In the first six months of the year, the Hanoi-based bank reported earnings of VND5.3 trillion ($273 million), of which revenues from business activities accounted for VND659 billion, forex services VND24.16 billion ($1.23 million), and other sources of revenue VND168.7 billion ($8.65 million).

After deducting VND813 billion ($41.69 million) risk provision, the bank posted a net profit in the first half of VND1.6 trillion ($83 million).

Vietinbank expects to increase its charter capital to VND23 trillion ($1.18 billion) by the end of the year, and the figure is slated to reach VND35 trillion ($1.8 billion) next year.

Related Articles

• Hanoi model wins Miss Vietnam 2010
• Civil servants to enjoy State housing
• Less poverty amongst ethnic people in Lam Dong
• FDI flow turns to processing, manufacturing
• Greenback firmer on signs of rising demand

IFC to buy 10 percent stake in Vietinbank

Photo: Tuoi Tre

Vietinbank would sell a 10-percent stake to International Finance Corp (IFC) in October for US$190 million, Vietinbank chairman Pham Huy Hung said last week.

The price was set by the Government, the Ministry of Finance and the State Bank of Vietnam.

When the deal is finalized, Vietinbank will be the first partly-equitized State-owned bank to have obtained a foreign strategic investor within 20 months of its initial public offering (IPO).

Vietcombank was the first State-owned bank to go public in December 2007, but it has been struggling since to land a foreign strategic investor.

IFC, a financial arm of the World Bank, also agreed to lend $120 million o Vietinbank over 10 years at six-month LIBOR (London Interbank Offered Rate) plus a fixed margin of 1.5 percent.

Vietinbank also expects to sell another 10-20 percent to Canada's Nova Scotia Bank which will meet with Government representatives next month with the aim to finalize the Vietinbank deal in December.

Vietinbank is also planning to issue 392 million additional shares next month, of which 315.1 million will be offered to existing shareholders and the remaining 76.9 million issued to them as a dividend. The deadline for shareholders to register for participation is September 8.

Shares of Vietinbank (coded CTG on the HCM Stock Exchange) closed up 3.3 percent on Monday to VND22,200 per share.

In the first six months of the year, the Hanoi-based bank reported earnings of VND5.3 trillion ($273 million), of which revenues from business activities accounted for VND659 billion, forex services VND24.16 billion ($1.23 million), and other sources of revenue VND168.7 billion ($8.65 million).

After deducting VND813 billion ($41.69 million) risk provision, the bank posted a net profit in the first half of VND1.6 trillion ($83 million).

Vietinbank expects to increase its charter capital to VND23 trillion ($1.18 billion) by the end of the year, and the figure is slated to reach VND35 trillion ($1.8 billion) next year.

Related Articles

• Hanoi model wins Miss Vietnam 2010
• Civil servants to enjoy State housing
• Less poverty amongst ethnic people in Lam Dong
• FDI flow turns to processing, manufacturing
• Greenback firmer on signs of rising demand

Petrovietnam reviewing possible bid for BP asset

Photo: AFP

SEOUL - Vietnam's state oil group PetroVietnam is still reviewing whether to bid for BP's stake in a gas project within the country, Vice President Do Van Hau told Reuters on Tuesday.

"We haven't asked the government to approve. We are still considering what we are going to do," he said on the sidelines of a conference in Seoul.

He was speaking in reaction to an online newspaper report early this month that Hanoi-based Vietnam Oil & Gas Group, better known as PetroVietnam, plans to bid for the asset once it obtains government approval.

"We don't have a decision yet. We are reviewing it," he added.

BP plans to sell its 35 percent stake in the Nam Con Son gas project as part of its goal of selling $30 billion in assets over the next 18 months to cover costs for containing the oil spill in the Gulf of Mexico.

PetroVietnam has a 20 percent stake while India's state-run explorer Oil and Natural Gas Corp holds 45 percent.

Indian Oil Secretary S. Sundareshan said late last month that ONGC and PetroVietnam would submit a joint formal offer within weeks to buy BP's asset.

Related Articles

• Work begins on HCMC 2nd metro route
• State President vows to strengthen ties with Laos
• Assoc insists on power price hike despite protests
• PM lauds police for keeping public order
• Foreign sea leases deprive locals of living

Air Mekong plans October launch

Air Mekong, Vietnam’s third private airline, on Sunday received four aircraft from US-based SkyWest Leasing.The local carrier plans to launch its service in October.

The 90-seat Bombardier aircraft will be leased for three years and can be accommodated by most airports in Vietnam.

Air Mekong is seeking approval from the authorities to start flights on October 10 this year linking Ho Chi Minh City and Hanoi with popular tourist destinations in Vietnam, including Da Nang, Nha Trang, Da Lat, Phu Quoc and Con Dao.

Truong Thanh Vu, a senior manager at Air Mekong, said the four airplanes will allow the carrier to operate 28-30 flights every day. He said 40 American pilots have been recruited and 50 flight attendants are being trained.

Vu said a partner wants to buy a 30 percent stake in Air Mekong, but the plan is still pending government permission and thus further details cannot be disclosed now.

The Wall Street Journal reported on August 4 that SkyWest plans to invest US$7 million for a 30 percent stake in Air Mekong.

VietJet Air, the first private airline to be licensed in Vietnam, sold a 30 percent stake to Malaysia’s low cost carrier AirAsia. It was expected to launch its first flight this month, but it has delayed it until the end of this year.

Indochina Airlines, the first private airline to operate in Vietnam, suspended its services earlier this year due to debt problems.

Related Articles

• Air Mekong plans October launch
• Workshop calls for longer-term plans to audit State entities
• Vietnam Airlines plans Dung Quat jet fuel purchase
• Vietnam Air accepts web check-in for int’l flights
• PM sets agenda for insolvent shipbuilder