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

18th October 2010, Comments 0 comments

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 1.8 billion dollars.

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 dollars (21.2 billion euros) 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 one billion dollars will be made by October 29 with final payment upon completion.

"Subject to government approvals and the fulfillment 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.

In Vietnam, TNK-BP will acquire from BP a 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.

© 2010 AFP

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