India, Vietnam cosy up on idea to bid jointly for BP's assets

India and Vietnam will jointly pitch for taking over the energy assets of crisis-hit BP Plc in the South Asian country, with Hanoi stressing that the British firm must give its partners priority in the stake sale.

India's flagship explorer ONGC Videsh, backed by sister public sector company Oil India Ltd and Vietnam's national oil firm PetroVietnam, will make a joint bid for BP's 35 per cent stake in offshore gas block 06.1, Oil Minister Murli Deora said here.

Under its contract with Vietnam, BP has to give first preference to existing partners in the block. OVL has a 45 per cent stake in the gas block, while PetroVietnam holds the remaining 20 per cent.

"Absolutely, 100 per cent we are going with PetroVietnam. There is no question of going alone," Deora said after meeting Vietnamese Prime Minister Nguyen Tan Dung, where the two appeared to have cosied up to splitting the British firm's stake between them.

India is also keen on getting a slice of BP's stake in a 371-km-long pipeline that transports gas from the fields and a power plant which uses it to produce electricity. India currently has no stake in the pipeline or the power plant.

"I had a very good meeting where the Vietnamese Prime Minister agreed with our proposal to takeover BP's interest (in an offshore gas field, a pipeline and a power plant -- together known as the Nam Con Son project)," Deora told PTI here.

"He was supportive and asked us to work out details (of the bid)," he said without further elaboration.

Both OVL and PetroVietnam are keen to acquire BP's stake in the fields that currently produce about 14 million standard cubic metres of gas per day. "They are also interested and we will be working together with them on this," he said.

Vietnam Deputy Minister of Industry and Trade Do Huu Hao earlier said BP must give priority to its partners in the sales of stakes in Vietnam assets before making offers to outside parties. In all likelihood, OVL and PetroVietnam may arrive at an understanding to divide BP's stake between themselves.

"We are open to taking 1 per cent to 35 per cent stake," Deora said. "Since (India's first Prime Minister Jawarhal) Nehru to (former prime ministers) Indira Gandhi and Rajiv Gandhi and now (UPA Chairperson) Sonia Gandhi, India has always supported Vietnam. We have very good relations with them and we will be happy to extend our relationship."

Besides the offshore fields, BP also has a 32.33 per cent stake in a 371-km-long pipeline, built at a cost of USD 565 million, that ships the gas produced from the fields to onshore power plants. ConocoPhillips (16.7 per cent) and PetroVietnam (51 per cent) are the other partners in the pipeline.