REFILE-DEALTALK-BP’s Vietnam gas project on dealmakers’ radars

(Refiles to tweak headline)

(For more Reuters DEALTALKS, click [DEALTALK/])

* BP could sell $1.3 bln Nam Con Son Vietnam venture

* Asian giants ONGC, PTTEP, CNOOC likely to show interest

* Asset includes gas fields, power station and pipeline

By Joseph Chaney and Sui-Lee Wee

HONG KONG, July 12 (BestGrowthStock) – Of all the BP (BP.L: ) units
that Asian buyers may be eager to scoop up across the globe, an
asset closer to home in southern Vietnam could evoke the most
immediate interest.

Asia’s energy investment bankers are busy doing their
homework on BP’s stake in the $1.3 billion Nam Con Son gas
project offshore of Ho Chi Minh City.

China’s CNOOC (0883.HK: ) (CEO.N: ) and Sinopec (0386.HK: )
(600028.SS: ) (SNP.N: ), as well as Thailand’s PTTEP (PTT.BK: ) and
India’s ONGC (ONGC.BO: ) — already a partner of BP’s in Vietnam
— are likely to show interest in BP’s stake in the project,
bankers and analysts who are familiar with the asset told
Reuters.

BP, among the biggest foreign producers of natural gas in
Vietnam, discovered four gas fields in the southern part of the
country roughly 20 years ago. The British giant also has a
gas-fired power station and a pipeline there. Together, they
are known as Nam Con Son, Vietnam’s largest gas project.

If and when Nam Con Son will be put on the auction block
remains to be seen. But some bankers say Asian interest will be
strong, especially from Thailand and India, who have regional
ambitions but often play second-fiddle to China’s outbound M&A
dealmaking prowess.

A BP spokeswoman in Vietnam declined to comment when
contacted by Reuters. CNOOC spokesman Xiao Zongwei also
declined to comment, and Sinopec declined to confirm any
interest in Nam Con Son. Officials from ONGC were not
immediately available for comment.

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For full spill coverage: http://link.reuters.com/hed87k

For a FACTBOX on Vietnam’s political risks: [ID:nRISKVN]

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The British oil company announced a $10 billion asset sales
program in June as part of a broader set of moves designed to
ease pressure from the U.S. government. [ID:nN15112656]

“If they (BP) want to make $10 billion through asset
divestitures — it’s a discreet field and there will be a lot
of buyers for it,” said an Asia-based investment banker who has
advised Chinese energy companies on outbound deals.

The banker, who was not authorised to speak publicly about
the matter and declined to be named, added that investment
bankers from multiple banks are busy doing due diligence on Nam
Con Son, and are trying to convince BP that the project would
be an easy asset to sell.

“We haven’t looked at it yet as BP hasn’t opened the bid
officially,” PTTEP CEO Anon Sirisaengtaksin told Reuters.

“But (we) heard people say it wants to sell non-core
assets.”

FLAT GROWTH

Vietnam’s relatively small status as an oil producer and
flat production growth over the last five years means Nam Con
Son is unlikely to attract global players such as Exxon Mobil
(XOM.N: ) and Chevron (CVX.N: ), some analysts say.

“With crude reserves of 4.5 billion barrels, the potential
there is moderate,” said Neil Beveridge, a Hong Kong-based
senior oil analyst at Sanford Bernstein.

“While I expect to see a bit of (production) growth going
forward, I don’t think it has the potential to yield the large
discoveries that would attract the supermajors.”

U.S.-based ConocoPhillips (COP.N: ), Korea National Oil Corp.
and Malaysia’s Petronas [PETR.UL], have all flocked to invest
in Vietnam, even though the southeast Asian frontier market is
deemed to be risky and opaque for investors.

Analysts say Chinese oil majors could also come up against
political opposition in Vietnam, where suspicion of China runs
high due to the territorial disputes between the countries in
the South China Sea.

BP has multiple partners in the Nam Con Son project. The
exact breakdown of its ownership stake in each portion of the
project was not immediately clear. Government-run PetroVietnam
is also a partner in the project. BP’s website says the project
is worth $1.3 billion.

The assets are considered a high-quality venture that BP —
desperate to raise cash for its colossal $20 billion clean-up
bill — could easily drum up interest among Asia’s energy
giants, many of whom are eager to expand into Southeast Asia.

“ONGC and PTTEP are possible,” Sanford Bernstein’s
Beveridge said. “They are active in Vietnam and are always
looking for overseas assets.”

Elsewhere, chatter is growing louder that the British giant
is seeking deals in other parts of the world.

On Sunday, a source told Reuters that BP is in talks with
U.S. oil and gas company Apache Corp (APA.N: ) and other
companies over potential asset sales, but added those sales are
still at an exploratory stage [ID:nN11156383].

Also mentioned in media reports and analyst notes as
potential disposals: BP’s partnerships in Venezuela, its 60
percent stake in Argentina’s Pan American Energy and its stakes
in the Cusiana and Cupiagua fields in Colombia.

CNOOC, China’s largest offshore oil producer, is seen as an
interested party for BP’s Pan-American stake after it bought a
20 percent holding when it agreed in March to pay $3.1 billion
for half of BP’s partner, Bridas Corp.

CNOOC’s bigger peer PetroChina (0857.HK: )(601857.SS: ) (PTR.N: )
is “open to closer ties” with BP, but declined to give
specifics about involvement in asset sales, PetroChina’s head
of investor relations Mao Zefeng told the Financial Times in an
article published on Monday.
(Additional reporting by Pisit Changplayngam in BANGKOK, Ho
Binh Minh in HANOI, and Pratish Narayanan in MUMBAI; Editing by
Michael Flaherty and Muralikumar Anantharaman)

REFILE-DEALTALK-BP’s Vietnam gas project on dealmakers’ radars