Statoil withdrawal should not affect Vietnam gas project

Statoil withdrawal should not affect Vietnam gas project

HANOI (DPA): Partners in Vietnam's largest-ever foreign investment said Monday they plan to go ahead with their huge gas project despite Norway state oil company Statoil's recent announcement that it will pull out of the deal.

Statoil admitted last week it was looking to unload its 13.33 percent stake in the 1.3-billion-dollar Nam Con Son offshore gas project, according to local and international reports.

"It doesn't interfere with forward progress in the project," British Petroleum (BP) Hanoi director Ian Sutherland said.

"Although Statoil is pulling out, other parties in the project such as BP have reconfirmed their commitment to the project," Nguyen Dang Lieu, vice general director of state monopoly PetroVietnam, told the Deutsche Presse Agentur (DPA).

He said industry sources have suggested that at least two companies have expressed interest in buying the shares. Reports have put forward U.S. Conoco and Unocal Corp. as likely candidates.

Lieu also said BP, which holds a 26.67 percent stake in the deal and is considered the leader of the foreign consortium involved, would consider buying the Statoil shares.

"We and BP have had talks on this and decided that either or both of us will buy Statoil's share if no other buyers are found," Lieu said.

BP officials said they were open to the idea.

"Yes, we will examine that potential but it's too early to say," said BP's Sutherland.

Statoil's expected pullout came just two weeks after the consortium officially launched the massive project, which was over seven years in the making and whose signing last December was seen as giving a major boost to investor confidence in Vietnam.

PetroVietnam's Lieu said Statoil's intention to sell its stake is a matter of global portfolio consolidation and should not be construed as a signal that Vietnam's investment climate has soured.

The project is expected to tap roughly two trillion cubic feet of gas in the Lan Tay and Lan Do fields in the South China Sea which were discovered in the early 1990s.

A 399-kilometer pipeline will bring the gas ashore to fuel power stations which serve Ho Chi Minh City, Vietnam's largest metropolis.

Besides Statoil and BP, Nam Con Son groups India's ONGC Videsh with 45 percent and PetroVietnam with a 15 percent stake. BP has said it expects the first gas will come ashore by late 2002.