Rosneft to sell Vietnamese assets to Russian compatriot: press
Rosneft has agreed to sell its interests in two offshore gas and condensate projects and a related pipeline in Vietnam to fellow Russian producer Zarubezhneft, the former company told Russian news agency Interfax on May 4.
Zarubezhneft is undertaking due diligence for the purchase, which is expected to be closed by the end of June, a Rosneft representative said. Neither company has disclosed the deal's financial details.
Rosneft operates block 06.1 in Vietnam's section of the South China Sea with a 35% interest, with India's ONGC Videsh and Vietnamese national oil company Petrovietnam serving as its partners. The block contains the Lan Do, Phong Lan Dai and Lan Tay gas and condensate fields, estimated to hold 69bn m3 of initial gas resources. They produced around 3.2bn m3 of gas in 2020.
The Russian company also has a production-sharing agreement for block 05.3/11 located near 06.1. It began a drilling campaign in the area in 2016 but has not announced any discoveries. Its Vietnamese portfolio also includes a 33% stake in the 370-km Nam Con Son pipeline that flows gas and condensate from 06.1 to the shore. The pipeline's other shareholders are Petrovietnam, with a 51% operating interest, and France's Perenco, with a 16% shareholding.
Rosneft entered Vietnam in 2013 through the takeover of Anglo-Russian group TNK-BP. The planned sale follows its divestment of several weaker-performing upstream businesses in Russia over the past year. The company is pruning its portfolio of lower-margin assets to boost earnings and raise cash for the Vostok Oil project it is developing in the Arctic, which CEO Igor Sechin has claimed could one day produce over 2mn barrels/day of oil and up to 50mn metric tons/year of LNG.
Zarubezhneft is already active in Vietnam, with shareholdings in blocks 16-1/15, 42, 12/11, 04-3, 04-1, 09-1, 09-3 and 09-3/12. The country represents its main focus outside of Russia, where it produces oil and gas in the northern Nenets region. Zarubezhneft also entered Indonesia in January, after farming into the Tuna oil and gas project operated by Harbour Energy.