OREANDA-NEWS. November 11, 2010. BP announced in a report it has received USD 1 bn from TNK-BP for assets in Venezuela and Vietnam. The total cost of the deal is USD 1.8 bn, with the remaining funds to be paid after it has been closed in the first half of 2011, reported the press-centre of TNK-BP.

In Venezuela, TNK-BP is buying interests in oil assets, while in Vietnam the acquisitions are in infrastructure projects and the gas sector. The deal was discussed during a visit to Vietnam by President Dmitri Medvedev, and on Sunday the Russian Ministry of Energy and the Vietnamese Ministry of Industry and Trade signed a memorandum of understanding on the subject. But the future of the deal depends largely on the position of a third party – the Indian company ONGC. TNK-BP Board Executive Chairman Mikhail Fridman spoke to “Kommersant” about the current status of negotiations and the situation around the acquisition of BP’s Algerian assets.

— Have you felt the support of the government for your acquisition of BP’s assets?
— On both Venezuela and Vietnam we have received full and unconditional support from the country’s leaders. And not only in the energy sector — I mean Vice Premier Igor Sechin and Energy Minister Sergey Shmatko, who are always working on these issues — but also from the very top — President Dmitri Medvedev and Prime Minister Vladimir Putin.

— But in Vietnam the documents were not signed by the top officials, and Sergey Shmatko said some difficulties had arisen. There was much more pomp and circumstance around the signing with Venezuela.
— With Venezuela the signing was also at the ministry level, but there was more time there to prepare the agreement. In Vietnam the draft memorandum between the Russian Energy Ministry and the Vietnamese Ministry of Industry and Trade was received three days before Dmitri Medvedev’s visit. In bureaucratic terms that’s not long enough, because in Vietnam everything is decided at the level of the Politburo, where decisions are taken by a collective body rather than by a single person. When our people arrived there was a high level of uncertainty that the memorandum would be signed. We didn’t expect to get the protocol signed by the two ministries at such short notice.

The credit for this achievement definitely goes to President Medvedev. At the very last moment, once the official events were all over, during unscheduled time he got the relevant Vietnamese minister to sign the document. With the Venezuelan assets, Ugo Chavez’s consent basically opened the way for all the documents to be signed quite quickly in the presence of both Presidents.

— Nonetheless, the future of the deal is still not entirely clear, because India’s ONGC and PetroVietnam retain preferential rights to buy BP’s Vietnamese assets.
— PetroVietnam has assured us that they do not intend to exercise their priority right to acquire the BP assets. We have not yet held negotiations with ONGC at a serious level, but we have been in contact with company representatives.  We have made them aware of our position that we would like to be part of this project. ONGC has its own plans and interests, including some in Russia. I’m confident that our partners want their relationships with Russian companies to be constructive and mutually beneficial. 

— Are you willing to offer ONGC a role in one of your projects in Russia in exchange for a waiver of their preferential rights?
— TNK-BP and ONGC always have a wide range of potential joint projects and other opportunities for collaboration.

— How long does ONGC have to give its answer?
— Two months from the signing of our agreement with BP.

— What’s the status of the negotiations to acquire BP’s Algerian assets?
— In Algeria the national company Sonatrach and Norway’s Statoil are involved in the project. Basically, in every country in the initial stage the local partner has to agree to grant TNK-BP access to project information, because this information is confidential. The Algeria project is still in stand by position — we have not yet been granted the right to view the data.

— Is this a technicality or has Algeria still not taken a final decision?
— It looks like they themselves have not yet made their minds up. This issue was also raised during a recent visit by President Medvedev to Algeria. They said it would take several months. In Venezuela and Vietnam things are moving faster. We don’t need a lot of time to agree things with BP, because we have a lot of former BP employees working for us who understand the details of these projects quite well. And when you have good relations on the horizontal level it’s easy to negotiate.

— Are you planning to buy any other international assets in the near future?
— For the moment these deals represent the first phase of TNK-BP’s international expansion strategy. We’re not going to rush into things. The main task today is to build an efficient system for managing projects beyond our traditional markets.