BP Plc.’s new chief executive Robert Dudley is expected to arrive in India on 4 October, having taken charge of the company following the departure of his predecessor Tony Hayward.
The visit assumes significance as BP is looking at selling an interest in some fields to fund its Gulf of Mexico oil spill liability.
Exploring options: Indian firms seek to discuss buying BP’s stake in Vietnam gas project when CEO Robert Dudley arrives on 4 October. Michael Fein / Bloomberg
India’s ONGC Videsh Ltd (OVL) wants to buy BP’s 35% stake in the $1.3 billion (Rs 5,850 crore) Nam Con Son gas project in Vietnam. OVL has a 45% stake in the block, with BP and PetroVietnam holding 35% and 20%, respectively. The project comprises two offshore gas fields, a power project and a pipeline.
While Rajeev Kumar, vice-president, BP India, declined to comment on the issue, a government official who did not want to be identified confirmed the visit and said: “Their CEO is coming. There are other issues as BP is also looking at downstream opportunities in the country. The Vietnam opportunity is one of the many things.”
BP is battling a crisis following the sinking of the Deepwater Horizon oil rig that created the worst offshore oil spill that the world has seen.
India’s petroleum minister Murli Deora recently visited Vietnam and evinced interest in acquiring BP’s stake. “This is a great opportunity for us. The gas fields were originally allocated to us, but due to the foreign exchange crisis of (the) 1990s, we had to farm out some stake to BP. We will like to get back that stake,” Deora had said during his visit.
According to the BP Statistical Review of World Energy, India’s primary energy consumption in 2009 was 469 million tonnes (mt) of oil equivalent, or 4.2% of global consumption.
While the world’s oil consumption declined 1.7%, or 1.2 million barrels per day, on account of the global economic slump, it grew in countries such as India and China.
The Congress party-led United Progressive Alliance government has decontrolled petrol prices and has also left further price changes, in line with movements in the international price of crude oil, to the oil firms. This has created interest on the part of the overseas firm to look at opportunities in the Indian downstream sector. OVL has 39 projects in 16 countries, with nine producing assets in seven countries, namely Sudan, Russia, Vietnam, Syria, Brazil, Columbia and Venezuela.
While OVL produced around 8.87mt of oil and equivalent gas in fiscal 2010, it aims to acquire 20mt a year of oil and equivalent gas by 2020.
India is looking to build up resources to shore up energy security, given that it imports 80% of annual consumption. The country’s oil import bill shot up 26% to Rs 3.4 trillion in 2008-09.
The consumption of petroleum products has grown at a compounded annual growth rate of around 4% in the last seven years. By 2030, the country will import 90% of the fuel it needs.
PTI contributed to the story