TNK-BP signs up for Vietnam supply

TNK-BP has signed up to supply PetroVietnam 100 thousand tonnes of ESPO brand oil, for one year starting from November, with the company saying it’s a step on the road to closer energy cooperation with Vietnam.

The one year supply contract was signed off by TNK-BP Deputy CEO, Maxim Barsky, and the General Director at PetroVietnam Oil, Nguyen Xuan Son. Deputy Vietnamese Prime Minister Hoang Trung Hai described cooperation in the field of oil and gas as the foundation of economic relations between his country and Russia and expressed hope that it would develop further.

“The agreement to supply TNK-BP oil to Vietnam is only the first step in relations between the two countries”

PetroVietnam has also offered TNK-BP the opportunity to take part in a parity joint venture that will include a $3.5 billion oil refinery in Vietnam and some of Russia's oil fields. Nguyen Xuan Son added that more projects could be in the offing.

"Our country is ready to open other Vietnamese enterprises for TNK-BP."

Maxim Barsky added that PetroVietnam is interested in playing a role in the development of all TNK-BP deposits where the product can be shipped by the East Siberia – Pacific Ocean pipeline (ESPO) system. TNK-BP also says it is considering buying new fields in Vietnam as it looks to expand its operations outside Russia, with Barsky adding the agreement moves the company into the international arena, and particularly the fast growing Asian region.

“The contract for oil supply to Vietnam is an important step in establishing a long-term presence of TNK-BP in the Asia-Pacific region. Expansion of the operations on the new markets is a necessary condition for the development of the company as a major international player.”

Speaking in Moscow to Business RT, TNK-BP Sales Vice President, Jonathan Kollek added that moving into the Vietnamese market alone constituted a valuable strategic asset.

“It opens a new partnership in one of the most dynamically growing economies of the world. The east is the driving economy of growth, and Vietnam is one of the most dynamic economies in the east. By 2025, they say that it will be the most dynamic economy, with a growth of 10% per year. So a partnership with them, for us, is strategic, a valuable asset.”

Phung Dinh Thuc President and CEO of PetroVietnam said that after thirty years of successful performance on the oil and gas Vietnams market the company looks forward to expand its foreign cooperation.

"We are moving onto foreign markets, including Russia's, and are counting on the support of TNK-BP, with whom we intend to work in geological prospecting, extraction, and refining"

TNK-BP is also mulling the possibility of purchasing BP assets in Vietnam in the context of its association with PetroVietnam, and is interested in being involved in the development of deposits located near BP assets.