(EnergyAsia, November 1 2010, Monday) — BP said it has agreed to sell its upstream businesses and associated interests in Venezuela and Vietnam to TNK-BP for a total of $1.8 billion. TNK-BP, Russia’s third largest oil company, is owned equally by BP and the AAR consortium comprising Alfa Group, Access Industries and Renova.

The agreement includes BP’s interests in the Petroperijá, Boquerón and PetroMonagas joint ventures in Venezuela and, in Vietnam, BP’s 35% operating interest in the Lan Tay and Lan Do gas fields and associated pipeline and power generation interests.

The sales are part of BPs plan, announced in July 2010, to divest up to ÚS$30 billion by the end of 2011 to help pay for damages arising from the recent Gulf of Mexico oil spill.

TNK-BP has agreed to pay BP US$1.8 billion in cash, subject to certain post-closing adjustments. TNK-BP paid BP a deposit of US$1 billion on October 29, with the balance due on completion of the sales. The deal is expected to be completed in the first half of 2011.

BP said it will retain an economic interest in these assets through its 50% interest in TNK-BP.

BPs interests in the Vietnamese assets include a 35% interest in offshore block 06.1, currently operated by BP, approximately 370 km offshore south-east Vietnam and containing the Lan Tay and Lan Do gas fields.

The company also has a 32.67% interest in the 370 km Petrovietnam-operated Nam Con Son pipeline that delivers gas onshore from the Lan Tay and Rong Doi fields, and a 33.3% interest in the joint venture that owns and operates the 739MW Phu My 3 power plant in Baria Vung Tau province.

BP’s net entitlement to production from Vietnam is approximately 15,000 boe per day.

Bob Dudley, BP group chief executive, said the agreement provides evidence of the “rapid progress” the company is making towards the divestment target set out in July.

“These are robust businesses which offer both existing production and potential opportunities for future growth. We believe they will offer TNK-BP a solid foundation as it builds its business outside Russia,” he said.

Mikhail Fridman, CEO of TNK-BP, said:

“The acquisitions in Venezuela and Vietnam mark a milestone in TNK-BP’s strategic expansion in the global energy market. Our company’s ambitious yet highly focused and disciplined diversification provides TNK-BP with an excellent platform for further growth and profitability, while also helping develop new competencies that can be applied at home.

“Given Russia’s strong relationships with Vietnam and Venezuela, we are sure that this transaction will create significant value both for TNK-BP and our local partners.”

So far, BP has announced agreements to sell assets in Egypt, Canada and the USA to Apache Corporation for US$7 billion and to sell its Colombian exploration, production and transportation business for $1.9 billion.