PetroVietnam, Zarubezneft to Bid for Kazakhstan Oil Field

Dow Jones Newswires

HANOI, Dec 03, 2006 (Dow Jones Newswires)

State-owned PetroVietnam will join forces with Russia's state-run oil company Zarubezneft to bid for a stake in Karazhanbas oil field in Kazakhstan as early as next year, a Petrovietnam official said.

Unlisted PetroVietnam and state-owned Bank for Investment and development of Vietnam, or BIDV, hopes to invest $125 million in a 25% stake in the field, said the official, who declined to be named.

"The Vietnamese companies will join Russia's Zarubezneft to bid for production rights in the Karazhanbas field in 2007," the official said.

Karazhanbas is estimated to contain 160 million metric tons of oil reserves.

Zarubezneft has a strong presence in Vietnam, being the largest foreign investor in its oil and gas industry. The Russian company has a 50% stake in Vietsovpetro, which is the largest joint venture company in Vietnam and controls about 70% of its annual oil production, the official noted.

In addition, PetroVietnam will work with BIDV on preparing loans totaling $1.5 billion that will be offered to other investors in the Kazakhstan oil field, the Dau Tu (Investment) newspaper reported Monday.

It said BIDV will help PetroVietnam prepare a global bond issuance to raise the $1.5 billion needed to fund those loans.

The newspaper, which is published by the Ministry of Planning and Investment, didn't name the other investors or say why Vietnam has to offer loans to competing bidders.

PetroVietnam and BIDV officials contacted refused to give details on their Kazakhstan and global bond plans.

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