Vietnam Oil & Gas Group, known as PetroVietnam, said it submitted a bid this week to buy all of ConocoPhillips's energy assets in Vietnam to boost production.
"It would be very good if we can have the assets, but we will not buy them at any cost," Nguyen Tien Dung, deputy chief executive of the state-owned company, said in an interview from Hanoi Tuesday, declining to disclose the size of the bid.
John Roper, a ConocoPhillips spokesman, said in an e-mail Wednesday that it's the company's policy "to not provide any comments during the bidding process."
ConocoPhillips, the third-largest US oil company, said last month its asset sales may expand to as much as $10 billion in 2012 from about $4 billion this year as it seeks to fund share buybacks and future growth. The company plans to sell its stake in three oil and natural-gas assets off Vietnam's coast as part of the divestiture program.
PetroVietnam will borrow from domestic and international banks to fund part of the purchase should it win the bid, Dung said. The assets are valued at about $1.5 billion, Paul Sankey, a Deutsche Bank AG analyst, said in an April 27 note to clients.
The company will finance the purchase with this year's earnings that may reach VND55 trillion ($2.6 billion), Vietnam News Agency reported on Tuesday, citing Chief Executive Officer Do Van Hau.
PetroVietnam, based in Hanoi, is targeting production of 23 million to 24 million metric tons of oil annually by 2015, according to a statement on the government's website in August. Crude output reached 11 million tons in the first nine months this year and may total 4 million tons in the fourth quarter, the company said on Tuesday.
ConocoPhillips, based in Houston, holds a 23.3 percent stake in a cluster of five fields in Block 15-1 in the Cuu Long Basin, data on its website show. It has a 36 percent share of the Rang Dong field in Block 15-2, also in the basin.
It is also offering its 16.3 percent stake in the Nam Con Son gas pipeline, a 700 million cubic-feet-a-day link connecting the Nam Con Son Basin with southern Vietnam.
PetroVietnam has a 50 percent stake in Block 15-1, with ConocoPhillips, Korea National Oil Corp., SK Corp. and Geopetrol holding the rest, according to ConocoPhillips's website.
Japan Vietnam Petroleum Co. has a 46.5 percent share of Rang Dong field, while PetroVietnam holds a 17.5 percent stake. ConocoPhillips owns the rest, the data on its website show.
The Vietnamese state oil company has a 51 percent stake in the Nam Con Son pipeline. BP Plc in October agreed to sell its 32.7 percent stake in the pipeline to Moscow-based TNK-BP.