India is interested in acquiring the stake in the Nam Con Son gas project in Vietnam, which British energy giant BP Plc is selling as part of its efforts to raise resources to fund the cost of the Gulf of Mexico oil spill, petroleum minister Murli Deora has said.

ONGC Videsh Ltd (OVL) the overseas arm of Oil and Natural Gas Corporation (ONGC), holds 45 per cent participating interest in the block with BP holding 35 per cent and PetroVietnam, NOC of Vietnam, holding 20 per cent. The consortium of OVL, BP and PV produces about 12-14 MMSCMD per day supporting about 30 per cent of power generation capacity of Vietnam. Given its importance, the government of Vietnam had declared the project as one of the projects of national importance in Vietnam.

The Indian government has approved capital investment of about $378 million by OVL in the project. In addition, ONGC Videsh Limited was awarded two exploration blocks under production sharing contract in June 2006, in the Phu Khanh offshore basin, where exploration work is being conducted.

Petroleum minister Murli Deora who is on a visit to Vietnam, said India is looking to buy the BP's stake in the $1.3 billion Nam Con Son gas project.

Deora is in Hanoi on the invitation of his counterpart Vu Huy Hoang, to participate in the East Asia energy ministers' meeting. Besides, bilateral discussions with the Vietnamese minister, Deora is also scheduled to have separate bilateral meetings with other ministers participating in the conference.

Deora, who is leading a high level delegation comprising officials of the petroleum and natural gas ministry and CEOs and chairmen of state-owned oil companies, ONGC, ONGC Videsh Ltd, Indian Oil Corporation and GAIL India Limited, will call on Vietnam's prime minister Nguyen Tan Dung.

ONGC Videsh has been working in Vietnam since 1988, when it signed the production sharing agreement for Block 06.1 - which reported the largest natural gas discovery in 1989. This was later developed to deliver gas to a shore-based power project in Vietnam.

Speaking on the eve of his departure to Vietnam, Deora had mentioned that the government was considering various models of participation such as direct anchoring and collaborative engagement to enhance the reach of Indian petroleum companies with comprehensive government support, and that the current visit was a step in that direction.

India historically has strong relationship with Vietnam and both sides have taken deep interest in each other's economic development. Given the cordial relations, ONGC Videsh Limited was assigned Block 06.1, through government-to-government interactions on nomination basis on 19 May 1988. This block in Vietnam also happens to be the first equity oil and gas project of OVL.

Vietnam's first struck oil and gas in 1974 and 1975 and started commercial production in 1986. The country's current production is about 345,000 bpd of crude oil and liquids and the country is a net exporter of crude.

The country formulated a new Petroleum Law in 2000 when the exploration industry of Vietnam picked up pace and since then had awarded petroleum blocks in various rounds of auction.

Japan's VRJ Petroleum, Canada's Talisman and Premier have announced oil and gas discoveries in Vietnam blocks and these have generated fresh interest in the hydrocarbon sector of Vietnam. Besides oil and gas, Vietnam has interest in developing its gas, petrochemicals and refining sectors as well.

Indian petroleum companies like OIL, IOC and GAIL are now focusing on the area and are in the lookout for opportunities for participation. Indian companies may offer to join their counterpart in Vietnam to work together in areas of mutual benefit in Vietnam and in third counties.