Vietnam wants stake in Delek oil project there

PetroVietnam expressed interest after the exploration was declared to have commercial quantities.

Delek Group Ltd. (TASE: DLEKG) subsidiary Delek Energy Systems Ltd. (TASE: DEOL) is continuing its oil and gas exploration in the South China Sea offshore from Vietnam, even as the company's subsidiaries are busy with the Tamar-1 and Dalit-1 wells offshore from Israel. Now the Vietnamese government wants part of the action.

In a notice to the Tel Aviv Stock Exchange (TASE) today, Delek Energy reports that Vietnam Oil and Gas Group Ltd. (PetroVietnam) (Ho Chi Minh Securities Trading Center: PGS) notified Premier Oil Vietnam Offshore BV that it wants to exercise its option for 15% of the rights to the company's Block 12 W at the Chim Cong (Peacock) concession. The notice was made after the concession was declared commercially viable, on the basis of a production sharing contract (PSC) between the companies.

Under the terms of the PSC, PetroVietnam will refund Premier Oil Vietnam's partners for 15% of the cost of the well so far, each partner on the basis of its share. Payment will be made by deducting each partner's share in the oil and gas produced at the concession from PetroVietnam's share.

Delek Energy currently owns 25% of Premier Oil Vietnam Offshore. Other partners are Premier Oil plc (LSE: PMO) and Santos International Holdings Pty Ltd. (ASX: STO), with 37.5% each. After PetroVietnam acquires 15% of the company, Delek Energy's share in it will fall to 21.25%, and Premier Oil and Santos will each own 31.88%.

Published by Globes [online], Israel business news - - on April 23, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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