ConocoPhillips, the third-largest US oil company, signed a deal late last week to sell its Vietnam business units for US$1.29 billion to Anglo-French oil and gas explore Perenco SA.

The deal includes ConocoPhillips' three wholly-owned subsidiaries in Vietnam, which hold a 23.25 percent interest in Block 15-1, a 36 percent interest in Block 15-2 and 16.3 percent interest in the Nam Con Son pipeline.

Block 15-1 and Block 15-2 are located in the Cuu Long Basin, in the south-east of southern Ba Ria – Vung Tau Province. The Nam Con Son gas pipeline project is also operated in Ba Ria – Vung Tau Province.

The sale of the Vietnam business unit is part of ConocoPhillips' strategy to generate value for shareholders through a continued focus on optimising the portfolio, enhancing returns, strengthening financial flexibility and increasing shareholder distributions, ConocoPhillips said in a statement.

"The sale of our Vietnam business unit is an important component of our 15-20 billion USD asset divestiture programme during 2010-12. ConocoPhillips has conducted business in Vietnam for more than 15 years, and we are pleased that Perenco has recognised the value of these quality assets," said Al Hirshberg, senior vice president, Planning and Strategy, ConocoPhillips.

For the 2010-11 period, ConocoPhillips' asset divestiture programme yielded 10.7 billion USD in proceeds, in addition to 9.5 billion USD from LUKOIL share sales, giving a total of 20.2 billion USD over this period.

Pavel Molchanov, a Houston-based analyst with Raymond James&Associates told Bloomberg that ConocoPhillips' stake in Vietnam may not have been meaningful enough for the company.

"It's a country where there is growth potential, but it's fairly difficult for Western majors to perhaps navigate it," said Molchanov, who has a "market perform" rating on ConocoPhillips shares and doesn't own any. Molchanov, speaking in a telephone interview, called the sales price "reasonable."

On a conference call in January 26 with analysts and investors, ConocoPhillips CFO Jeff Sheets did not comment on the Vietnam sale and denied rumours that the company was looking for a partner for its South Texas' Eagle Ford properties.

HSBC Securities (USA) acted as financial adviser to ConocoPhillips for the sale. Perenco didn't use any outside financial adviser.

ConocoPhillips had reached the equivalent of about 20,000 barrels a day of oil production from Vietnam last year, out of a world-wide daily output of 1.62 million barrels, according to data on its website.

The integrated energy company has interests around the world, and is based in Houston. The company had approximately 29,800 employees, 153 billion USD of assets, and 245 billion USD of revenues as of December 31, 2011.

ConocoPhillips also plans to spin off its refining business next quarter into a new company called Phillips 66 to focus on oil and natural gas exploration and production.

Paris-based Perenco produces oil and natural gas, operating in 16 countries across northern Europe, Africa, South America and the Middle East.-VNA