Norway's state oil company Statoil said yesterday it would pull out of the $1.5 billion Nam Con Son offshore gas project in Vietnam, with plans to sell off its 13.33 per cent stake. The announcement comes just days after the foreign consortium operating Nam Con Son formally launched the project which will tap natural gas from the Lan Tay and Lan Do fields in southern Vietnam.

"We have notified our partners in the project and the Vietnamese authorities that we are considering selling our operations in the country," Statoil public
affairs manager Kristofer Hetland told Reuters. He was confirming a report in industry newspaper Upstream.

"Several companies have expressed interest in taking over Statoil's share in the Nam Con Son project," he said. Hetland declined to give details but industry sources said two companies which were likely to show interest in Statoil's stake could be U.S. Conoco and Unocal Corp both of which are active in Vietnam.

Conoco, with interests in five Vietnamese offshore blocks, plans to become a significant player in South-East Asia's oil and gas business. Unocal has two gas production sharing contracts with Petrovietnam and is in the process of purchasing a third interest held by Spain's Repsol.

Hetland also declined to specify the value of Statoil's share of the reserves although Upstream cited an independent estimate of more than $100 million.
The sale will effectively bring to an end Statoil's operations in the Far East, leaving only a trading office in Singapore. Last week it agreed to sell its
Malacca refinery in Malaysia to Petronas and Conoco.

"Statoil's upstream strategy entails strengthening our group's position in countries where we may become a core operator and Vietnam is not such a country," Hetland said. "We intend to concentrate on our operations in Venezuela, West Africa, Northwest Europe and the Caspian basin."

Besides Statoil, Nam Con Son groups BP with a 26.67 per cent stake overall, India's ONGC Videsh with 45 per cent and Petrovietnam with 15 per cent. The project has been trumpeted as the largest foreign investment project in a country that has seen many investors leave citing frustration with bureaucracy and cumbersome fiscal practices. The consortium estimates Nam Con Son has reserves of 59 billion cubic metres, with first gas likely to be pumped in 2002.