* A successful bid would make it Vietnam's biggest corporate
* Kuwait Petroleum Corp unit has bid close to $2 bln for the
* Murphy leaning to sell the stake to passive investors
(Adds comments details of Petrovietnam's previous acquisitions
and other bidders)
By Denny Thomas
HONG KONG, Aug 14 Petrovietnam has bid for a
stake in Murphy Oil Corp's Malaysian oil and gas assets,
challenging other suitors including Mitsubishi Corp and
Indian state oil companies, a person with direct knowledge of
the plan said.
The state oil company's bid comes as Vietnam, the third
largest holder of crude oil reserves in Asia, seeks to reverse a
steady decline in its oil output over the past decade. Murphy
Oil and other U.S. oil companies are reducing overseas holdings
as oil and gas exploration prospects improve at home.
Petrovietnam's offer is more than the $1.5 billion bid
placed by the Indian consortium of Oil & Natural Gas Corp
and Oil India Ltd, said the person, who
declined to be identified as the sale process is confidential.
Arkansas-based Murphy Oil - which has interests in oil and
gas fields in Malaysia, Vietnam, Indonesia, Brunei and Australia
- is seeking buyers for a 30 percent interest in its Malaysian
assets, Reuters previously reported.
Petrovietnam's "thinking is that we will be importing more
oil and therefore as a state company we must be involved in oil
production overseas," said Philip Andrews-Speed, an energy
security specialist at Singapore's Energy Studies Institute.
The strategy is similar to that used by other state oil
companies in the region facing declining domestic production,
such as Thailand's PTT Pcl and Malaysia's Petronas
, Andrews-Speed said.
Vietnam's previous overseas exploration forays have usually
been in ex-communist countries like Russia and Venezuela,
although Petrovietnam has existing joint ventures with Petronas
in the Bunga Orkid and Kekwa oilfields.
Vietnam's domestic oil output has peaked as most of its new
discoveries have been gas instead of oil. Vietnam is also facing
trouble in some offshore exploration areas because of competing
territorial claims in the South China Sea.
Last month, China moved an oil rig from disputed areas where
it had been drilling for oil, diffusing some tension between the
two neighbours after one of the worst breakdown in ties since
they fought a brief war in 1979.
If successful, a Petrovietnam purchase of a stake in the
Murphy assets in Malaysia would be Vietnam's biggest ever
corporate acquisition, ahead of French firm Perenco SA's $1.29
billion purchase of ConocoPhillips' Vietnam operations
in 2012, according to Thomson Reuters data.
"They are waking up to the fact other state companies in the
region have left them behind," said the person with knowledge of
Murphy Oil's auction of a portion of its Malaysian assets
has generated interest from other bidders, including from Kuwait
Foreign Petroleum Exploration Co (KUFPEC), which has offered
about $2 billion for the stake, a separate source said.
Murphy is leaning towards selling the stake to passive
investors - or parties who are not rival oil and gas producers -
which could give Japan's Mitsubishi an edge in the sale
process, said other sources with knowledge of the sale process.
Murphy Oil did not respond to an email seeking a response,
sent outside of U.S. business hours.
Petrovietnam chief executive referred Reuters to its
overseas development unit, whose chairman could not be reached
Petrovietnam also did not respond to an official letter
seeking information on its bid for the holding in Murphy's
KUFPEC, a unit of Kuwait Petroleum Corp, did not respond to
emails and phone call seeking comments.
(Additional reporting by Mai Nguyen in HANOI, Jacob Pedersen in
SINGAPORE and Sophie Sassard in LONDON; Reporting by Denny
Thomas; Editing by Tom Hogue)