Medvedev to Oversee Deals on Nuclear Plant, BP Assets in Hanoi

Russia plans to build Vietnam’s first nuclear power plant and buy BP Plc’s assets in the Southeast Asian country as President Dmitry Medvedev travels to Hanoi seeking to revive ties with the former Soviet ally.

Medvedev begins the two-day trip tomorrow with a delegation that includes Sergei Kiriyenko, head of the state nuclear holding company Rosatom Corp., OAO Gazprom Chief Executive Officer Alexei Miller and TNK-BP Executive Director German Khan, said Sergei Prikhodko, the president’s foreign policy aide.

Russia’s influence in Vietnam has waned as political and military ties dwindled after the collapse of the Soviet Union. Vietnam now regards the U.S. as its main investor and partner, said Dmitry Mosyakov, head of the Southeast Asia, Australia and Oceania Center of the Moscow-based Institute of Far East Studies.

“Medvedev’s visit will be successful; Vietnam needs good relations with Russia,” Mosyakov said. “But there may be serious problems when it comes to turning Vietnam into a strategic ally, since they seem to have chosen a different ally. It’s premature to say Russia will enjoy a big comeback in the region.”

The focus of Medvedev’s visit is on trade, economic relations, investment and cooperation in the banking sphere, Prikhodko told reporters in Moscow yesterday. The Russian leader will also attend a summit of the Association of Southeast Asian Nations.

Nuclear, Hydro Plants

Russia plans to sign an accord to build a nuclear power plant in Vietnam, the first of as many as 13 the country plans by 2030. Russia is ready to consider financing the project, Prikhodko said.

OAO RusHydro, Russia’s biggest producer of renewable energy, and Vietnam Oil & Gas Group, also known as PetroVietnam, plan to sign a preliminary agreement on building a hydropower plant in the country, Prikhodko said.

Vietnam is developing new sources of energy to meet demand from its increasingly wealthy population of 86 million. The government forecasts that economic growth will quicken to as much as 8 percent annually through 2020. Residents of cities including Ho Chi Minh City, the nation’s largest, and the capital Hanoi, are subject to periodic daylong power cuts.

The two countries will also sign an accord supporting the sale of BP’s assets in Vietnam to TNK-BP, the British oil producer’s Russian venture, Prikhodko said.

BP Assets

BP, seeking cash to cover costs linked to the Gulf of Mexico oil spill, agreed this month to sell assets in Venezuela and Vietnam to TNK-BP for $1.8 billion. In Vietnam, TNK-BP will buy BP’s 35 percent stake in an offshore gas block containing the Lan Tay and Lan Do fields, a 32.7 percent stake in the Nam Con Son pipeline and terminal and a 33 percent stake in the Phu My 3 power plant.

As part of the second Russia-ASEAN summit, Medvedev will focus on financial and economic cooperation as well as joint efforts to ease the global crisis, Prikhodko said. Regional security, the situation on the Korean Peninsula and Iran’s nuclear program will also be discussed, he said.

U.S. Secretary of State Hillary Clinton and Chinese Premier Wen Jiabao will attend the Oct. 28-30 meetings in Hanoi, along with leaders from Japan, South Korea, India, Australia, New Zealand, and the 10-member ASEAN.

To contact the reporter on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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