Far East: Viet Nam

FAR EAST

Tony Sitathan, Contributing Editor, Singapore (Indonesia, Malaysia, Thailand, Viet Nam, Myanmar, Brunei, Cambodia and MTJDA)

Viet Nam

Since achieving high GDP growth rates of 8% in the 1990s, Viet Nam was forced to trim its GDP growth to 4.5% last year, and is expected to remain within the 4% level for 2001. The slowdown is further aggravated by an inability to boost foreign investment levels back to the pre-Asian crisis level. Viet Nam plans to produce 350,000 bopd this year, compared with 315,000 bopd in 2000.

Licensing. Viet Nam has issued 41 investment licenses for oil / gas exploration since 1998. Now about 30 European / U.S.-based companies operate offshore, which could drill up to 50 wells this year. One of the bigger foreign companies, Zarubezhneft, a Russian oil company, together with PetroVietnam, called Vietsovpetro, is one of the biggest operators, producing over 80% of the total oil production. It wants to boost its exploitation of crude to 13.1 million tons this year (262,000 bpd), 500,000 tons higher than last year’s output, and achieve a target of 160 MMcfd gas by 2001.

Viet Nam’s Planning and Investment Ministry will finalize a major offshore gas deal, involving a consortium led by BP Amoco, worth $1.5 billion. This consortium includes Statoil and ONGC, as well as PetroVietnam, to develop gas resources in Nam Con Son basin, Lan Tay and Lan Do fields. They also intend to build and operate a $600-million, 230-mi pipeline to transport fuel to three power plants in the coastal town of Phu My. The Ministry and PetroVietnam are preparing to sign the GGU with the foreign consortium. Statoil has recently decided to pull out of the project, ceasing all its upstream activities in the Far East.

Exploration. A major find in Block 15-1 in Cuu Long basin was announced in October 2000 by a consortium led by Conoco, the Korean National Oil Co. (KNOC), SK Corp. and Geopetrol. The first exploration well had a flowrate of 17,800 bpd, a record setter.

Conoco, considered a leading oil company in Viet Nam, with interest in five offshore blocks totaling more than 23,285 km², has increased its capacity in Block 15-2 to 50,000 bpd from Rang Dong field. This block covers 400,000 acres and is close to Back Ho and Ruby fields. The company is currently exploring 16-2, which is undergoing a 3-D seismic survey, and it has interest in deepwater Blocks 133 and 134.

Unocal Vietnam has discovered the Ca Voi offshore gas field (SW Viet Nam) in Block 52/97 near Kim Long gas field in Block B. The well, CV 1X encountered 107 ft of net gas pay. It is located 10 mi west of the Kim Long trend and could be developed in tandem with Kim Long. Production is set to begin in 2005 at 200 MMcfd.

OMV Vietnam Exploration GmbH and Edison International were granted an exploration license by the government for Block 111 in September 2000, located in the Red River basin, offshore North Viet Nam.

Drilling / Development. PetroVietnam, Opeco Natural Gas from the U.S., and Samedan Vietnam have signed an agreement to share crude oil produced in 12W oil / gas field. Samedan, a subsidiary of Noble Affiliates in the U.S., has also acquired oil / gas exploration rights in 12E. In total, Blocks 12W and 12E cover 1.6 million acres, on which two exploratory wells will be drilled in 2001. This oil field is located in Viet Nam’s southern seabed and has vast reserves of oil and gas. The other proven reserves in this area include Dai Hung, Lan Tay-Lan Do, Hai Thach and Rong Doi Tay.

SOCO International’s subsidiary, SOCO Vietnam, has signed a contract for a 50% working interest in development of Block 9-2 in Cuu Long basin with PetroVietnam. It is bordered by Back Ho, which is producing 225,000 bpd and Rang Dong, which produces 40,000 bpd.

The vast majority of Viet Nam’s 315,000-bopd output is still produced by Vietsovpetro, most of which comes from White Tiger field. Within White Tiger, the Russian/Vietnamese joint venture firm has 11 fixed platforms, 10 satellite platforms, one central processing platform, one central gas compression platform, one gas-lift compressor platform and one water-injection platform. (Photo courtesy of Petrovietnam)

Production. Viet Nam has more than 1,700 MMbbl proven oil reserves, considering a 15-year future life at current production. Crude / condensate production of 290,000 bpd in 1999 was increased to an estimated 315,000 bpd in 2000. In first-quarter 2001, Viet Nam pumped an estimated 355,000 bpd of crude / condensate, according to the General Statistics Office (GSO). And the Government has further plans to increase 2001 output to 362,000 bpd from six oilfields: Bach Ho (White Tiger), Rong (Dragon), Daihung (Big Bear), Rang Dong (Dawn), Hong Ngoc (Ruby) and Bunga Kekwa.