Vietsovpetro Glorifying Vietnam - Russia Friendship

9:43:12 AM | 14/1/2020

“I think our Vietnam has the sea which definitely has oil, but we are at war and we cannot do it for now. I hope and believe that, after Vietnam wins this war, you will help us find oil and then help us exploit and process it and build an oil and gas industry complex like Baku today,” Uncle Ho said to Soviet Union comrades when they went together to visit the oil and gas industry complex in Baku, Azerbaijan in 1959.

Realizing his wishes, the Vietnam - Soviet Petroleum Joint Venture Enterprise (Vietsovpetro) was established in 1981. Since then, Vietsovpetro has been working hard to obtain great achievements in socioeconomic development. On the occasion of the 70th anniversary of Vietnam - Russia relationship, Vietnam Business Forum Magazine has an interview with Mr. Nguyen Quynh Lam, General Director of Vietsovpetro, an important link of Vietnam and Russia. Bao Ngoc reports.

It can be said that Vietsovpetro is an important turning point in Vietnam’s oil and gas history. So, could you please briefly tell us some memorable milestones of Vietsovpetro on the course of construction and development?

Vietnam - Soviet Petroleum Joint Venture Enterprise was established from the signing of Vietnam - Soviet Intergovernmental Agreement on June 19, 1981. On December 27, 2010, Vietnam and the Russian Federation signed an agreement to continue cooperation in oil and gas exploration and production. Then, the joint venture was renamed to Russian - Vietnamese Joint Venture - Vietsovpetro. Some important and memorable milestones of Vietsovpetro in the past 38 years include:

In May 1984, Vietsovpetro discovered a commercial oil reserve at Bach Ho field - White Tiger oilfield and, only two years later, on June 26, 1986, the joint venture brought this field into commercial production to get the first flow of crude oil and carved the name of Vietnam on the map of oil producers. This was a record speed in oil and gas exploration and production, reflecting the great endeavors of Vietsovpetro at that time.

However, in mid-1987, after bringing the Rig No. 1 of the Bach Ho field into operation, the production output of oil wells from sedimentary layers shrank quickly. The likelihood of shutting down the field was very high. At that tough time, it seemed that we impossibly went through but an event occurred and changed the case. The discovery of high-yield oil from fractured granite basement reservoir at Well BH-6 on May 11, 1987. More than a year later, on September 6, 1988, the first oil flow from the Bach Ho field was tapped, thus boosting the output of Vietsovpetro. This event marked a historic turning point for the Vietnamese oil and gas industry, changed the traditional viewpoint on subjects of oil and gas prospection, exploration and exploitation; importantly contributed to world petroleum science; opened a new, extremely important direction for oil and gas exploration in the Cuu Long Basin in particular and on the continental shelf of Vietnam in general.

After the Bach Ho field, Vietsovpetro also discovered and started commercial operation of seven more oil and gas fields of commercial value, including Rong, Dai Hung, Nam Rong - Doi Moi, Thien Ung - Mang Cau, Gau Trang, Tho Trang and Ca Tam. Besides, manifestations of oil and gas movements were also discovered on the structures of Tam Dao, Ba Vi, Ba Den, Soi and Meo Trang.

To date, Vietsovpetro has produced over 235 million tons of crude oil, brought ashore nearly 35 billion cubic meters of associated gas, fetched over US$80 billion of oil sales. The joint venture generated over US$50 billion of profit for Vietnam and nearly US$11.5 billion for the Russian Federation.

In Vietnam, Vietsovpetro has always been the most effective oil and gas exploration and production joint ventures. The joint venture has made great contribution to the Vietnam’s economy, given a substantial profit for the Russian Federation and helped strengthen the traditional friendship and comprehensive strategic partnership between Vietnam and the Russian Federation. In recognition of these achievements, Vietsovpetro has been awarded the Labor Hero in the doi moi era twice, the Ho Chi Minh Medal and the Golden Star Medal by the State of Vietnam.

How do you assess the cooperative relationship potential between Vietnam and Russia in general, and in the oil and gas industry in particular?

In my opinion, after more than 38 years of operation, Vietsovpetro has confirmed the faithful and trustful cooperation between Vietnam and the Russian Federation in oil and gas prospection, exploration and production and brought significant economic benefits to both parties. Through effective cooperation in oil and gas exploration and production, Vietsovpetro has helped preserve and cultivate traditional friendship and comprehensive strategic partnership between the two governments and two peoples.

In addition to fostering traditional cooperation in oil and gas exploration and production, continuing to expand oil and gas exploration, production and processing on the continental shelf of Vietnam and other areas in line with international law, Vietnam and Russia have many prospects for economic and trade cooperation in electricity generation, new waterborne energy, fisheries, forestry, agriculture, agricultural industry, disaster prevention, science and technology, and education and training. Bolstering and expanding cooperation in various fields will create new impetus to deepen the comprehensive strategic partnership.

So, what specific plans will Vietsovpetro follow to maintain performance and affirm its strong prestige to the governments of Vietnam and Russia in the coming time?

The upcoming difficulties and challenges for Vietsovpetro are numerous due to the rapid output shrinkage of large wells and the modest output of new wells. Effective discoveries, increased reserves and operational expansion are not enough to offset declining production output. In order to sustain development as expected, Vietsovpetro has been, and will be, continuing to make the best effort to explore potential areas, tap the remaining oil and gas in Lot 09-1, and actively seek opportunities of cooperation in oil and gas exploration and production in new fields to increase reserves and stabilize production output.

The care and support by the governments of Vietnam and Russia are a great advantage for Vietsovpetro. The joint venture, with existing resources of personnel, finance and facilities, is confident to overcome challenges to secure the stable development and deserve the trust of the two governments.

Thank you very much!