Key Oil and Gas Projects

 

The Vietnam National Oil and Gas Group (PetroVietnam) has completed all tasks assigned by the central government. Specifically, oil production exceeded the plan by 2.8 percent, gas production by 0.1 percent and nitrogenous fertilizer production by 2 percent. In 2009, the group’s industrial production valued VND43.22 trillion, equal to 121 percent of the annual plan and up 24 percent from 2008; the revenues totalled VND265.02 trillion, equal to 125 percent of the yearly plan and 16 percent of the country's GDP; the State budget payment reached VND91.05 trillion, equal to 148 percent of the annual plan and 24 percent of the country’s state budget turnover, export value reached US$7.82 billion, equal to 134 percent of the yearly plan and 14 percent of the country’s total export earnings (in 2009, the average oil price was US$64 per barrel, down 38 percent from in 2008, with US$102 per barrel).

 

Cu Lao Tao petroleum depot in Vung Tau City is invested by the PetroVietnam Oil Corporation (PV Oil) and built by the Petroleum Pipeline & Tank Construction Joint Stock Company (PVC-PT). The VND489 billion depot with a storage capacity of 150,000 cubic metres has a mooring site for ships of 50,000 tonnes, wharves for vessels of 10,000 tonnes and 5 km of underground pipelines running from the mooring buoy on the base depot. Together with the Vung Tau petroleum depot with a capacity of 121,500 cubic metres, the Cu Lao Tao petroleum depot is the main storage house of PetroVietnam Oil Corporation which is responsible for importing petroleum from the Dung Quat oil refinery and from many countries in the world to distribute the southern market. Since its initial days of operation, the petroleum depot received up to 5,000 cubic metres of kerosene - the first batch produced by Dung Quat refinery, the first of its kind in the country, before shipping to other places.

 

Dung Quat refinery, located in Binh Son district, Quang Ngai province, is invested by the Vietnam National Oil and Gas Group. The refiner, with 338 hectares on the mainland and 471 hectares on the sea, is capable of processing 6.5 million tonnes of crude oil a year, or 148,000 barrels per day, to meet some 30 percent of the country’s petroleum demand. This is really a crucial project of the country.

 

 

With its endless effort, PetroVietnam is playing an increasingly important role in the rising of the nation, contributing more to the energy development in the midst of energy scarcity for economic development, and ensuring the development of industry and export.

 

 

In the first quarter of 2010, PetroVietnam produced 5.92 million tonnes of oil equal to 26 percent of the full-year plan, including 3.59 million tonnes of crude oil and 2.33 billion cubic metres of gas. The group exported 3.58 million tonnes of crude oil worth US$2.12 billion, equal to 124.9 percent of the quarterly plan and 30 percent of the full-year plan and up 46 percent from the same period in 2009. It also produced oil and gas-based products - an alternative to imports. Specifically, it turned out 192,000 tonnes of nitrogenous fertilisers, 979,640 tonnes of petroleum products from the country’s first Dung Quat oil refinery. Its power plants also generated 2.98 billion kWh of electricity in the three-month period, up 69 percent year on year. In the first three months of the year, PetroVietnam increased 5.4 million tonnes of oil equivalent to the country’s reserves. Petro Vietnam also drilled and tested 12 oil wells, made one oil discovery, and signed three new oil and gas contracts.

 

In the first quarter, the oil and gas industry made a long stride in services, with revenues growing 69.7 percent year on year to over VND33 trillion, accounting for 35 percent of the group’s revenues. Mr Le Minh Hong, Deputy General Director of PetroVietnam, said: In the second quarter of 2010, the group will strive to produce 3.51 million tonnes of crude oil, 2.04 billion cubic metres of gas, 185,000 tonnes of nitrogenous fertilisers; 2.94 billion KWh of electricity, 1.19 million tonnes of petroleum products from the Dung Quat refinery, export 3.5 million tonnes of crude oil (including supply for the Dung Quat refinery), attain VND96 trillion of revenues, including US$1.97 billion from exports, and pay over VND29 trillion to the State Budget.

 

In the first three months, the group invested VND17.33 trillion in basic construction, including VND13.23 trillion being disbursed, or 80 percent of the quarterly plan. Key projects include the breakwater for the Chu River, the acceleration of Hua Na power plant, fabrication of BK-14 and BK-15 light rigs for Bach Hoi oilfield development, the construction of Rong - Doi Moi gas compression rig, the launching of Chim Sao rig, Su Tu Den Dong Bac topside rig and business cooperation deal with Chevron Group of the United States, MOECO of Japan and PTTEP of Thailand for the Block B - O Mon gas pipeline.

As a locomotive economic group of the nation and in implementing the Government’s Resolution No. 03/NQ-CP dated January 15, 2010 on main solutions to regulate socioeconomic development plan in 2010 and the Resolution 18/NQ-CP dated April 6, 2010 on measures to stabilise the macro economy, the group has launched its action programme for 2010 with main contents as follows: Beating all targets assigned by the Government; increase oil reserves by 35 - 40 million tonnes; sign 3 - 5 oil contracts and make three new oil discoveries; operate Dung Quat oil refinery, Phu My fertiliser plant and Dung Quat PP plant safely and effectively to ensure the completion of the full-year target; closely coordinate with the Electricity of Vietnam (EVN) to operate Ca Mau 1, Ca Mau 2, Nhon Trach 1 power plants at highest production capacity to help deal with power shortage in dry months; operate gas pipelines and oil projects safely and effectively; regulate oil and gas production and export plans to attain highest results; timely and sufficiently supply crude oil for Dung Quat refinery.

 

In a response to the “Buy Vietnamese” programme which encourages Vietnamese people use made-in-Vietnam products, PetroVietnam has instructed its construction units to ensure supply of essential products for domestic consumption like petroleum, oil, nitrogenous fertiliser and liquefied petroleum gas to avoid shortfall or price fever. Production units are requested to keep track on supply/demand and market prices to respond to volatility.

On May 22, the first Party Congress of PetroVietnam (tenure 2010 - 2015) was held in Hanoi. The resolution of the congress reads: The five year period from 2010 to 2015 is a specially important stage for the group to complete the Oil and Gas Industry Development until 2015 and vision to 2025 (concluded by the Politburo of the Communist Party of Vietnam and approved by the Prime Minister).

 

According to the plan for the 2011-2015 period, PetroVietnam - the parent company - will have a chartered capital of VND500 trillion in 2015, an annual revenue growth of 20 - 25 percent and returns on registered capital of 20-25 percent a year.

 

To ensure production and business activities, the group will maintain debt on assets at 0.5 a year and per capita revenues of VND3.5-4 billion a month.

To date, the Vietnam National Oil and Gas Group (PetroVietnam) has signed more than 76 oil and gas contracts worth US$10 billion, including 53 contracts in force, with world-leading oil firms. The cooperation forms vary, including the production sharing contract (PSC), business cooperation contract (BCC), joint operating contract (JOC), joint venture (JV) and others. The group has conducted 2D seismic test on more than 400,000 km and 3D seismic test on nearly 60,000 km2, drilled more than 990 wells to find oil and gas, tested oil reserves and drilled more than 2.3 million metres.