Oil and gas are limited valuable and non-renewable resources, the energy of life and the blood for social and economic development. Thus, in addition to accelerating oil and gas exploration in the country, the State-owned Vietnam National Oil and Gas Group (PetroVietnam) is strengthening cooperation in overseas oil exploration.
Domestic oil reserves are running out
Industry experts said that oil reserves are running out in Vietnam. Bach Ho (White Tiger), the largest oil field and the primary supplier of crude oil in the country, is fizzling out after more than 25 straight years of exploitation. The oil field, with estimated reserves of 300 million tonnes, started commercial operations in 1986. Each day, Vietsovpetro, an equal Vietnam-Russia joint venture, produces 38,000 tonnes of crude oil, accounting for 80 percent of the country’s oil output.
According to PetroVietnam experts, if Vietnam cannot find any considerable oil reserves to replace the Bach Ho oil field in the next few years, the national energy security programme will be affected and the State Budget will face the risk of shrinking. Aware of this, in past years, the oil and gas industry has endeavoured to step up search and exploration and made important discoveries like Dai Hung (Great Bear), Rang Dong (Breaking Dawn), Hong Ngoc (Ruby) and Su Tu Den (Black Lion). Nonetheless, these discoveries have small reserves. The largest field, Su Tu Den, has a reserve of 100 million tonnes, equal to only a third of Bach Ho. This proves that domestic sources are not likely to replace the Bach Ho field.
Speaking at a recent meeting with counsellors and ambassadors, PetroVietnam’s Deputy General Director Nguyen Quoc Thap said: Oil and gas are limited valuable and non-renewable resources, the energy of life and the blood for social and economic development. Thus, in addition to accelerating oil and gas exploration in the country, PetroVietnam is strengthening cooperation in overseas oil exploration to ensure national energy security. Functioning as the leading role of the national economy, PetroVietnam always goes one step ahead, performs pioneering roles in international economic cooperation and integration, and attracts foreign investment into Vietnam and expands its investment to other nations. Since 2010, the group has successfully organised investment promotion programmes in Japan (June 2010), in South Korea (November 2010), and in the United States (June 2011). It will hold other ones in some European countries.
Thap said PetroVietnam has expanded operations to 18 countries and territories with 25 oil and gas projects.
PetroVietnam invests in oil-rich areas and countries with good political relations with Vietnam and diversifies cooperation forms with big oil companies to avert risks, to gain know-how and integrate into the world. Accordingly, Russia and former Soviet states rich in oil and gas are the top priority of PetroVietnam’s overseas investment strategy. The second most important area is Southeast Asia where PetroVietnam has formed cooperation with Indonesia and Malaysia. The third important area is Venezuela and Latin America where investment attraction policies are quite open. The fourth and fifth important areas are the Middle East and North Africa, respectively, but the group sees a lot of difficulties there because of political instability and military conflicts.
First oil from Russia, Venezuela
PetroVietnam’s efforts for overseas oil and gas cooperation have generated initial fruitful results. On September 30, 2011, Rusvietpetro, a joint venture between PetroVietnam and Russia's Zarubezhneft, welcomed the first barrel of commercial crude oil in Naryan Mar City, the capital of Nenets Autonomous Region, Russia.
After the first commercial oil flow from overseas investment project in Nenets, PetroVietnam started operating the first oil field in Venezuela on April 19, 2012. This was the outcome of more than four years of negotiation, preparation and implementation. In mid-2008, at the meeting of the Intergovernmental Committee in Caracas, the two sides committed to cooperating in the energy industry: “Intensifying oil refinery joint venture projects in Vietnam, supplying Venezuelan oil to Vietnam, establishing a petroleum shipping joint venture company, carrying out oil reserve appraisal projects in Block Junin 2 in the Oricono oil belt, and exploring and producing heavy oil in Maracaibo Lake.
On June 29, 2010, the contract on establishment and management of Petromacareo, a joint venture between Vietnam and Venezuela, was signed under the witness of Vietnamese Deputy Prime Minister Hoang Trung Hai and the Venezuelan Petroleum Minister. On April 14, 2011, Venezuela National Oil Petroleum Company (PDVSA) and PetroVietnam clinched an agreement to expand research of Lake Maracaibo. According to the agreement, Vietnamese oil and gas service companies will provide technical services in Block Junin 2, among others.
Block Junin 2 is expected to yield up to 31 billion barrels of crude oil. It is located in eastern Venezuela's Orinoco Belt, 800 km from the Venezualan capital of Caracas. This belt is considered the second biggest oil field in the world in terms of reserves. PetroVietnam’s General Director Do Van Hau said PDV-39 drilling platform is expected to produce 7,000 barrels of heavy crude oil per day in 2013, whereas the entire Block Junin 2 will reach a total output of more than 200,000 barrels or 10 million tonnes of crude oil per day. Under the cooperation contract, PetroVietnam holds a 40 percent stake and its Venezuelan partner has the remaining interests. The oil exploitation at Block Junin 2 will help ensure energy security for Vietnam within the next 25 years.
Vietnamese
