Vietnam, Asia’s sixth largest crude oil producer, should make certain shifts in order to attract foreign investment flows into its oil and gas industry, heard a recent monthly meeting with enterprises held by the American Chamber of Commerce (AmCham).
Jim Andrew, an oil and gas expert, said Vietnam should change its financial conditions in oil and gas projects, especially in natural gas projects, to attract new infusions of foreign capital.
At present, foreign companies generally have bore all the risks while attaining a mere 10-20 per cent share of earnings if oil was extracted, he said.
In the meantime, most oil-rich deposits have already been exploited, future exploration and drilling would be increasingly expensive and risky, he explained.
Vietnam needs huge amounts of foreign capital for the development of oil and gas projects to meet the national demand, especially for electricity generation, said Bill Schmidt, exploration manager of US-based ConocoPhillips.
With more foreign investments, the Southeast Asian nation can make low-cost natural gas available to its power plants, which are largely gas-operated.
According to the Ministry of Industry’s estimate, Vietnam’s electricity demand will quadruple in the next 10 years to 42,000 MW in 2015 from 11,000 MW in 2005.
Schmidt said the price for electricity would also increase because of higher demand, adding that the amount of natural gas that currently can be exploited would fall. As a result, more capital is needed to build facilities for the oil and natural gas industry.
Currently, there are 25 foreign oil firms from 13 countries doing business in Vietnam, with 27 effective projects. They have invested around $7 billion and created thousand of jobs.
Last year, Vietnam tapped 6.34 billion cubic meters of natural gas, up 1.2 per cent against 2004.
The country is building two gas-powered electricity complexes namely the 3,860-MW Phu My and 720-MW Ca Mau plants.
Vietnam Economic Times, VNS
Vietnamese
