Petrovietnam has gone from being an E&P company in Vietnam to a vertically integrated energy company in Vietnam that is involved in oil and gas production, refining and petrochemicals, international E&P, power generation, and oilfield services. The company has been expanding its operations internationally to increase its reserve position.
“We have been producing oil and gas mostly on the continental shelf. We are exploring offshore. We have not found much onshore,” Dr. Do Van Hau, president and CEO of Petrovietnam, said at the OTC 2013 topical breakfast May 6 on “Energy Challenges and Opportunities in Vietnam and Beyond.”
“Currently, there are 90 petroleum contracts with our partners in Vietnam. Oil production is now at 320,000 b/d at this point,” he said. Natural gas production is now at 1 Bcf/d, and the company plans to increase production to 1.5 Bcf/d in the next four to five years.
Diversifying internationally
“We have been going overseas since the early 2000s,” he continued. “We are now working in 15 countries with 20 projects in Russia, Central Asia, Southeast Asia, South America, and North Africa. Of the projects we are implementing overseas, three are under production, and our share is 36,000 b/d. We started production two years ago. By 2015 overseas production will be 50,000 b/d.”
Five other projects are under development internationally. One project in Algeria should begin production in 2014 with peak production of 40,000 b/d. Two other projects in Russiaare slated to start production in 2014 and 2015. The company also is in a project in Venezuela that is producing very heavy oil.
Petrovietnam is expanding by diversifying with overseas ventures. The company has a project in Peru, where it bought a 50% interest in Block 67. First oil is expected in November 2013 with maximum production of 60,000 b/d, said Dr. Khanh Van Do, president and CEO of Petrovietnam Exploration Production Co.
Offshore Myanmar, the company is the operator of one block with an 85% interest. The company is seeking other partners to farm out 35% of the block. A data room has been open for the last year, he continued.
In Cuba, Petrovietnam drilled two wells onshore several years ago. The focus is now offshore where the company has conducted both 2-D and 3-D seismic. The company is continuing to study the data and has not made a decision about drilling yet, Khanh said.
Domestic emphasis on oil production
About 90% of Vietnam’s production is in the Mekong Delta. Petrovietnam has 43 petroleum licenses – 23 exploration licenses and 20 development and production licenses. The company operates nine exploration licenses and two production licenses. Currently, Petrovietnam produces about 110,000 boe/d. By 2015, production should increase to 180,000 boe/d, rising to 470,000 boe/d by 2025. Production is expected to grow annually at a rate of 10% starting in 2016.
Estimated undiscovered resources in Vietnam are more than 37.5 Bboe. Proven reserves are estimated at 1.6 Bboe. “We are increasing our proven reserves by about 120 MMboe/year,” Khanh said.
Several projects are producing. One of the company’s projects in the Nam Con Son basin produces about 14,000 b/d. Block 15.1 in the Cuu Long basin is producing about 44,000 b/d and has a targeted production of 100,000 b/d. The Te Giac Tran field on Block 16.1, also in the Cuu Long basin, is flowing 55,000 b/d, he continued.
Petrovietnam has lots of opportunities for new partners in the Red River, Phu Khanh, and Nam Con Son basins and is actively pursuing partners for deepwater exploration. Do pointed out that data rooms were open in Hanoi for interested companies. Petrovietnam also is looking for companies that could provide expertise in developing marginal gas fields and formations with high carbon dioxide content.
Natural gas fuels power generation
The newest business sector for Petrovietnam is power generation. The company is now the second largest power generator in Vietnam. Electricity is supplied from gas- and coal-fired power plants and hydroelectric facilities, Do said.
The company is currently investing in five coal-fired power plants. One project is nearing completion and will begin production this year. When these plants are completed Petrovietnam’s total generation capacity will be close to 10 gigawatts. At that time, the company will be supplying 20% to 25% of the country’s electricity.
Rig fleet is expanding
Pham Tien Dzung, president and CEO for Petrovietnam Drilling, said the company currently has three jackup rigs and one tender barge operating offshore Vietnam as well as one land rig drilling in Algeria.
The company expects to expand the rig fleet by adding semisubmersibles for work in deep water. The drilling company also will expand its markets overseas, Pham said.
Contact the author, Scott Weeden, at sweeden@hartenergy.com.
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