[Vnbiz] World oil giants plan expansion for Vietnam

[Phan, Tai]

World oil giants plan expansion for Vietnam 


SAIGON (THANH NIEN DAILY) -- Global oil and gas giants are planning investment and business expansion in Vietnam, said economists, adding the oil sector would be the nation's busiest at the threshold of WTO entrance.

Besides a number of exploitation and production contracts signed between the state-run PetroVietnam and its foreign counterparts to date, two of the world's largest oil and gas groups, British BP and US-based ConocoPhillips have revealed plans to expand operations in Vietnam.

BP is willing to cooperate with the government in implementing several new projects and expand the operation scope of some ongoing projects over the next decade, Saigon Times Weekly quoted John C. Mingé, Director General of BP Vietnam as saying last week.

BP estimated that together with partners, it would pump around US$2 billion, including $1 billion from BP alone into the projects.

The cash source will help raise the exploitation capacity of Lan Tay & Lan Do natural gas fields (Block 6.1), develop Hai Thanh and Moc Tinh gas fields (Blocks 5.2 & 5.3), and build a power plant in the southern province of Dong Nai.

BP operates Block 6.1 in Lan Tay & Lan Do gas fields, with a 35 percent share, along with other stakeholders, Indian ONGC Videsh with 45 percent and PetroVietnam with 20 percent.

The block has a production capacity of 3 million cubic meters of gas per year.

Minge told Saigon Times Weekly that BP Vietnam plans to expand drilling rigs to increase exploitation capacity of Block 6.1 by 50 percent by the middle of next year to boost natural gas supply to power plants between now and 2010.

Earlier this year, BP, PetroVietnam, Electricity of Vietnam (EVN), and the Industry Ministry signed a memorandum of understanding on the development of Dong Nai's Nhon Trach power station pumped by gas exploited from Blocks 5.2 and 5.3.

The plant is expected to consume 2.5 billion cubic meters of gas to generate 2,640MW per year.

In Dong Nai Province, BP also plans to build a new power plant of a similar size with the 726MW Phu My Power Plant 3 in the southern Ba Ria - Vung Tau province, creating market for gas from blocks 5.2 and 5.3.

BP Vietnam is moving ahead with its plan to join forces with Vietnamese partners to make investment in LPG production, a very promising market segment in the eyes of BP Group.

Meanwhile, ConocoPhillips, a giant investor in the oil and gas field, with investment of $1 billion in projects in Vietnam, plans to inject another $1 billion in local oil exploitation.

Under the plans, ConocoPhillips will inject $115 million in developing block 15.1 which covers the Black Tiger (Su Tu Den), White Tiger (Bach Ho), Golden Tiger (Su Tu Vang) and Brown Tiger (Su Tu Nau) oil fields.

Black Tiger can provide 70,000 barrels of oil a day, the third biggest exploitation capacity in Vietnam.

In Vietnam, ConocoPhillips holds a 23.25 percent interest in Block 15.1, 36 percent at 15.2 and 70 percent in 133 and 134, 50 percent in 5.3, and 16.33 percent at the Nam Con Son gas pipeline.

In the next 10 years, ConocoPhillips will focus on developing oil fields in which it holds shares.

As such, total investment in oil and gas projects between BP and ConocoPhillips is expected to hit $2 billion over the next decade.

Total turnover from the industry now amounts to 25 percent of total tax collection.