Gazprom International carries out exploration on the shelf of the Socialist Republic of Vietnam within Blocks 111/04, 112, 113 and Blocks 129-132. JOC Vietgazprom, established by the Gazprom Group and Petrovietnam, the Vietnam Oil and Gas Group, on a parity basis, is the operator of the projects.
Apart from conducting exploration, Gazprom International produces hydrocarbons at Blocks 05-2 and 05-3, where the projects are operated by the Bien Dong Petroleum Operating Company (BDPOC).
In 2015, another Russia-Vietnam joint venture, PVGAZPROM NGV, was established with Gazprom Group participation. Its objective is to implement an NGV project in Vietnam. In this joint venture, Russia is represented by Gazprom International as well Gazprom Gas-Engine Fuel.
Blocks 111/04, 112 and 113
The beginning of joint operations between Gazprom and Petrovietnam dates back to the autumn of 1997, when the companies signed a Protocol on cooperation.
That was when the joint plans for works in the territory of Vietnam were announced. In 2000, in order for these plans to be implemented, License Block 112 was designated as one of the most promising blocks in the Gulf of Tonkin. A corresponding oil and gas contract was signed by Gazprom, Petrovietnam, PVEP (Petrovietnam’s subsidiary) and Gazprom zarubezhneftegaz (part of Gazprom International). In June 2002, the contract came into force. It envisaged the prospecting, exploration, production and sales of hydrocarbons on the basis of a production sharing agreement via JOC Vietgazprom. The license obtained by Gazprom is valid until 2027 (without including prolongations). The Russian party guarantees 100% funding of exploration works until the boundaries of the first territory to be developed are determined. All the expenses are to be reimbursed with the start of commercial production.
In 2005, the Ministry of Planning and Investment of Vietnam granted a second license to Gazprom, which extended the area covered by the contract to the adjacent Block 113.
In 2006, the cooperation between Gazprom and Petrovietnam received a new boost. In November of that year, during the official visit of Vladimir Putin, the President of Russia, to Vietnam, Alexey Miller, Chairman of the Management Committee of Gazprom, and Tran Ngoc Canh, the then President and Chief Executive Director of the Petrovietnam group, signed an Agreement on cooperation.
In 2007, the Bao Vang gas condensate field with proven productivity of two formations was discovered in the Bao Vang structure within Blocks 113 and 111/04. In 2008, Block 111/04 was added to the contract territory of Blocks 112 and 113.
In 2009, another gas condensate field, Bao Den, was discovered within Block 113.
A large volume of exploration works has been carried out within the limits of the three license blocks: 2D seismics over 2,000 linear kilometers, 3D seismics over 1,700 square kilometers, electrical survey over 1,413 linear kilometers, and construction of 10 prospecting and exploration wells.
As a result of the evaluation works, the reserves of the Bao Vang field were estimated and approved by the Prime Minister of the Government of Vietnam. Following the technical and economical assessment, the project’s management committee decided to consider the Bao Vang field as potentially commercially important (under certain conditions).
Other promising structures discovered within License Blocks 111/04, 112 and 113 are currently being evaluated.
On 27 October 2008, in the presence of Dmitry Medvedev and Nguyen Minh Triet, the then Presidents of Russia and the Socialist Republic of Vietnam, Gazprom, Petrovietnam, PVEP and Gazprom zarubezhneftegaz signed a contract for exploration and development of hydrocarbons within blocks 129-132 on the shelf of Vietnam under a production sharing agreement for 30 years. JOC Vietgazprom was appointed as the operator of the project. The contract areas (around 28,500 square kilometers) were in the Nam Con Son oil and gas basin. Their total resources were estimated at nearly 700 million tonnes, with 440 billion cubic meters of gas, 40 million tonnes of condensate and 220 million tonnes of oil.
The license for carrying out works at Blocks 129-132 envisaged by the oil and gas contract was obtained in early 2009.
Under the contract, Vietgazprom has completed the following works at License Blocks 129-132:
- processing seismic data from the previous years over 1,950 linear kilometers;
- 2D seismic survey over 20,000 linear kilometers;
- geochemical testing – 2,000 samples;
- electrical survey over 1,000 linear kilometers.
A comprehensive interpretation of geological and geophysical data and the detection of prospective objects through the use of basin modeling were also completed.
In 2015-2016, two deepwater exploration wells were built at a depth of over 1,600 meters at the Than Dat (Block 130) and Than Bien (Block 131) prospective structures. The construction was made off Deepsea Metro I, a latest generation dynamic positioning drillship.
In January 2016, both wells were abandoned as their respective geological tasks were completed.
As the result of drilling, the Than Bien gas field was discovered.
The processing and analysis of the results of drilling and tests of Than Bien and Than Dat wells, as well as the reinterpretation of 2D seismic data and an estimate of current reserves, were carried out. The plans for the nearest future include reprocessing and reinterpretation of the geological and geophysical data acquired over the entire contract territory, assessing the oil and gas bearing potential and ranking the prospective structures.
Blocks 05-2 and 05-3
In 2013, Gazprom International officially entered a new project in Vietnam. In January, agreements on introducing changes to the Production Sharing Agreements (PSA) regarding Blocks 05-2 and 05-3 offshore Vietnam were signed, and in July, the modified licenses were obtained, according to which the Russian side became a plenipotentiary of the given agreements with a 49% share.
Blocks 05-2 and 05-03, with a total area of 846 square kilometers, are located in the southwest of the South China Sea. Two gas condensate fields have been discovered within the blocks: Moc Tinh (05-3) and HaiThach (05-2 and 05-3). The total reserves of the two fields are estimated at over 55.5 billion cubic meters of gas and 25 million tonnes of gas condensate. Production sharing agreements for these blocks were concluded in 1992. The participants of the PSA have changed several times since, and in 2009 the contractors announced their withdrawal from the project. The Bien Dong Petroleum Operating Company (a branch of the Petrovietnam group) was created so that works at Blocks 05-2 and 05-3 could be continued.
Commercial production at these blocks began in October 2013. By the end of 2016, the total accumulated production at Blocks 05-2 and 05-3 exceeded 5.6 billion cubic meters of gas.
PVGAZPROM NGV joint venture
The agreement for the establishment of an NGV production joint venture was signed in November 2013 in Hanoi, the capital of the Socialist Republic of Vietnam, by Alexey Miller, Chairman of the Gazprom Management Committee, and Do Van Hau, President of Petrovietnam, in the presence of the Presidents of Russia and Vietnam.
In October 2015, the Department of Planning and Investment of Ho Chi Minh City (the industrial and commercial center of Southern Vietnam) issued the certificate of registration of PVGAZPROM Natural Gas For Vehicles Limited Liability Company (PVGAZPROM NGV), the joint Vietnamese-Russian company for carrying out NGV projects.
The release of this certificate concluded the registration procedure for the joint venture comprised of Gazprom International (35.5%), Gazprom Gas-Engine Fuel, Gazprom’s sole operator for developing the NGV market (35.5%), and PETROVIETNAM GAS joint-stock gas company, a subsidiary of Petrovietnam (29%).
In accordance with the founding documents, the objectives of the trilateral joint venture include construction and commissioning of natural gas liquefaction units, CNG filling stations, cryogenic and multi-fuel filling stations, refueling terminals for water and railway transport; LNG import, storage and regasification systems; vehicle re-equipment and technical maintenance points, and other gas-engine infrastructure objects for servicing cars and machinery fueled by natural gas.