On January 24 in the head office of Vietnam's oil-and-gas group, PetroVietnam in Hanoi, agreements were signed regarding implementing changes to the Production Sharing Agreement (PSA) on blocks 05-2 and 05-3 on the shelf of the Socialist Republic of Vietnam.
According to the documents signed by Valery Gulev, managing director of Gazprom International, which is the single operator of foreign upstream-projects for Gazprom, and President of VNG PetroVietnam Do Van Hau, the Russian side becomes a duly authorized participant in these Agreements.
The signing ceremony was attended by Ambassador to Russia in Vietnam, Andrey Kovtun, Deputy Minister of Industry and Trade Le Duong Quang, Chairman of PetroVietnam's Board of Directors Phung Dinh Thuc, and representatives from the Ministry of Industry and Trade of Vietnam, VNG PetroVietnam, Gazprom International, joint operating company Vietgaaprom, and operating company Bieng Dong (subsidiary of PetroVietnam).
"Today's agreements will promote strategic cooperation between Gazprom and PetroVietnam at a new level. Gazprom is officially entering the exploitation process of these oil fields. Gazprom's inclusion in the project ensures the fulfillment of the operational schedule on blocks 05-2 and 05-3, where in June of this year we expect the first gas discharge," Do Van Hau said during the ceremony.
According to V. Gulev, out of more than 18 countries where Gazprom is currently working, Vietnam is one of the most favorable for doing business. The head of Gazprom International further assured that the company will do all it can to fulfill its responsibilities in the exploitation project for blocks 05-2 and 05-3.
With a total area of 4342 cubic kilometers, blocks 05-2 and 05-3 are located in the southeastern part of the South China Sea, in the Southern Konshonsky oil-and-gas-bearing basin 300 kilometers from Vung Tau. The underwater gas pipeline Nam Con Son is in close proximity to the blocks. Two gas condensate fields are open within the blocks, Moc Tinh, 05-3, and Hai Tchach, 05-2 and 05-3, as well as one oil field, Kim Cuong Tay, 05-2. The ultimate reserves of the two gas condensate fields is measured at more than 55.5 billion cubic metres of gas and 25 million tonnes of gas condensate. In order to develop them, 16 exploitation wells with depths from 2000 to 4600 metres must be built.
PSAs on blocks 05-2 and 05-3 were signed in 1992. PetroVietnam acting on behalf of the government, signed the agreements -- for block 05-2 with BP and Norweigian Statoil; and for block 05-3 with the Japanese AEDC Vietnam Oil Development Co. and Teikoku Oil Co. As a result, the contents of the participants in the PSA changed, and by 2008 included PetroVietnam, BC ConocoPhilips and the Vietnamese PVEP. In 2009, contracting organizations announced their departure from the project, and to continue the work in PetroVietnam an operating company Bieng Dong was created.
On April 5, 2012, as part of the acting Agreement on Strategic Partnership between Gazprom and VNG PetroVietnam, an Agreement on Beginning the Project for Combined Exploitation of Blocks 05-2 and 05-2 was signed, according to which Gazprom receives 49% of the PSA under the conditions of the project implementation.
In April 2010, the State Expert Committee of Vietnam confirmed the plan for co-development of Hai Tchach and Moc Tinh. It's implementation will enable the assurance of the beginning of exploitation until the completion of the exploitation drilling and the development of fields, as well as the advance supply of gas in the main pipeline.