Vietnam

Strategy

The strategy for development of Gazprom as a global energy producer is intended for building of the whole chain – from hydrocarbons production in the fields located outside Russia to their sales on new markets.

Within this strategy, the Company cooperates for development of hydrocarbon resources in Venezuela, Vietnam, India, Bolivia, Algeria, Libya, and the Caspian Sea, and studies possibilities of participation in oil and gas projects in Egypt and Pakistan.

Cooperation

Gazprom and Vietnamese oil and gas corporation Petrovietnam signed a cooperation agreement on November 20, 2006. The agreement provides for cooperation of the companies in the following areas:

• exploration, development, transportation, utilization, and sales of natural gas, oil, and other energy resources;
• engineering, construction, operation, and maintenance of oil and gas pipelines, oil and gas storage facilities, as well as distribution pipeline systems;
• diagnostics and control of technical condition and safety of gas and oil pipelines, as well as other facilities of gas and petrochemical infrastructure;
• utilization of oil and gas as a motor fuel, development and management of gas distribution systems and a filling stations network;
• processing of oil, gas and other types of hydrocarbon feedstock;
• supply of oil and gas derivatives as well as equipment for the oil and gas industry.

The document also provides for cooperation of the companies in prospective projects in third countries including joint exploration and development of gas and oil fields.

An agreement on further cooperation between Gazprom and Petrovietnam was signed on May 23, 2008. The agreement provides for geological exploration and further development of four new blocks on the Vietnamese shelf. Vietgazprom – a joint operating company – will be the operator of the project for development of these blocks. The agreement also provides that the parties establish a joint venture – Gazpromviet – to perform activities in Russia and third countries.

Gazprom and Petrovietnam signed a strategic partnership agreement on December 15, 2009. The document provides for cooperation of the companies in the following areas:

• continuing with the joint work at the blocks of the continental shelf of Vietnam under the previously concluded oil and gas contracts;
• studying of further cooperation opportunities in the free license blocks of the Socialist Republic of Vietnam;
• active cooperation in oil and gas projects in Russia, Vietnam, and third countries within the established Gazpromviet company (in particular, the parties are considering potential participation in development of the Naguman oil, gas and condensate field as well as in projects for exploration and development of subsurface areas in the Republic of Sakha, Eastern Siberia, and the Far East);
• development of scientific and technical cooperation;
• establishment of a joint steering committee and a joint working group.

Blocks Nos. 112 and 129–132

Geological exploration for block No.112 of the continental shelf of the Socialist Republic of Vietnam is being performed by Vietgazprom  – a joint operating company of Gazprom and Petrovietnam. The contract signed on September 11, 2000 provides for searching for, exploring, producing and selling hydrocarbons.

Gazprom and Petrovietnam signed an oil and gas contract for blocks Nos.129, 130, 131, and 132 in October 2008.

In addition to the strategic partnership agreement, Gazprom and Petrovietnam signed a supplementary agreement to the oil and gas contract for block No.112 on December 15, 2009. The supplementary agreement to the contract includes previous decisions on contract extension to the adjacent blocks made by the Government of Vietnam and provides for execution of both oil and gas contracts (for blocks No.112 and blocks Nos.129–132) by the same operator – Vietgazprom.

First success

Commercial influx of natural gas was obtained during testing of the first prospecting well in the Bao Vang area, when Vietgazprom performed geologic exploration at block No.112 of the continental shelf of Vietnam in the Gulf of Bac Bo in August 2007.

According to the survey data, gas influx made up to 400,000 cubic meters per day. The well stream also showed presence of gas condensate.

Besides, natural gas reserves were uncapped in the neighboring area of Bao Den in 2009. Currently, Vietgazprom is preparing the program of geological exploration works in this area.

Current status

Currently, Vietgazprom continues with geologic exploration on the continental shelf of the Socialist Republic of Vietnam. Exploration drilling is being performed in the already discovered field within block No.112 in the areas of Bao Vang, Bao Den, and Bao Trang.

2D seismic and geochemical survey is being performed under the contract for blocks Nos.129–132; processing and interpretation of acquired data are in progress. Operational estimation of hydrocarbon reserves will be performed and proposals on further areas of geological exploration activities in the field will be prepared in the nearest future.