Oil giant courts Talisman

The state oil and gas firm PetroVietnam expects to sign a contract this month with Talisman, Canada’s largest independent oil and gas company, to explore oil and gas in block 15-2/01 in Cuu Long basin, off the southern coast of Vietnam.

In his report to Prime Minister Phan Van Khai last week, PetroVietnam’s president Tran Ngoc Canh said the deal would most likely be signed by the end of this month.

Four months ago, the prime minister approved the bidding results, which allowed PetroVietnam to go ahead with negotiations with Talisman.

Block 15-2/01 is believed to have great potential for oil as it is adjacent to the triangle of lions – Su Tu Vang (Golden Lion), Su Tu Trang (White Lion) and Su Tu Den (Black Lion) – in block 15-1, which is currently producing 65,000 barrels per day.

Block 15-1 is estimated to have a recoverable reserve of between 100 and 400 million barrels of oil, according to ConocoPhillips, the US company that holds a 23.25 per cent stake.

Block 15-2/01 is also next to block 15-2, which is producing around 70,000 barrels per day and is operated by Japan Vietnam Petroleum Company.The exploration contact would mark Talisman’s first foothold in Vietnam, the third-largest oil-producing country in Asia, with annual crude oil exports of around 18 million tonnes.

Talisman is active in Southeast Asia, North America and the North Sea. It also explores oil in North Africa and in Latin America and Caribbean regions. Talisman has proven reserves of 1.5 billion barrels of oil equivalent and boasts a production rate of 438,000 barrels of oil equivalent per day, according to the company’s profile.

PetroVietnam said it will finalise two or three other exploration contracts this year with foreign oil and gas contractors, raising the total number of operating contracts to more than 30. By the end of last year, the corporation opened its bid for foreign contractors in Phu Khanh basin in the south central coast of Vietnam, which comprises nine blocks.

PetroVietnam reported its revenue for the first quarter of this year at VND34.2 trillion ($2.2 billion), equivalent to 40 per cent of its annual target. Vietnam’s oil output in the first quarter was reported at 4.6 million tonnes, decreasing 8 per cent compared with the same period last year. The corporation said it would cut oil production output from Bach Ho (White Tiger), the country’s largest oil field, to 10.5 million tonnes this year from 12.2 million tonnes in 2004.

Viet Nam Investment Review, April 18, 2005