Vietnam

JV “Vietsovpetro”

Vietnam occupies the priority place in JSC “Zarubezhneft” activities. The most effective “Zarubezhneft” project is Joint Venture “Vietsovpetro”, established in 1981 under Inter-Governmental Agreement on the parity basis with Oil and Gas Corporation “Petrovietnam”.

On June, 19^th, 1981, Intergovernmental Agreement for establishing joint Soviet-Vietnamese enterprise for oil and gas exploration on the South Vietnam shelf, Protocol on Provision of State Credit and Program for comprehensive geological-exploration operations and engineering-geological surveys for 1981-1985 were signed.

In 1986 JV “Vietsovpetro” started commercial oil production from Miocene-Oligocene pools of White Tiger field. A great success of Russian specialists was the discovery in 1988 of unique high productive oil pool in the granites of crystalline basement.

On July, 16^th, 1991, Governments of the two countries signed the Agreement on further cooperation in the field of oil and gas exploration and production on the South Vietnam shelf within the frames of Joint Soviet-Vietnamese enterprise “Vietsovpetro”.

JV “Vietsovpetro” participants: JSC “Zarubezhneft” and Oil and Gas Corporation “Petrovietnam”. As of January, 01^st, 1991, JV authorized capital was adopted at the amount of 1,5 billion USD, at that, each Party share is 50%.

In 1996 Russia fully reimbursed its contribution to JV “Vietsovpetro” authorized capital (750 million USD).

In December, 27, 2010 Intergovernmental agreement on prolongation of the activity of JV "Vietsovpetro" was signed. According to this agreement the share of Petrovietnam is 51%, Zarubezhneft's 49% and Joint Venture was prolonged for another 20 years' term till 2030.

Original recoverable oil reserves in White Tiger field were 191,1 million tons, in Dragon field – 20 million tons.

In the end of December, 1988, first million tons of oil were produced. In August 2012 200 million tons of oil were produced.

Annual oil production in JV “Vietsovpetro” has been increasing sharply and in 2002 reached its peak – 13,5 million tons. Afterwards, due to objective causes, oil production started to decrease: 2003 – 13,12 million tons, 2004 – 12,22 million tons, 2005 – 10,65 million tons, 2006 – 9,8 million tons, 2007 – 8,7 million tons, 2008 – 7,7 million tons, 2011 - 6.4 million tons.

From 1981 to 2011 JV “Vietsovpetro” had brought to the treasury of Vietnam more than 30 billion USD.

From 1981 to 2011 the Russian Participant had received from JV “Vietsovpetro” activities more than 9 billion USD.

Currently JV “Vietsovpetro” employs about 6 thousand people, including 500 highly qualified Russian specialists.

JV “Vietsovpetro” performs service operations:

Full package of construction works from engineering stage to well-head platforms construction.

All operations with regard to installation, commissioning and putting into operation platforms’ topsides and pipelines.

Operating technological facilities by its own workforce, periodic tests and maintenance of equipment.

Wells survey and oil and gas production stimulation, wells completion, wire-line operations, wells geophysical surveys.

Provision of storage areas and warehouses, supply of materials and spare parts.

Shore base services.

Production support services at offshore facility (provision of tow-supply boats, rescue unit, etc.).

Today JV “Vietsovpetro” is multiple-function and high performance enterprise, chief in the economy of Vietnam and in the vietnamese petroleum industry.

Unitized fields South Dragon – Sea Turtle (Block 09-3).

In 2002 a three-party contract was signed for development of Block 09-3 on Vietnamese shelf. The participants were: JSC “Zarubezhneft” (50%), subsidiary of Oil and Gas Corporation “Petrovietnam” “Petrovietnam Exploration and Production Company” (PVEP) (35%), Japanese company “Idemitsu” (15%). Block 09-3 is located on South Vietnam shelf, 150km from HoChiMinh City and 120km from VungTau Port shore base.

On the basis of prospecting-exploration activities results, in 2008 joint operating company “VRJ Petroleum Co” (Vietnam-Russia-Japan), established for Block 09-3 operations, declared a commercial discovery at Sea Turtle field.

Taking into account, that Sea Turtle field and South Dragon filed, located in JV “Vietsovpetro” area of operations (Block 09-1, participants: JSC “Zarubezhneft – 50%, OGC “Petrovietnam” – 50%), are the same pool it was decided to unitize them for joint development by JV “Vietsovpetro” participants and “VRJ Petroleum Co”. JV “Vietsovpetro” was nominated as operator for the joint development zone. Cumulative oil reserves are 56 million tons.

In January, 2010, a stable commercial oil production started at South Dragon – Sea Turtle field.