PetroVietnam has purchased Chevron’s Vietnamese assets including acreage off the country’s continental shelf and an offshore pipeline project, the Vietnamese national announced on 17 June.
Under the deal it struck with Chevron, PetroVietnam will take 100% of the shares of its subsidiary companies – Chevron Vietnam (Block B) Ltd. and Chevron Vietnam (Block 52) Ltd. – holding assets in Block B, Block 48 & 95 (42.38% operating interest in both blocks, respectively), and Block 52/97 (34.40% operating interest). Also part of the deal was the Chevron Southwest Vietnam Pipeline Co. Ltd., which holds 28.7% interest in a pipeline project expected to deliver natural gas from offshore to users in Vietnam.
The acquired blocks cover 3200sq km of the Malay-Tho Chu basin, southwest of Vietnam, with water depths ranging from 60-80m. Estimates show in-place gross gas of 6 Tcf (170 Bcm), 4 Mcm of condensate (25.5 Mstb) and recoverable gas reserves (2P categories) at 3.78 Tcf (107 Bcm), 2 Mcm condensates (12.65 Mstb). PetroVietnam said that it expects these gas reserves will increase when additional exploration is conducted in the remaining contract area of the two PSCs.
While Chevron had selected its Vietnamese assets as a possible divestment opportunity, the supermajor and its partners had plans pending, awaiting commercial terms, for the Block B gas development project. The development would include installation of wellhead and hub platforms, a floating storage and offloading vessel, field pipelines, a living-quarters platform, a central-processing platform, and a pipeline to shore. The targeted maximum total production is 640 MMcf/d of natural gas and 21,000 b/d of liquids, Chevron stated in its May 2015 Vietnam fact sheet.
“The Block B gas project is Petrovietnam’s main oil and gas project,” said Nguyen Xuan Son, chairman of the members’ council of Petrovietnam. “The project is of major significance, contributing to ensuring the energy security of the country and promoting the socio-economic development of the region.”
The US$10 billion Block B-O Mon project is designed to transport gas from Block B and 48/95 and Block 52/97 in waters southwest of Vietnam to the O Mon, Kien Giang power plant hub, and to supplement gas supply to the Ca Mau gas fertilizer hub. PetroVietnam says the project intends to respond to the need to increase capacity beyond 4000 MW.
Son continued: “Petrovietnam’s completion of the acquisition of Chevron’s assets in Vietnam will facilitate the acceleration of field development and the implementation of the component projects in order to make gas more quickly available to serve the development needs of the national economy.”
Vietnam isn't the only Asian country where Chevron has shed assets. In 2014, the supermajor sold its Cambodian subsidiary (Chevron Overseas Petroleum (Cambodia) Ltd.), which held interest in Cambodia's Block A, to Singapore-based KrisEnergy for US$65 million.
Image: PetroVietnam
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