Vietnam, Russia ink numerous energy deals

By Toan Dao   May 17, 2016 | 08:59 am GMT+7
Vietnam, Russia ink numerous energy deals
Vietnamese Prime Minister Nguyen Xuan Phuc (L) in talks with Russian Prime Minister Dmitry Medvedev. Photo by VGP/Quang Hieu

State-owned PetroVietnam and Russia’s oil and gas companies on Monday signed a number of cooperation agreements and memoranda to expand their ties in energy sector.

Five of the total of eight deals inked are in oil and gas sector. They were sealed in the presence of their prime ministers, Vietnam’s recently appointed Nguyen Xuan Phuc, whose Moscow trip became the first foreign visit since taking office last month, and Russia’s Dmitry Medvedev.

The Vietnamese national oil and gas company signed a cooperation agreement with Russia’s Rosneft, two memoranda of understanding and a personnel training pact with gas giant Gazprom, and a production-sharing agreement with Vietnam-based Vietsovpetro, its 51:49 joint venture (JV) with Russia’s Zarubezhneft.

“We must make sure that all agreements are implemented at the highest level, as a reflection of the high level of our relations,” Phuc said in a press briefing.

Russia reaffirmed its shared commitment to advancing the comprehensive strategic partnership between Russia and Vietnam, Medvedev said. “Not only do we supply our technology and produce oil and gas, but we actually performed a deposit swap, which is something we haven’t done with any other country,” he said.

New agreements:

PetroVietnam-Rosneft

PetroVietnam’s chairman Nguyen Quoc Khanh and CEO of Russia’s top crude producer Rosneft, Igor Sechin, signed a cooperation pact that foresees expanding collaboration in Vietnam, Russia and third countries in hydrocarbon exploration and production, refining, marketing and logistics, as well as staff training, Rosneft said in a statement Monday.

Under the agreement, the two partners will study potential options for joint projects and defining key cooperation conditions, as well as set up working groups for each of the cooperation directions, the Russian company said.

“The new stage of cooperation will allow the company to gain a new channel for crude sales in the Asia-Pacific region, and potentially, create additional synergy through refining in the region,” Sechin said.

Rosneft has already cooperated with PetroVietnam in a production-sharing agreement on gas and condensate production and geological exploration at Block 06.1 offshore Vietnam, where Rosneft Vietnam serves as an operator with a 35% stake. Rosneft Vietnam fully owns the neighboring 05-3/11 block.

The two companies are also partners in the Nam Con Son pipeline carrying gas and condensate from offshore blocks to onshore power plants.

PetroVietnam-Gazprom

PetroVietnam’s MOUs with Gazprom envisage exploring the possibility of using gas from joint projects offshore Vietnam, as well as Gazprom’s LNG for power generation in Vietnam. The companies set up a JV for gas motor fuel production last October.

PetroVietnam and Gazprom have two JVs, VietGazprom and GazpromViet, developing fields offshore Vietnam and in Russia’s Orenburg and Yamal Nenets regions, accordingly.

An additional agreement between the two companies signed Monday is about collaboration in education.

PetroVietnam unit, private firms-Zarubezhneft

Vietnam’s PetroVietnam Exploration and Production, Bitexco and Sovico Holdings signed a 30-year production-sharing agreement on Vietnam’s offshore Block 16-1/15 with Russian Zarubezhneft, which participated as part of its VietsovPetro.

The project, worth at least $50 million, envisages two development phases, including seismic data interpretation and two exploration wells drilling in phase one in the first three years, and sampling exploration and a survey well drilling in the second phase in the following two years, Zarubezhneft said in a statement Monday.

Vietsovpetro will operate the project with a 52% stake, with PVEP holding 29%, and Bitexco and Sovico owning 10% each, according to Zarubezhneft.

Apart from Vietsovpetro, Zarubezhneft has a joint venture with PetroVietnam in Russia, the 51:49 JV Rusvietpetro working in Russia’s Yamal Nenets autonomous region.

Other agreements between the two countries included an MOU between Russian Direct Investment Fund and Vietnam’s State Capital Investment Corporation (SCIC) foreseeing each side investing $250 million, in joint non-energy projects and helping Vietnam’s large and medium-sized businesses enter Russia.

 
 
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