Identifying challenges at the East Sea Petroleum Operation Company in 2023

According to the report of BIENDONG POC, in 2022, this unit exceeded all major business targets assigned by PVN and GPEPI. Specifically, gas output reached 1.46 billion m3, as 107% of the year plan (finished 23 days before the plan). The condensate output reached 2.2 million barrels, as of 128% of the year plan (72 days ahead of schedule).

The company put up for sale 15 condensate trips (10 offshore and 5 onshore trips), achieving a turnover of USD 528 million, equal to 152% of the year plan (114 days ahead of the plan).

From the time of exploiting the first commercial gas flow (September 6, 2013), BIENDONG POC has completely safely exploited more than 16.7 billion m3 of gas and 26.81 million barrels of condensate with the value equivalent to 4.5 billion USD on the total cost of 3.69 billion USD.

Mr. Ngo Huu Hai - General Director of BIENDONG POC directs production on Hai Thach - Moc Tinh rig. Documentary photo.

In particular, BIENDONG POC has reached the milestone of 10 years (October 10, 2012 - October 10, 2022) of safe operation without accidents. However, in 2023, BIENDONG POC will face many difficulties and great challenges, including:

1/ The mining equipment system, after more than 11 years of continuous operation, revealed weaknesses that need to be reviewed, maintained, and replaced more and more.

2/ The complexity of the Hai Thach - Moc Tinh field group in the geology-mining technology (flood situation, condensate banking...) increasingly adversely affected the mining situation in the short term and the potential gas supply in the long term.

3/ The parties were not consensus in the process of conducting exploration and expansion activities in blocks 05-2 and 05-3 in the extreme Southeast sea of Vietnam and backlog issues related to the production sharing contracts (PSCs).

Meanwhile, due to the decrease in output of neighboring blocks, the buyer (Vietnam Gas Corporation - PVGas) is asking the Company to supply the maximum gas output in 2023. Faced with these difficulties and challenges, PVN and its partner Gazprom International B.V (GPEPI) agreed to approve the output target for 2023 through the meeting of the Management Committee of the blocks 05-2, 05-3 (MCM#)15) is 1.37 billion cubic meters of gas and 1.43 million barrels of condensate. However, in order to be able to meet PVGas' need for gas mobilization, BIENDONG POC will continue to study options for intervening and repairing wells to ensure the long-term exploitability of the field and maximize the condensate output.

In order to meet the output demand and complete the 2023 plan BIENDONG POC will closely coordinate with PVGas to supply fixed daily gas amount and complete the output plan approved by the Operation and Management Committees of Los 05-2, 05-3 and support exploration to achieve approval for the adjusted report to development of the Hai Thach – Moc Tinh group (revised FDP) before March 3, 2023, carry out the program on the report of the overall exploring the blocks 05-2 and 05-3, conduct the campaign to stop drilling rig TAR-2023 for inspecting, maintaining and the maintenance, repair works in the plan.

On the other hand, BIENDONG POC also proposed PVN soon consider and approve the modified reserve report (updated RAR), promote the consideration of the Government on a package of solutions to improve the economic efficiency of the blocks 05-2, 05 -3; soon approve the revised field development report (RFDP) as a basis for implementing thick knitting work, in order to maintain output in the coming years. Especially considering, assigning BIENDONG POC to be the operator of the potential and neighboring oil and gas blocks to take advantage of high-quality, experienced human resources and available technical infrastructure.