Oil and gas discovery in Block 15-2/17, Cuu Long basin (offshore Vietnam)

The Hai Su Vang field is located in Block 15-2/17 in the Cuu Long basin, about 65 km from Vung Tau. This is an oil and gas block operated by Murphy Oil through a production sharing contract (PSC) between the partner's Murphy Oil (USA), PVEP (Vietnam) and SK Earthon (Korea). In the structure, PSC, PVEP hold 35% of the shares, SK Erathon holds 25% of the shares, Murphy holds 40% of the shares and is the operator of this oil and gas block.

At Block 15-2/17, the Operator deployed an exploratory well (Hai Su Vang-1X) in the fourth quarter of 2024. PetroVietnam Drilling and Well Services Corporation (PV Drilling) was selected for this project's exploratory drilling.

Block 15-2/17 (in the Cuu Long sedimentary basin, offshore Vietnam's continental shelf).

Block 15-2/17 in the Cuu Long Basin:

According to the Operator's report (Murphy): This result is consistent with the pre-drilling potential resource estimate of about 170 million barrels of oil to 430 million.

The analysis is still being implemented, with a plan to drill for oil and gas reserve appraisal at an appropriate time shortly to prepare a reserve report, basic design, and investment estimate. The plan is to then implement a mine development plan and put it into commercial exploitation.

Technically, this result reflects the tireless efforts, as well as the capacity of the Group's technical The National Energy Industry (Petrovietnam - PVN) and the Operator have gone through many evaluation processes, seismic interpretation, and object selection solutions (oil reservoirs) to position and trajectory of the wells accurately. The National Energy Industry (Petrovietnam and the Operator) has gone through many evaluation processes, seismic interpretation, and object selection solutions (oil reservoirs) to position and trajectory wells accurately. It was purely technical work and solutions, but their silent contributions contributed to the achievements we have today.

The Cuu Long Basin is one of the main oil exploitation areas of the Vietnam Oil and Gas Industry, with many successful oil and gas exploration and exploitation activities over the past 20 years. The discovery of new oil reserves in this area will increase production, revenue, and economic growth for foreign partners and Vietnam.

For the operator, this new oil and gas discovery will help optimize the solution for synchronous exploitation development according to the chain. From this discovery, the Operator can continue to deploy 1-2 more appraisal wells to accurately determine oil and gas reserves as a basis for preparing reserve reports, announcing reserves and building field development models.

Accordingly, with the existing facilities at Lac Da Vang Mine Cluster (Oil and Gas Block 15-1/05), the discovery of Hai Su Vang Mine (Oil and Gas Block 15-2/17) can be connected to the Lac Da Vang Exploitation Platform Cluster (existing) to reduce investment costs and operating costs throughout the commercial exploitation life cycle of the project.

Regarding oil and gas exploration, the discovery of Block 15-2/17 is not only a premise for PVN to develop exploitation in these blocks but also promotes exploration activities in neighboring mine clusters in the Cuu Long basin.

Outstanding marks in management and administration

Over the past 5 years, due to the many fluctuations in the world's political and economic situation, as well as the Covid pandemic affecting oil and gas exploration and prospecting activities. Therefore, the average production increase rate is estimated at 13 million tons/year (lower than the 1:1 ratio compared to the annual oil and gas production of about 18 million tons of oil equivalent/year). This is an alarming figure for the oil and gas exploration sector in recent years.

Regarding oil and gas exploitation, domestic output is decreasing by about 6% annually, currently only more than 8 million tons of crude oil (including condensate) and more than 6 billion m3 of gas. According to forecasts, oil and gas production will continue to decline until 2027 (after the Dai Hung phase 3, Lac Da Vang, Kinh Ngu Trang/Kinh Ngu Trang Nam and especially Block B come into commercial exploitation). Oil and gas from these new mine clusters will increase annual production by about 20 to 25% and even higher during the gas production stabilization phase due to increased demand from downstream power plants.

Cuu Long and Nam Con Son are basins with the best crude oil quality in the world (Brent), with high commercial value, suitable for input fuel of domestic refineries such as Dung Quat and Nghi Son. On the other hand, investment and exploitation conditions for nearshore oil and gas fields are also simpler than for gas fields, depending on the downstream.

Therefore, the oil and gas discovery (Oil and gas block 15-2/17) will help PVN optimize management and allocate resources for new investment projects abroad. With the existing infrastructure system (including rig system, exploitation wells, and gas transportation pipelines), discoveries in oil and gas blocks 15-2/17, as well as 16-2 will soon be deployed synchronously to put into commercial exploitation.

In the past 5 years, PVN has made many changes in its development strategy through solutions on management and interface management to optimize investment cooperation.

At the same time, PVN also recommended and advised the Prime Minister and ministries and branches so that the Law on Petroleum (amended) and the Law on Electricity (amended) could be issued promptly, keeping up with the development needs in the new situation. These changes have contributed to changing the appearance of the Group, creating many record achievements in revenue and profit for the state budget and foreign partners.

As known, the Petroleum Contract (amended) effective from July 1, 2023, has many breakthrough contents, more detailed and clear regulations on responsibilities between state management, enterprise management, the role of the Government, ministries, branches and the role of PVN. In particular, it specifies more clearly the role of state management and investors (contractors), thereby upgrading PVN's proactive role in investment approval and appraisal activities, including technical and commercial approvals such as Exploration programs, drilling programs, mine development plans (ODP/FDP), economic calculation, investment report.

On investment cooperation, by oil and gas contract (modified), to supplement some contents (with consulted regulations of the regional countries as Indonesia, Malaysia…), ensuring more functional flexibly, and more convertible to good conditions for participating of contractors, and investors of domestic and foreign.

Mr. Le Minh - Expert of Vietnam Energy Review