VIETNAM OIL AND GAS CORPORATION

PETROLEUM EXPLORATION
OPPORTUNITIES IN VIETNAM

Exploration Division - 2006

Content of the Presentation

Vietnam General Information

PetroVietnam Your Potential Partner
Exploration and Production Highlights
HC Potential
Petroleum Agreement Framework
Infrastructure and Downstream Projects
PetroVietnam E&P Strategy
Conclusions

Vietnam General
Information

Country Area: 329,600 km2

Population: 83 million
Currency: Dong
GDP Grow Rate: 8,4%
Major Export Products: crude
oil, rice, seafood,
Oil/Gas Production: 18.8
million tons/6.8 billion m3
Oil Consumption: 12 million
tons

PetroVietnam Your Potential Partner

Vietnam Oil and Gas Corporation (PetroVietnam) is the state
oil and gas corporation of Vietnam
50 subsidiaries and joint-ventures; 20,000 employees (2005)
2005 Revenue: more than 10 billion USD
PetroVietnams Business:
- Exploration and production
- Gas related products/pipelines
- Refinery and petrochemical products
- Construction (onshore/offshore projects)
- Trading and distribution of petroleum products
- Technical, insurance, financial services
PetroVietnam is authorised to enter petroleum contracts with
Oil Companies as well as to conduct operations overseas

Exploration and Production Highlights

Since 1988, 54 petroleum contracts have been signed, 7
billion USD invested
Exploration Database: 300,000 km 2D and 50,000 km2 3D
seismic; 600 exploratory wells
Success: more than 50 hydrocarbon discoveries; 20 oil and
gas fields producing or under developing
Oil producing 370,000 bopd from 7 oil fields in Cuu Long,
Nam Con Son and Malay-Tho Chu Basins.
Major target for oil production: fractured basement (90%)
Gas producing 670 mmscfd mainly from Nam Con Son and
Cuu Long (associated gas) Basins
Currently 5 oil fields and 5 gas fields/pipeline systems are
under development

Oil and Gas Production 2001-2005

250

245
224

200
149

150
128

125

124

137

106

100
78
60

50
0
2001

2002

2003

Oil (mmbbls)

2004
Gas (bcf)

2005

Current Exploration Activities

Major Oil Producing Area

Major Gas Producing Area

Total Current Contracts: 32

Production Acreages:
- Oil: 7
- Gas: 5
Development Acreages:
- Oil: 5
- Gas: 5
Recent Fields Discovered 2004-05:
- Su Tu Nau (Oil-Block 15-1)
- Su Tu Trang (Gas-Block 15-1)
- Ca Ngu Vang (Oil-Block 09-2)
- Te Giac Trang (Oil-Block 16-1)
- Rong Tre (Oil-Block 11-2)
New Contracts Sign 2006:
- Block 122 with Chevron/Petronas
- Block 124 with Pogo/KR
- Blocks 127 and 128 with ONGC

Petroleum Geology and Potential

Main plays of Vietnam Tertiary basins
Age
Pliocene

Upper Miocene

Code / Play

3d - Turbidite
3c - Clastic
4 - Carbonate

Middle Miocene
Lower Miocene

3b - Clastic
3a - Clastic
2d - Stratigraphic traps from clastic
wedges, updip

Oligocene

2c - Fluvial deltaic to shallow

marine sands
2b - Fluvial deltaic and Lacustrine
2a - Fluvial deltaic
5 - Extrusive

Pre-Tertiary

1 - Weathered and fractured

basement and Karstified
carbonate

Song
Hong

Phu
Khanh

Cuu
Long

Nam
Con
Son

Tu
Chinh

Malay
Thochu

Hanoi
trough

Vietnam HC Potential
Song hong basin
Reserves and recoverable
resources in the basin are estimated
about 1,100 MMscmoe.
Proven gas reserve is about 250
Bscm (excluded CO2).
Tien Hai C gas field in Hanoi trough
is in producing, and D14, Dong
Quan D fields, long term tests have
been carring out in order to evaluate
commercial capability of these
fields

Cc cu to khi nh cao mng Pre-Cz

Cc cu to vi dng by trong Oligoxen

Cc cu to trong trm tch vn Mioxen

Cc i tng by a tng trong Mioxen
Cc cu to khi carbonate m tiu Mioxen
Cc t gy c lin quan vi h thng du kh

Fields and prospects map of Song Hong Basin

Vietnam HC Potential (cont.)

Petroleum potential:

CUU LONG BASIN

Reserves and recoverable resources

in Cuu Long Basin are estimated
about 820 MMscm oil equivalent,
mainly in fractured basements.
Discovered reserves from basement,
Oligocene and Miocene sandstones
reservoirs are approximately 500
MMscm oil equivalent
Undiscovered resources is
approximately 320 MMscm oil
equivalent .
Cummulative oil & gas productions so
far from fractured basement are more
than 120 Mmscmoe indicating that the
fractured basement is very high
potential (70% of basin reserve and
resources)

Field and prospects map of Cuu Long Basin

Vietnam HC Potential (cont.)

Phu Khanh basin
A undrilled basin, petroleum
systems may be similar to nearby
Song Hong Basin (north) and Cuu
Long/Nam Con Son basins (south)
The recoverable resources of this
basin is approximately 370 MMscm
of oil equivalent, about 8% of total
Vietnam resources.

Tectonic elements map of Phu Khanh Basin

Vietnam HC Potential (cont.)

Nam Con Son basin
Oil & gas reserves and
recoverable resources in Nam
Con Son Basin are estimated
about 970 MMscm oil equivalent
Discovered reserve is about 250
MMscm oil equivalent , mainly
gas.
Undiscovered resources are
approximately 720 MMscm oil
equivalent

Fields and prospects map of Nam Con Son Basin

Vietnam HC Potential (cont.)

Tu Chinh Vung May basin
Total recoverable resources of
the basin is about 950 MMscm
oil equivalent.
Due to the lack of data, this
basin need to be explored to
clarify its petroleum potentials

Prospects map of Tu Chinh-Vung May Basin

Vietnam HC Potential (cont.)

MALAY - THO CHU basin
Oil & gas reserve and recoverable
resources in the Malay Thochu
basin (the Vietnam part) are estimated
about 370 MMscm oil equivalent,
mainly in Miocene sandstones (89%).
Discovered reserve is about 210
MMscm oil equivalent
Undiscovered resources is about 160
MMscm oil equivalent

Fields and prospects map of Malay-Tho Chu Basin

Petroleum Geology and Potential

Summary of total resources in
Vietnam Tertiary basins
(up to 12/2005)
Total Vietnam resources are evaluated
approximately 4,600 MMscm oil
equivalent (gas 55-60%)
Reserves 1,210 MMscm oil equivalent
(650 BCM gas, 560 MCM oil).
More than 70 discoveries. In the period
2001-2004: 15 discoveries; Incremental
reserves 226 MCM (~192 Million tons)
oe. 2005: 4 new discoveries.

Petroleum Geology and Potential

Discoveries

Undiscoveries

Total petroleum resources in Vietnam Tertiary basins (upto 31/12/2005)

Petroleum Geology and Potential

Predicted undiscovered resources of Tertiary basins in Vietnam

(in MMCMOE)

Petroleum Agreement Framework

TYPICAL PETROLEUM CONTRACT
Contract Type: Production Sharing Contract (PSC)
Contract Duration: Up to 30 years with maximum 7
years for Exploration phase
Contract Area: Up to 2 blocks or 4 blocks in special
cases (can be 30,000 sq. km)
Work Program and Budget: Proposed by Oil Companies
based on the potential of interested area. This is flexible
and no minimum requirements
Profit Sharing: Incremental tranches with agreed ratio
between PetroVietnam and Oil Company
Participation of PetroVietnam: Negotiable

Petroleum Agreement Framework

FISCAL REGIME
Royalty: 4-25% for Oil, 0-10% for Gas, depending on
rate of production (see next slide)
Enterprise Income Tax: 32% (exempt for first 2 years
and 50% reduction for 2 subsequent years possible)
Value Added Tax: 0-10%.
Export Tax: 4% for Oil, 0% for Gas (deductible)
Cost Recovery: maximum 70%
Other Financial Contributions: Negotiable

Petroleum Agreement Framework

ROYALTY
Crude Oil
Up to 20,000 bopd
Over 20,000-50,000 bopd
Over 50,000-75,000 bopd
Over 75,000-100,000 bopd
Over 100,000-150,000 bopd
Over 150,000 bopd
Natural Gas
Up to 5 MMcmd
Over 5 MMcmd-10 MMcmd
Over 10 MMcmd

Normal
6%
8%
10%
15%
20%
25%
Normal
0%
5%
10%

Incentive
4%
6%
8%
10%
15%
20%
Incentive
0%
3%
6%

Petroleum Contract Application

Competitive Bidding:
When there are more than one company interested
Time frame: occasionally set by PetroVietnam
a) Licensing Round:
Widely announced
Usually for large area(s) covering many blocks/acreages
b) Limited Bidding:
Invitation sent to limited number of qualified companies
Usually for a single acreage
Direct-Negotiation:
When there is only one company interested
Time frame: any

Petroleum Contract Application

COMPETITIVE BIDDING

DIRECT-NEGOTIATION

Bidding Announcement

Company Interest

Data Review

Data Review

Prepare and Submit Bid

Prepare and Submit Proposal

Bids Evaluation

Commercial Negotiation

Bidding Result Approval

Proposal Approval

Contract Negotiation

Contract Negotiation

Contract Approval & Signing

Contract Approval & Signing

Infrastructure and Downstream Projects

Nghi Son Refinery (2nd)

Dung Quat Refinery (1st)

Phu My GPP
Bach Ho Pipeline
Ca Mau GPP

SouthWest Pipelines

Bach Ho Gas Pipeline: (1997)

- 107 km pipeline, 100 bcf/year
Nam Con Son Gas Project: (2002)
- 370 km pipeline, 250 bcf/year
- 10 power plants, total 4,200 MW
- Fertilizer plant 800,000 MT/year
South-West Gas Project: (2010)
- >500 km pipeline, 220 bcf/year
- 9 power plants, total 3,000 MW
- Fertilizer plant 800,000 MT/year
Refinery:
- 1st Refinery: 6.5 MT/year (2009)
- 2nd Refinery: 5-7 MT/year (2012)

Nam Con Son Pipeline

PetroVietnam E&P Strategy

Improvement of oil recovery for producing fields

Effective development of marginal fields
Exploration in deepwater and frontier areas
Development of gas market and facilities
Improvement of human resources
Expansion of overseas activities
Improvement of international cooperation with
both IOCs and NOCs

Conclusions
Vietnam is an emerging country with high oil and
gas potential and demand
Discovered petroleum reserves of the country are 4
Bbo and 23 Tcf gas, only accounting for 20% total
potential resources
Tertiary basins of Vietnam have similar geological
and petroleum features; four of them have
encountered and produced oil and gas
Gas market in Vietnam is fast developing
Vietnam welcome all investors in oil and gas sector.
Foreign investment are protected and stabilized.
Petroleum policy is continuously improved.

Thank you for your attention!