OMV, Montedison to Explore for Natural Gas in Vietnam - Bloomberg (Update1)
By Alison Flint
Vienna, Sept. 20 (Bloomberg) -- OMV AG, Austria's biggest oil and gas company, and Italy's Montedison SpA won a contract to drill for gas in Vietnam, as both companies look to expand their exploration activities outside Europe.
Vienna-based OMV and Montedison will start drilling at the field in the Red River Basin, off the North Vietnam shore in 2001, OMV said in a faxed statement. The financial terms of the transaction weren't disclosed.
OMV, which produces oil and gas in the North Sea, Australia and Libya and explores for them in Pakistan, has recently turned to regions unusual for oil and gas exploration, aiming to double its production to 100,000 barrels of oil equivalent a day by 2002. In July, it restarted a search for oil and gas in Albania.
``They appear to be taking some risks in looking for new regions,'' said Ralf Burchert, an analyst at Erste Bank. ``They seize opportunities that arise. Rising (oil and gas) prices now let producers do that.''
Vietnam's oil and gas company Petrovietnam will take a 15 percent stake in the project, if the two European companies find enough gas for a gas well, OMV said.
Foreign Companies Return
International oil and gas producers, who rushed to look for opportunities in Vietnam in early 1990s, signing about 40 contracts there, but were discouraged by less-than-expected reserves and daunting bureaucracy, are returning as rising oil and gas prices allow them to take risks while the country moves to improve its investment climate.
Earlier this year, U.S.' Conoco Inc. signed contracts to explore two oil fields in Vietnam, bringing the number of its Vietnamese projects to four. Two weeks ago, BP Amoco and Statoil moved ahead their negotiations to explore a gas field, while Russia's Gazprom last week agreed to spend $68 million at another gas field.
Currently, Vietnam has 17 valid exploration contracts with international companies, according to Asia Pulse news agency. A Russian-Vietnam joint venture VietSovPetro, created in Soviet times and now owned by Petrovietnam and Russia's state-owned VTO Zarubezhneft, produces four-fifths of the country's oil and almost all of its gas.
In May, the country's parliament amended its legislation on investment in the oil and gas industry to give increase incentives for producers. It cut tax rates for companies developing deep-sea fields and allowed them to set aside part of their output to cover start-up costs.
Vietnam pumps about 300,000 barrels of oil a day, making it Asia's fourth-biggest producer behind Indonesia, Malaysia and Brunei. It also produces some 1.4 billion cubic meters of gas a year, mainly consumed domestically. The country's annual demand for gas may rise to 5 billion cubic meters in the next five years, Petrovietnam's chief executive Nguyen Nam said last week.
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Vietnam: New Exploration Deal Signed with Foreign Firms
HANOI, Sept 20 (AFP) - PetroVietnam has signed a production sharing contract to explore offshore oil and gas reserves with two foreign partners, according to an official.
The contract covers exploration and exploitation of Block 111, an area in the Red River basin, off the central coast of Ha Tinh and Quang Binh provinces, the official from the Vietnam Oil and Gas Corporation (PetroVietnam) said.
The two firms, OMV (Vietnam) Exploration GmbH, a branch of Austria's OMV Aktiengensellschaft and Edison International S.p.A, an industrial subsidiary of Italy's Montedison Group will each hold a 50 per cent stake in the contract.
PetroVietnam will be entitled to take an interest of 15 per cent upon the declaration of the first commercial discovery. The exploration is expected to begin next year.
PetroVietnam has signed 41 contracts with foreign companies since the enactment of the country's foreign investment law in 1988.
The local oil and gas industry has earned an average yearly turnover of US$103 million and an average export value of $101.5 million from foreign direct investment projects, according to the ministry of planning and investment, cited by Vietnam News daily. |
