With a very important role in the national economy, in addition to stepping up oil and gas research, exploration and exploitation to increase reserves on the mainland and on the continental shelf of Vietnam, Vietnam National Oil and Gas Group (PetroVietnam) also boosts cooperation with its international partners engaged in different fields of the oil and gas industry. PetroVietnam has many successful cooperation projects with partners from Singapore. To learn more about this collaboration, Vietnam Business Forum interviewed Mr Nguyen Hung Dung, Deputy CEO of PetroVietnam, who is in charge of some cooperation projects with Singapore. Anh Dao reports.
Could you briefly talk about PetroVietnam’s cooperation and investment with Singapore partners? What are the key projects?
In oil and gas exploration, PetroVietnam and Singaporean partners signed five contracts as follows: (1) Production sharing contract (PSC) for Block 102 & 106 in the Gulf of Tonkin was signed on January 28, 2000. Singapore Petroleum Company (SPC) keeps 20 percent interest in the Petronas-led venture, which has found oil reserves in Ham Rong field and Thai Binh field. The joint venture is developing the two fields. and Singaporean partners signed five contracts as follows: (1) Production sharing contract (PSC) for Block 102 & 106 in the Gulf of Tonkin was signed on January 28, 2000. Singapore Petroleum Company (SPC) keeps 20 percent interest in the Petronas-led venture, which has found oil reserves in Ham Rong field and Thai Binh field. The joint venture is developing the two fields.
(2) PSC Contract for Lot 101-100/04 in the Gulf of Tonkin was signed on October 27, 2006. SPC holds 22.5 percent of stake in the joint venture operated by Salamander. With the approval of the Government of Vietnam, all interests in the venture were transferred to PetroVietnam Exploration Production Corporation (PVEP) in July 2012. The project is in the second phase of exploration.
(3) PSC Contract for Block 19 (in Nam Con Son Basin) was signed on August 21, 2009. SPC holds 20 percent of interests in the venture operated by Mitra Energy Limited. All stakeholders completed contract termination procedures.
(4) Su Tu Nau (Brown Lion) Topside and Pipeline Installation Contract was signed by Swiber Offshore Construction Co., Ltd of Singapore and PTSC Mechanical and Construction Co., Ltd (PTSC M&C) in Ho Chi Minh City on February 17, 2014. Cuu Long Joint Operating Company (Cuu Long JOC) is the investor of Su Tu Nau Project, PTSC M&C is the EPC contractor and Swiber Offshore Construction Co., Ltd is a contractor.
(5) PV Drilling VI jackup rig fabrication contract was carried out in Singapore by PV Drilling Overseas Joint Venture Company (PVDO), a member of PetroVietnam Drilling & Well Service Corporation (PV Drilling). PV Drilling VI rig designed by Keppel FELS Ltd of Singapore belongs to the most advanced class of oil rig. It is able to operate in water depths of 400 feet (121.92 metres), drilling depth of 30,000 feet (9,114 metres) and accommodate up to 150 men. The jackup rig is scheduled for delivery in the second quarter of 2015.
In addition to oil and gas exploration, PetroVietnam Group and Singaporean partners have also promoted cooperation in other potential areas. In September 2011, United Overseas Banking (UOB) and Overseas Chinese Banking Corporation (OCBC) of Singapore signed a credit contract worth US$105 million with PTSC South East Asia Pte Ltd (PTSC SEA), a Singapore subsidiary of PetroVietnam Technical Services Corporation (PTSC), to build a floating storage and offloading vessel (FSO) to serve Bien Dong 1 Project operated by Bien Dong JOC. The FSO was installed at the field site on June 4, 2013.
After this successful project, in December 2012, UOB and OCBC funded US$300 million to PTSC Asia Pacific Pte Ltd to build a floating production, storage and offloading (FPSO) unit, which is leased by Lam Son JOC. Currently, the FPSO is being converted at Keppel facility in Singapore. Banks have disbursed US$130 million for the project.
On September 9, 2013, Petroleum Equipment Assembly & Metal Structure Joint Stock Company (PVC-MS) signed contracts with McPEC Offshore & Marine Pte Ltd (McPECOM) of Singapore in Vung Tau City, Ba Ria - Vung Tau province. The three contracts signed included the Strategic Cooperation Agreement between PVC-MS and McPECOM, the Agreement on Purchase of 5 million PXS shares of PVC-MS, and the Contractor Agreement for Ehouses items at Su Tu Nau Project. The agreement on purchase of 5 million PXS shares was part of the plan to increase PVC-MS’s registered capital from VND406 billion to VND500 billion, approved by the General Meeting of Shareholders. The share distribution in private placement made McPECOM a strategic shareholder of PVC-MS. The shares were offered at VND10,000 per share, thus bringing VND50 billion of proceeds to PVC-MS. McPECOM becomes a major shareholder with a 10 percent stake at PXS. Currently, McPECOM has completed registration procedures for opening a foreign investor account in Vietnam.
To promote oil and gas trading with other countries in the region and the world, PetroVietnam Oil Corporation (PV Oil), a member of PetroVietnam Group, also established PV Oil Singapore Co., Ltd in Singapore. PV Oil Singapore imports petroleum and crude oil to serve the demand in Vietnam.
PetroVietnam always wants and encourages Singapore companies to expand investment and cooperation in oil and gas search, exploration and production in Vietnam, promote the sale of crude oil, and provide related services like financing and petroleum engineering with PetroVietnam.
How effective are cooperation projects with Singaporean partners for PetroVietnam in particular and for the Vietnamese economy in general? in particular and for the Vietnamese economy in general?
Oil and gas resources play a very important part in the country's development and PetroVietnam Group is tasked to harness these resources in the most effective manner and ensure and maintain its sustainable development. The above cooperation projects with Singaporean partners are typical ones of PetroVietnam Group and its units, thus contributing to developing and strengthening friendship and cooperation relations between the two sides, and effectively contributing to the country’s economic development. Group is tasked to harness these resources in the most effective manner and ensure and maintain its sustainable development. The above cooperation projects with Singaporean partners are typical ones of Group and its units, thus contributing to developing and strengthening friendship and cooperation relations between the two sides, and effectively contributing to the country’s economic development.
PetroVietnam is now calling investment capital for some projects. Would you mind telling us about the current and potential status of these projects? What incentives will investors receive when they invest in PetroVietnam’s projects?’s projects?
PetroVietnam is calling foreign investors for some key projects in need of big capital, modern technology and operational experience, including petrochemical, gas and electricity projects. Besides, according to the Prime Minister’s Decision 46 on PetroVietnam restructuring plan in the 2013-2015 period, PetroVietnam will also draw investment capital into non-core business fields, mainly performed by its affiliates. will also draw investment capital into non-core business fields, mainly performed by its affiliates.
PetroVietnam is the leading State business which receives a lot of care, direct instruction and preference policies of the Government. With these supports and policies, the group feels more confident to carry out construction, operation and development of national projects and ready to share with other investors.
Besides, when working with domestic and foreign investors, PetroVietnam appreciates legitimate requests from investors and send recommendations to competent State agencies to supplement and amend current regulations, and facilitate investors to participate in projects. appreciates legitimate requests from investors and send recommendations to competent State agencies to supplement and amend current regulations, and facilitate investors to participate in projects.
In addition, PetroVietnam is asking the Government for permission to apply some particular mechanisms and policies for projects in five core business fields. is asking the Government for permission to apply some particular mechanisms and policies for projects in five core business fields.
Do you have any message to partners and investors on the occasion of Vietnam - Singapore Business Forum 2014?
With optimistic signs of Vietnamese and global economies, I would like to introduce to potential investors cooperation opportunities with PetroVietnam to achieve the highest economic efficiency. Vietnam has taken steady and forceful steps where the success of the Group has contributed to the success of the country. I believe that deep and broad cooperation with a strong partner in Southeast Asia like Singapore will increase successes for both sides.
Potential investors, particularly Singaporean investors, can contact us to discuss specific cooperation projects. The country and the people of Vietnam in general and PetroVietnam in particular are always ready to welcome all investors. in particular are always ready to welcome all investors.
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After 52 years of construction and development, PetroVietnam has built a complete and synchronous oil and gas industry, from exploration and production to transportation, refining and processing. The group has made important contributions to ensuring national energy security. The current development and strength of PetroVietnam are accrued from the labour and devotion of generations of employees who always persist in all situations and never surrender to any hardship.
With its high production and business efficiency, PetroVietnam now contributes 25-30 percent of the State Budget’s revenue and contributes substantially to the national socioeconomic development. Not only pioneering in international cooperation and integration, attracting foreign investment capital into Vietnam and expanding overseas investment, the Group also actively and effectively serves as an economic locomotive of the country and a macroeconomic regulating instrument of the Government. Its key products like crude oil, petroleum, fertiliser, electricity and gas have helped stabilise the domestic market. In addition, the Group always actively participates in defending national sovereignty and national borders and always closely coordinates with the Ministry of Foreign Affairs, the Ministry of National Defence, and relevant bodies to develop oil and gas projects in the East Sea as planned, thus contributing to developing the country's economy and actively participating in safeguarding the national waters sovereignty. Together with effective production and business operations, the Group, with the Government, carries out many social security programmes.
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