Vietnam - Russia Oil and Gas Cooperation: Expansive and Effective

First of all, we can assert that Vietnam - Russia relations have been developing very well on the basis of friendship and cooperation that the Governments and peoples of the two countries have nurtured. A milestone event will take place in January 2015: Vietnam and Russia will celebrate the 65^th founding anniversary of diplomatic relations, marking a brilliant success on the way over and open a wide-open future with deeper cooperation.

 

Vietnam and Russia have traditional cooperation in various fields where oil and gas cooperation has always played its important and significant role. Since its inception, the development of Vietnamese oil and gas industry always has the hands and minds of Russian (former Soviet) experts and engineers. In foreign relations, PetroVietnam always regards Russian partners as strategic partners. Hence, on the continental shelf of Vietnam, there is not only Zarubezhneft - the oldest strategic partner of PetroVietnam with more than 30 years of cooperation but also Gazprom, Rosneft and other companies of Russia. The leaders of the Party, the State and the Government of Vietnam always value and support the development and expansion of Vietnam - Russia cooperation on the basis of equality and mutual benefit. According to that principle, we are always willing to have cooperation with Russian partners in oil and gas projects not only in Vietnam but also in Russia and third countries.

 

The cooperation between PetroVietnam and Zarubezhneft is seen in both Vietnam and Russia through two joint ventures, Vietsovpetro and Rusvietpetro. I must affirm that the success of these two joint ventures derived from the solid cooperation, mutual trust and sharing of both sides.

 

In Vietnam today, Vietsovpetro is the largest oil and gas producer and is the foreign contractor with the presence in the most oil and gas blocks in Vietnam. Besides tremendous accomplishments in the past more than 30 years of development, Vietsovpetro is also the training cradle for many elite officials and the builder of Vietnamese oil and gas culture. In 2014, despite difficulties, Vietsovpetro continued to achieve remarkable results in excess of most targets. For example, crude oil production output reached 5.36 million tonnes, exceeding the plan by 260,000 tonnes and completing the yearly plan 17 days ahead of schedule. It brought ashore more than 1.5 billion cubic metres of gas, equal to 127.3 percent of the full-year plan. Exploration works ended with impressive outcomes, with seven out of eight exploration wells found commercial reserves. Revenue and profit finished the year one month ahead of schedule while taxes paid to the State Budget finished two months before time.

 

In Russia, Rusvietpetro is exploring and exploiting oil in 13 wells in four blocks in Nenets Autonomous Region. In 2014, the production output reached 3.2 million tonnes of oil, 5 percent higher than the full-year target. Oil revenue was projected at 55.16 billion ruble, 14 percent higher than the plan. As of December 31, 2014, Rusvietpetro’s cumulative crude oil output reached 9.84 million tonnes of oil and the joint venture sold 9.76 million tonnes. In 2014, PetroVietnam took US$80.2 million from the first profit sharing in this joint venture.

 

Perhaps, this visit brought about multisided results for PetroVietnam.

 

First, during the visit, CPV General Secretary Nguyen Phu Trong and the high-level delegation of Vietnam witnessed the signing ceremony of four important documents between PetroVietnam with Russian partners, including the crude oil sale agreement (COSA) with Gazprom Neft; an agreement on the formation of a joint venture for exploration and exploitation of Dolinski well in Pechora Sea, Russia with Gazprom Neft; a framework agreement on gas pricing mechanism of Gazpromviet Joint Venture Company with Gazprom; and a memorandum of continued strategic cooperation with Zarubezhneft. For PetroVietnam, the signing of cooperation documents during the Russia visit by CPV General Secretary bore a special significance as it confirmed the interest of the Party and the State to the oil and gas industry while underlined the consistency in commitments to creation of optimal conditions for Russian partners to invest in Vietnam.

 

Second, during his visit to Russia, CPV General Secretary Nguyen Phu Trong spent his precious time to visit Zarubezhneft (Russia) - an expression of particular interest of the Party and the State to our oldest, important, traditional oil and gas partner. This visit was like a message to PetroVietnam for preserving, strengthening and developing the traditional relationship, like the recognition and expression of gratitude and appreciation to meaning contribution of Russian oil and gas experts and workers in Vietsovpetro Joint Venture, especially Russian specialists employed by OAO Zarubezhneft for the Vietnamese oil and gas industry.

 

Third, during the visit, high-level leaders of the two countries spent much time on bilateral oil and gas cooperation. Their exchange contents and results ended with many new cooperative policies and directions for both sides, especially for PetroVietnam in the coming time. At the highest level, the two sides agreed to continue to expand and develop cooperation between PetroVietnam and Russian oil and gas partners not only in oil and gas search, exploration and exploitation but to all other fields such as oil and gas processing and oil and gas construction. The two sides agreed to support and direct ministries and branches of the two countries to accelerate negotiations for early signing of the Intergovernmental Agreement on priorities for mineral extraction tax preferences to lay a solid legal basis for the development of Rusvietpetro’s projects in Russia.

 

With these results and significances, I believe that agreements signed will be implemented effectively and cooperative relations between PetroVietnam and Russian oil and gas partners will be brought to a new high.