Vietnam oil gas report q1 2016

Q1 2016
www.bmiresearch.com

VIETNAM
OIL & GAS REPORT
INCLUDES 10-YEAR FORECASTS TO 2024

Published by:BMI Research


Vietnam Oil & Gas Report Q1 2016
INCLUDES 10-YEAR FORECASTS TO 2024

Part of BMI’s Industry Report & Forecasts Series
Published by: BMI Research
Copy deadline: November 2015
ISSN: 1748-4375

BMI Research
Senator House
85 Queen Victoria Street
London
EC4V 4AB
United Kingdom
Tel: +44 (0) 20 7248 0468
Fax: +44 (0) 20 7248 0467
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© 2015 Business Monitor International Ltd
All rights reserved.

All information contained in this publication is
copyrighted in the name of Business Monitor
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DISCLAIMER
All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of
publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Business Monitor
International Ltd accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the
publication. All information is provided without warranty, and Business Monitor International Ltd makes no representation of warranty of any kind
as to the accuracy or completeness of any information hereto contained.


Vietnam Oil & Gas Report Q1 2016
INCLUDES 10-YEAR FORECASTS TO 2024

Part of BMI’s Industry Report & Forecasts Series
Published by: BMI Research
Copy deadline: November 2015
ISSN: 1748-4375

BMI Research
Senator House
85 Queen Victoria Street

London
EC4V 4AB
United Kingdom
Tel: +44 (0) 20 7248 0468
Fax: +44 (0) 20 7248 0467
Email:
Web:

© 2015 Business Monitor International Ltd
All rights reserved.
All information contained in this publication is
copyrighted in the name of Business Monitor
International Ltd, and as such no part of this
publication may be reproduced, repackaged,
redistributed, resold in whole or in any part, or used
in any form or by any means graphic, electronic or
mechanical, including photocopying, recording,
taping, or by information storage or retrieval, or by
any other means, without the express written consent
of the publisher.

DISCLAIMER
All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of
publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Business Monitor
International Ltd accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the
publication. All information is provided without warranty, and Business Monitor International Ltd makes no representation of warranty of any kind
as to the accuracy or completeness of any information hereto contained.

Vietnam Oil & Gas Report Q1 2016

CONTENTS
BMI Industry View ............................................................................................................... 7
Table: Headline Forecasts (Vietnam 2013-2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

SWOT .................................................................................................................................... 8
Industry Forecast ................................................................................................................ 9
Upstream Exploration ................................................................................................................................ 9
Latest Updates ......................................................................................................................................... 9
Structural Trends ..................................................................................................................................... 9
Table: Proven Oil And Gas Reserves (Vietnam 2013-2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Table: Proven Oil And Gas Reserves (Vietnam 2019-2024) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Upstream Projects ................................................................................................................................... 12
Table: Vietnam - Key Upstream Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Upstream Production - Oil ........................................................................................................................ 17
Latest Updates ....................................................................................................................................... 17
Structural Trends ................................................................................................................................... 17
Table: Oil Production (Vietnam 2013-2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Table: Oil Production (Vietnam 2019-2024) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Upstream Production - Gas ....................................................................................................................... 20
Latest Updates ....................................................................................................................................... 20
Structural Trends ................................................................................................................................... 20
Table: Gas Production (Vietnam 2013-2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Table: Gas Production (Vietnam 2019-2024) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Refining ................................................................................................................................................. 22

Latest Updates ....................................................................................................................................... 22
Structural Trends ................................................................................................................................... 23
Table: Refining Capacity and Refined Products Production (Vietnam 2013-2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Table: Refining Capacity and Refined Products Production (Vietnam 2019-2024) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Refined Fuels Consumption ....................................................................................................................... 26
Latest Updates ....................................................................................................................................... 26
Structural Trends ................................................................................................................................... 26
Table: Refined Products Consumption (Vietnam 2013-2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Table: Refined Products Consumption (Vietnam 2019-2024) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Gas Consumption .................................................................................................................................... 29
Latest Updates ....................................................................................................................................... 29
Structural Trends ................................................................................................................................... 29
Table: Gas Consumption (Vietnam 2013-2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Table: Gas Consumption (Vietnam 2019-2024) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Trade - Oil ............................................................................................................................................. 32
Crude Oil Trade Forecasts ...................................................................................................................... 32
Latest Updates ....................................................................................................................................... 32

© Business Monitor International Ltd

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Vietnam Oil & Gas Report Q1 2016
Structural Trends ................................................................................................................................... 32
Table: Crude Oil Net Exports (Vietnam 2013-2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Table: Crude Oil Net Exports (Vietnam 2019-2024) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Fuels Trade Forecasts ............................................................................................................................ 34
Latest Updates ....................................................................................................................................... 34
Structural Trends ................................................................................................................................... 34
Table: Refined Fuels Net Exports (Vietnam 2013-2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Table: Refined Fuels Net Exports (Vietnam 2019-2024) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Trade - Gas (Pipeline And LNG) ................................................................................................................ 36
Latest Updates ....................................................................................................................................... 36
Structural Trends ................................................................................................................................... 36
Table: Gas Net Exports (Vietnam 2013-2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Table: Gas Net Exports (Vietnam 2019-2024) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Industry Risk Reward Index ............................................................................................. 39
Table: Asia: Upstream Risk/Reward Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Table: Asia: Downstream Risk/Reward Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Vietnam - Risk/Reward Index .....................................................................................................................
Vietnam Upstream Index - Rewards ...........................................................................................................
Vietnam Upstream Index - Risks ................................................................................................................
Downstream Scores ................................................................................................................................

45
45
45
45

Market Overview ............................................................................................................... 47
Vietnam Energy Market Overview ............................................................................................................... 47
Oil & Gas Infrastructure ........................................................................................................................... 50

Oil Refineries ........................................................................................................................................ 50
Table: Refineries In Vietnam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Oil Storage Facilities .............................................................................................................................. 50
LNG Import Terminal ............................................................................................................................. 50
Gas Pipelines ........................................................................................................................................ 51
Table: Major Gas Pipelines In Vietnam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Competitive Landscape .................................................................................................... 53
Competitive Landscape Summary .............................................................................................................. 53
Table: Key Players - Vietnam Oil And Gas Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Table: Key Upstream Players . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Table: Key Downstream Players . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Company Profile ................................................................................................................ 56
Petronas Vietnam ....................................................................................................................................
PetroVietnam ..........................................................................................................................................
Rosneft Vietnam ......................................................................................................................................
Zarubezhneft/Vietsovpetro .........................................................................................................................
Other Summaries .....................................................................................................................................

56
59
67
70
73

Regional Overview ............................................................................................................ 83
Asia - Weak Oil Prices Will Hit Region's Long-Term O&G Production .............................................................. 83

© Business Monitor International Ltd

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Vietnam Oil & Gas Report Q1 2016

Glossary ............................................................................................................................. 94
Table: Glossary Of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Methodology ...................................................................................................................... 96
Industry Forecast Methodology ................................................................................................................ 96
Source ................................................................................................................................................. 98
Risk/Reward Index Methodology ............................................................................................................... 98
Table: Bmi's Oil & Gas Upstream Risk/Reward Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Table: Weighting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

© Business Monitor International Ltd

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Vietnam Oil & Gas Report Q1 2016

BMI Industry View
BMI View: Declining production and rising domestic consumption will end Vietnam's self-sufficiency in
crude oil and natural gas by 2019 and 2017, respectively. Consumption growth will be driven by a more
than threefold increase in the country's refining capacity over the next five years, as well as sizeable gains
in gas demand from the automotive and power sectors - characterised by the growing proliferation of
natural gas vehicles and gas-fired electricity generation.

Table: Headline Forecasts (Vietnam 2013-2019)

2013

2014e

2015f

2016f

2017f

2018f

2019f

349.2

311.0

444.0

464.3

480.0

485.0

466.1

Dry natural gas production, bcm

8.8

8.9

9.2

11.0

10.8

10.6

10.2

Dry natural gas consumption, bcm

8.8

8.9

9.2

11.0

11.2

11.3

11.1

Refined products production, 000b/d

150.8

151.5

151.8

197.3

296.0

444.0

510.6

Refined products consumption & ethanol, 000b/d

471.5

485.7

502.7

520.3

538.5

557.4

574.1

108.70

99.50

55.00

54.00

53.00

60.00

64.00

Crude, NGPL & other liquids prod, 000b/d

Brent, USD/bbl

e/f = BMI estimate/forecast. Source: EIA, BMI

Latest Updates And Key Forecasts
■

Declining production and rising domestic consumption (alongside more than a threefold increase it the
country's refining capacity over the next five years) will see Vietnam become a net importer of crude oil

and natural gas from 2019 and 2017, respectively.

■

Our natural gas consumption forecasts for Vietnam assumes that two proposed LNG import terminal
projects, the Thi Vai and Son My terminals, will become operational by 2017 and 2018, respectively.
Delays or cancellations to these projects could result in Vietnam experiencing a gas deficit in the
medium-to-long term.

■

Russia continues to maintain a large presence in the Vietnamese O&G sector. In addition to holding
exclusive rights to a 49.0% stake in PetroVietnam's (PVN) Dung Quat refinery, Gazprom formed a
natural gas vehicle joint venture with PVN on October 15 2015 to invest up to USD1.0bn to build up
CNG filling stations and refitting stations in Ho Chi Minh City. This moves grants Russia early exposure
to Vietnam's fast growing natural gas vehicle sector.

■

Exploration efforts remain relatively robust in Vietnam's offshore blocks, though ongoing maritime
dispute with China impedes all such efforts in the highly prospective South China Sea.

© Business Monitor International Ltd

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Vietnam Oil & Gas Report Q1 2016

SWOT

Vietnam Oil And Gas SWOT

Strengths

■

Good maritime links to other Asian markets.

■

Relatively open to foreign investment.

■

Solid economic performance over the next decade will underpin steady growth in
fuels consumption.

Weaknesses

■

Government sets the domestic retail prices of fuels and, as such, unexpected price
hikes could adversely impact consumption growth.

■

State presence in both the upstream and downstream remains substantial, through
national oil and gas arm PetroVietnam. The need to appease PetroVietnam in key
contract negotiations creates a difficult operating environment for private and
international investors.

Opportunities

■

Several large refinery construction projects in the pipeline, which will more than triple
the country's total distillation capacity by 2019. This offers downstream opportunities.

Threats

■

Relatively robust exploration in its offshore blocks.

■

Deficit in midstream infrastructure presents investment opportunities.

■

Tension with China over territory in the South China Sea curtails all exploration
activities in the disputed waters.

■

Delays or cancellations to proposed LNG import terminals may lead to a gas
shortage, leading the country to turn to other energy sources.

© Business Monitor International Ltd

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Vietnam Oil & Gas Report Q1 2016

Industry Forecast
Upstream Exploration
BMI View: Vietnam's crude oil and natural gas reserves will start to trend downwards from2016 and 2018,
respectively, as low oil prices slowdown offshore exploration and dissuade firms from bringing new
production sources online.

Latest Updates
■

Vietnam's proven crude oil and natural gas reserves will begin to dwindle gradually from 2016 and 2018,
respectively, as the pace of new discoveries lag reserves additions.

■

Strong pipeline of exploration efforts pose upside risk to our hydrocarbon reserves and production
forecasts, though progress will hinge on whether these projects can prove economic amid the current
lower oil price environment.

■

Although nearly all of the country's hydrocarbon production occurs offshore, Malaysia-based
independent oil and gas firm Mitra Energy is exploring for both conventional and unconventional
resources in the onshore block MVHN/12KS in the Hanoi Trough. Completion of ongoing resource
evaluation works is expected by end-2015.

Structural Trends

Currently, nearly all of Vietnam's proven crude oil and natural gas reserves lie offshore, mostly in the Cuu
Long and the Nam Con Son basins off the country's southern coast - at the time of writing, proven oil
reserves stood at around 4.4bn bbl and gas reserves at 707.9bcm.

It is our view that while small-scale discoveries will uphold current reserve levels in the short-to-medium
term, Vietnam's oil and gas reserves will start to decline from 2016 and 2018, respectively, as the pace of
new discoveries lag reserves additions amid the current lower oil price environment. This will trim
Vietnam's proven reserves down to 4.0bn bbl for oil and 660bcm for gas by 2024.

Ongoing Exploration Provides Upside Risk

That said, Vietnam has a strong pipeline of exploration projects in its offshore acreages which could pose
upside risk to our long-term hydrocarbon reserves and production forecasts, though this will hinge on the
movement of crude prices in the coming years.

© Business Monitor International Ltd

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Vietnam Oil & Gas Report Q1 2016

Some notable exploration efforts include:
■

Gazprom: In 2014, Gazprom and PetroVietnam (PVN) signed an agreement regarding the joint
development of the Nagumanovskoye and the Severo-Purovskoye offshore oilfields. In May 2015, the
firms also began discussing potential joint venture in the offshore blocks 129-132, which would be the

first deepwater well in Vietnamese territory beyond a depth of 1,600 metres.

■

ONGC Videsh (OVL): The international subsidiary of Indian state-run Oil and Natural Gas
Corporation signed an agreement with PVN for mutual cooperation in the former's Block 128 in the Phu
Khanh basin and the latter's 102/10 and 106/10 blocks in the Song Hong basin.

■

Pan Pacific Petroleum: The firm's exploration campaign in Block 07-03, in the Nam Con Son basin has
yielded results from a discovery called Red Emperor. Flow testing was conducted in the CRD-3X
appraisal well and returned a flow rate of around 8,000b/d. Final investment decision was due in 2015,
with the block expected online in 2017.

■

Talisman: The Canadian firm is planning to drill two key exploration wells in 2014, in Blocks 135 and
136 in the Nam Con Son basin. The first, in Block 136, is targeting an extension of the Ca Rong Do
prospect in Block 07-03; the second prospect, Vung May, straddles both Blocks 135 and 136. The results
of the exploration activity are yet to be published.

■

Kris Energy: In March 2014, Kris Energy was awarded a production sharing contract (PSC) for Block
115/09 offshore Vietnam, in the Song Hong Basin. The PSC is for an initial period of four years, and the
company has announced that they will begin reprocessing legacy 2D seismic data and the acquisition of
3D seismic data later in 2015.

■

Eni: Italian firm Eni entered into production sharing contracts with PVN for several exploration blocks Block 122, 116 and 124 in H214. In March 2015, it launched seismic surveys in the offshore blocks 120
(where it holds 66.7% interest and KrisEnergy the rest) and 114 (which it jointly operates with Essar
Energy).

■

ExxonMobil: ExxonMobil and co-partner PVN discovered significant gas reserves in the Ca Voi Xanh
field in offshore block 117, 118 and 119, though official resource estimates have not be given.

■

Idemitsu Kosan/Sumitomo Corporation: In August 2015, Japanese firms Idemitsu Kosan and
Sumitomo Corporation will explore for hydrocarbons in the shallow water blocks 39 and 40/02, which
are located off the southwest coast of Vietnam, with funding from JOGMEC.

■

Mitra Energy: The independent Malaysia-based oil and gas firm is exploring for conventional and
conventional resources in the onshore block MVHN/12KS in the Hanoi Trough. The firm expects to
complete ongoing resource evaluation works at the block by end-2015.

South China Sea Dispute

While the South China Sea (SCS) is estimated to hold sizable oil and gas reserves, exploration and
development of assets in the area remain stunted due to ongoing territorial disputes, notably with China.
According to latest estimates by the EIA, the SCS's estimated proven and probable oil and gas reserves
amount to about 11bn bbls of oil and 5.7tcm of natural gas.

© Business Monitor International Ltd

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Vietnam Oil & Gas Report Q1 2016

Table: Proven Oil And Gas Reserves (Vietnam 2013-2018)

2013

2014

2015

2016f

2017f

2018f

Proven oil reserves, bn bbl

4.4

4.4

4.4

4.4

4.4

4.3

Proven oil reserves, mn bbl

4,400.0

4,400.0

4,400.0

4,385.3

4,354.8

4,332.5

0.0

0.0

0.0

-0.3

-0.7

-0.5

34.5

38.8

27.2

25.9

24.9

24.5

Natural gas proven reserves, tcm

0.7

0.7

0.7

0.7

0.7

0.7

Natural gas proven reserves, bcm

699.4

699.4

707.9

712.0

721.2

718.5

0.0

0.0

1.2

0.6

1.3

-0.4

79.5

78.7

76.6

64.7

66.8

68.1

2019f

2020f

2021f

2022f

2023f

2024f

Proven oil reserves, bn bbl

4.3

4.2

4.1

4.1

4.0

4.0

Proven oil reserves, mn bbl

4,287.2

4,208.4

4,116.0

4,099.6

4,019.2

4,014.3

Proven oil reserves, % y-o-y

-1.0

-1.8

-2.2

-0.4

-2.0

-0.1

Reserves to production ratio (RPR), years

25.2

25.7

26.2

27.1

27.7

28.8

Natural gas proven reserves, tcm

0.7

0.7

0.7

0.7

0.7

0.7

Natural gas proven reserves, bcm

716.1

704.1

695.3

679.3

671.0

655.5

Natural gas proven reserves, % y-o-y

-0.3

-1.7

-1.3

-2.3

-1.2

-2.3

Natural gas reserves-to-production ratio, years

70.2

71.2

72.5

73.1

74.5

75.0

Proven oil reserves, % y-o-y
Reserves to production ratio (RPR), years

Natural gas proven reserves, % y-o-y
Natural gas reserves-to-production ratio, years

f = BMI forecast. Source: EIA, BMI

Table: Proven Oil And Gas Reserves (Vietnam 2019-2024)

f = BMI forecast. Source: EIA, BMI

© Business Monitor International Ltd

Page 11


Vietnam Oil & Gas Report Q1 2016

Upstream Projects
Table: Vietnam - Key Upstream Projects

Est.Peak
Oil/Liquids
Range (b/d)

Est.Peak
Gas
Output
(bcm)

Type of
Project

Name

Field Name

Companies

Status

Blocks
117, 118
and 119

Ca Voi Xanh
(Blue Whale) ExxonMobil, PetroVietnam

Appraisal

Gas

Block
48/95,
MalayTho Chu
Basin

Petrovietnam Exploration
Production Corporation
(PVEP) (65.88%), PTT
Exploration and
Production Public
Company Limited - PTTEP
Block 48/95
(8.5%), Mitsui (25.62%)

Appraisal

Natural gas and
condensate

Ca Rong Do
(Red Emperor)

Petrovietnam Exploration
Production Corporation
(PVEP) (15%), Talisman
Energy (55%), Mubadala
Petroleum (25%), Pan
Pacific Petroleum (5%)

Appraisal

Oil & Gas

Block 52/97

PetroVietnam (43.4%)

Appraisal

Natural gas and
condensate

Mang Cau

Vietsovpetro Joint Venture
Co

Appraisal

Oil & Gas

Petrovietnam Exploration
Production Corporation
(PVEP) (50%),
Gau Chua, Gau SapuraKencana Petroleum
Ngua, Ca Cho
(40%), Pertamina (10%)

Appraisal

Oil & Gas

PetroVietnam (65.9%),
Mitsui & Co. (25.6%),
PTT Exploration and
Production Public
Company Limited - PTTEP
Block B
(8.5%)

Appraisal

Natural gas and
condensate

Ham Rong, Thai
Binh

Petronas (50%), ATI
Petroleum (10%),
PetroVietnam (20%),
Singapore Petroleum
Company (20%)

Development

0.2

Oil & Gas

Thien Ung

Vietsovpetro Joint Venture
Co

Discovery

0.22

Oil & Gas

JX Nippon Oil &
Energy Corporation (35%),
Block 05-1b &
Idemitsu Kosan (35%),
05-1c INPEX Corporation (30%)

Discovery

Gas &
condensate

Vietsovpetro Joint Venture
Co

Discovery

Oil

Block
07/03,
Nam Con
Son
Basin
Block
52/97
Mang
Cau, Nam
Con Son
basin
Block
10-11.1,
Nam Con
Son
Basin

Block B,
MalayTho Chu
basin

Blocks
102 &
106
Block
04.3,
Nam Con
Son basin
Block
05-1b &

05-1c
Block
09-3/12,
South

Sturgeon

© Business Monitor International Ltd

Page 12


Vietnam Oil & Gas Report Q1 2016

Vietnam - Key Upstream Projects - Continued

Name
Conson
Basin

Est.Peak
Oil/Liquids
Range (b/d)

Est.Peak
Gas
Output
(bcm)

Type of

Project

Field Name

Companies

Status

Lac Da Vang
Prospect

Murphy Oil (35%), SK
Energy (25%),
PetroVietnam (40%)

Discovery

Oil

Block 128

Block 128

ONGC Videsh(OVL)
(100%)

Exploration

Oil & Gas

Block
127, Phu
Khanh
basin

Block 127

AziPac Limited (25%),
Mitra Energy (75%)

Exploration

Oil & Gas

Block 125

Block 125

JSC Zarubezhneft,
PetroVietnam, Rosneft

Exploration

Oil & Gas

Block
122, Phu
Khanh
Basin

Block 122

PetroVietnam, Eni S.p.A

Exploration

Oil & Gas

Block
116,
Song
Hong
basin

Block 116

Eni S.p.A (100%)

Exploration

Oil & Gas

Block
124, Phu
Khanh
basin

Block 124

Eni S.p.A (60%),

PetroVietnam (40%)

Exploration

Oil & Gas

Block
102/10

ONGC Videsh(OVL) (40%),
Petrovietnam Exploration
Production Corporation
Block 102/10
(PVEP) (60%)

Exploration

Oil & Gas

Block
106/10

ONGC Videsh(OVL) (50%),
Petrovietnam Exploration
Production Corporation
Block 106/10
(PVEP) (50%)

Exploration

Oil & Gas

Exploration

Oil & Gas

Block
15-1/05,
CuuLong
Basin

Block
144, Phu
Khanh
Basin

Block 144

Petrovietnam Exploration
Production Corporation
(PVEP), Murphy Oil (65%)

Block
11-2/11,
Nam Con
Son
Basin

Block 11-2/11

Murphy Oil (60%)

Exploration

Oil & Gas

Block
13-03,
Nam Con
Son
Basin

Block 13-03

Santos Limited (65%),
Murphy Oil (20%)

Exploration

Oil

Block 04-2

Mubadala Petroleum
(90%)

Exploration

Oil & Gas

Block
04-2

© Business Monitor International Ltd

Page 13


Vietnam Oil & Gas Report Q1 2016

Vietnam - Key Upstream Projects - Continued

Name
Blocks
135 &
136/3

Block 51

Est.Peak
Oil/Liquids
Range (b/d)

Est.Peak
Gas
Output
(bcm)

Type of
Project

Field Name

Companies

Status

Blocks 135 &
136/3

Talisman Energy (40%),
Mubadala Petroleum
(20%), PetroVietnam
(40%)

Exploration

Oil & Gas

Kuwait Foreign Petroleum
Exploration Company
(KUFPEC) (35%),
Petrovietnam Exploration
Production Corporation
(PVEP) (30%), Mitra
Block 51
Energy (35%)

Exploration

Oil & Gas

Block 105

Block 105

KrisEnergy (100%)

Exploration

Oil & Gas

Block 120

Block 120

Eni S.p.A (66.67%),
KrisEnergy (33.33%)

Exploration

Oil & Gas

Block 05.3/11

Rosneft (100%)

Exploration

Oil & Gas

Block 114

Eni S.p.A (50%), Essar
(50%)

Exploration

Oil & Gas

Block 112
& 113
Block 112 & 113

PetroVietnam, Gazprom

Exploration

Oil & Gas

Block
129, 130,
131, 132

Block 129, 130,
131, 132

PetroVietnam, Gazprom

Exploration

Oil & Gas

Block
145, Phu
Khanh
Basin

Block 145

Petrovietnam Exploration
Production Corporation
(PVEP), Murphy Oil (65%)

Exploration

Oil & Gas

Block 39

Block 39

Sumitomo (25%), Idemitsu
Petroleum (75%)

Exploration

Oil & Gas

Block 40/02

Sumitomo (25%), Idemitsu
Petroleum (75%)

Exploration

Oil & Gas

Block
01/97

SapuraKencana Petroleum
(50%), PetroVietnam
Ho Xam South
(50%)

Production

4000

Block
16-1, Cuu
Long
basin

PTT Exploration and
Production Public
Company Limited - PTTEP
(28.5%), Soco
Te Giac Trang

International (30.5%),
(TGT)
PetroVietnam (41%)

Production

100000

Block
06.1,
Nam Con
Son
Basin

Rosneft (35%), ONGC
Videsh(OVL) (45%),
PetroVietnam (20%)

Production

Block
05.3/11
Block
114,
Song
Hong
Basin

Block
40/02

Lan Do

© Business Monitor International Ltd

Oil

0.3

Oil & Gas

1.75

Gas &
Condensate

Page 14


Vietnam Oil & Gas Report Q1 2016

Vietnam - Key Upstream Projects - Continued

Name
Block
06.1,
Nam Con
Son
Basin
Block 46Cai Nuoc,

MalayTho Chu
basin
Block
05-2,
05-3

Field Name

Companies

Status

Lan Tay

Rosneft (35%), ONGC
Videsh(OVL) (45%),
PetroVietnam (20%)

Production

SapuraKencana Petroleum
(36.8%), Talisman Energy
Block 46-Cai
(33.2%), PetroVietnam
Nuoc
(30%)

Production

Est.Peak

Oil/Liquids
Range (b/d)

Est.Peak
Gas
Output
(bcm)

Type of
Project

4.4

Gas &
Condensate

Oil & Gas

Mok Tin, Hai
Thak, Kim Cuong
Tay

PetroVietnam (51%),
Gazprom (49%)

Production

Tien Hai
C, Song
Hong

basin

Tien Hai C

Petrovietnam Exploration
Production Corporation
(PVEP)

Production

Block
12E, 12W

Premier Oil (53.125%),
Santos Limited (31.875%),
Petrovietnam Exploration
Chim Sao
Production Corporation
(Blackbird)
(PVEP) (15%)

Production

30000

0.256

Oil & Gas

Block 9-2

PetroVietnam (50%), Soco
International (25%), PTT
Exploration and
Production Public
Company Limited - PTTEP
Ca Ngu Vang
(25%)

Production

20000

0.54

Oil & Gas

Block
05.1A

Petrovietnam Exploration
Production Corporation
(PVEP) (50%), Vietnam Oil
Dai Hung
and Gas Group (50%)

Production

18000

Oil

White
Tiger,
Cuu Long
basin

Bach Ho

Vietsovpetro Joint Venture
Co

Production

263000

Oil

Korea National Oil
Su Tu Den, Su
Corporation (KNOC)
Tu Vang, Su Tu (14.2%), Perenco (23.3%),
Den Northeast,
Geopetrol (3.5%), SK
Su Tu Trang, Su
Corporation (9%),
Tu Nau
PetroVietnam (50%)

Production

46000

Oil

Cuu Long
(Block
15-1)
Block
15-2/01
Block
12W,
Nam Con
Son basin

Block
16-1
Phase II

13000

2

Oil & Gas

Natural Gas

Hai Su Trang,
Hai Su Den

PetroVietnam (40%),
Talisman Energy (60%)

Production

35000

Oil

Dua

Premier Oil, PetroVietnam,
Santos Limited (31%)

Production

8000

Oil

PTT Exploration and
Production Public
Company Limited - PTTEP
Ngna O, Voi
(28.5%), OPECO (2%),
Trang, Voi Vang
Soco International

Production

45098

© Business Monitor International Ltd

1.27

Oil & Gas

Page 15


Vietnam Oil & Gas Report Q1 2016

Vietnam - Key Upstream Projects - Continued

Name

Block
15-2

Block
11-2
Block
01/97 &
02/97,
Cuu Long
Basin
Block
46/02

Est.Peak
Gas
Output
(bcm)

Status

Est.Peak
Oil/Liquids
Range (b/d)

Rang Dong

JX Nippon Oil &
Energy Corporation
(46.5%), Perenco (36%),
PetroVietnam (17.5%)

Production

35000

Block 11-2

Petrovietnam Exploration
Production Corporation
(PVEP) (25%), Seoul City
Gas Co. Ltd (75%), LG
International Corporation,
Daesung Industrial,

Hyundai Corporation,
Daewoo International,
Korea National Oil
Corporation (KNOC),
Samwhan Corp

Production

Thang Long,
Dong Do

SapuraKencana Petroleum
(50%), PetroVietnam
(50%)

Production

18000

Oil

Song Doc

PetroVietnam (100%)

Production

30000

Oil

Field Name

Companies
(28.5%), PetroVietnam
(41%)

Type of
Project

Oil

1.71

Gas

Source: BMI Upstream Projects Database

© Business Monitor International Ltd

Page 16


Vietnam Oil & Gas Report Q1 2016

Upstream Production - Oil
BMI View: Vietnam's crude oil production will remain on an uptrend through to 2018, supported by
additional output from new fields and employment of EOR techniques at the country's large ageing fields.
Lack of new discoveries will nevertheless see output swing to a decline from 2019.

Latest Updates
■

Vietnam's crude oil production will increase by 9.2% over the next three years, from 444,000b/d in 2015
to 485,000b/d by 2018. This will largely be driven by additional production at the Te Giac Trang (TGT)
field, as well as the utilisation of enhanced oil recovery (EOR) techniques at mature fields, which will
help to sustain production and improve recovery rates.

■

We expect natural declines and the slowdown in upstream activities to hit the country's long-term
production potential, which will see oil output decline from 2019 and thereafter.

Structural Trends
Vietnam's crude oil production is forecasted to remain on an uptrend through to 2018, buoyed by additional
output from Hoang Long Joint Operating Company's TGT field in the Cuu Long Basin. The firm expects
the start-up of an additional production platform at the field to increase its output from 33,000b/d to
50,000b/d by 2018, contributing to the overall surge in Vietnam's oil production over the next two to three
years. Our data shows that Vietnam's crude oil, NGL and other liquids production will increase from
444,000b/d in 2015 to reach 485,000b/d by 2018.

The government remains firmly committed to its plans to increase the country's oil output, especially to
offset the loss in export revenue caused by the plunge in oil prices since H214. Start-up of production at
new fields such as Lam Son Joint Operating Company's Thang Long and Dong Do fields (online in 2015
and expected to reach peak production of about 19,800b/d by 2018) and Cuu Long Joint Operating
Company's Su Tu Nau field in Block 15-1 (targeting first production in November 2015), will provide a
boost to production in the short-to-medium term. Additionally, EOR techniques will also help to sustain
production at existing mature fields, albeit temporarily. Notably, these fields include the flagship Bach Ho
field as well as JX Nippon's Rang Dong oilfield in Block 15-2, Cuu Long Basin.

© Business Monitor International Ltd

Page 17


Vietnam Oil & Gas Report Q1 2016

Oil Production Forecast
(2013-2024)
60

600

40
400
20
200
0

2024f

2023f

2022f

2021f

2020f

2019f

2018f

2017f

2016f

2015f

2014

-20
2013

0

Crude, NGPL & other liquids prod, 000b/d (LHS)
Crude, NGPL & other liquids prod, % y-o-y (RHS)

f = BMI forecast. Source: EIA, BMI

However, we still expect production to decline from 2019, given our expectation for the current slowdown
in upstream investments and lower oil prices to weigh on Vietnam's long-term production potential. This
will limit discovery of new sources of output growth, which are required to offset natural declines at the
country's mature fields, notably the Bach Ho field.

The Bach Ho field, which accounted for 76.5% of Vietnam's total oil output in 2014, is depleting and
maintaining recovery rate is proving increasingly difficult for operator Vietsovpetro. New fields will
struggle to mitigate this lost output beyond 2019 even if new wells are drilled on the fringes of Bach Ho. As
such, we forecast Vietnam's crude oil production to decrease by 17.5% over 2019-2024, from 466,120b/d to

382,460b/d.

© Business Monitor International Ltd

Page 18


Vietnam Oil & Gas Report Q1 2016

Table: Oil Production (Vietnam 2013-2018)

Crude, NGPL & other liquids prod, 000b/d
Crude, NGPL & other liquids prod, % y-o-y

2013

2014

2015f

2016f

2017f

2018f

349.2

311.0

444.0

464.3

480.0

485.0

-2.8

-10.9

42.8

4.6

3.4

1.0

2019f

2020f

2021f

2022f

2023f

2024f

466.1

448.0

430.6

413.9

397.9

382.5

-3.9

-3.9

-3.9

-3.9

-3.9

-3.9

e/f = BMI estimate/forecast. Source: EIA, BMI

Table: Oil Production (Vietnam 2019-2024)

Crude, NGPL & other liquids prod, 000b/d
Crude, NGPL & other liquids prod, % y-o-y

f = BMI forecast. Source: EIA, BMI

© Business Monitor International Ltd

Page 19


Vietnam Oil & Gas Report Q1 2016

Upstream Production - Gas
BMI View: Vietnam's natural gas production will grow robustly over 2015-2016, underpinned by a rampup in production at existing fields and the start-up of new project. We highlight that natural declines at
maturing fields will weigh on overall production from 2017 and thereafter.

Latest Updates
■

We maintain our view that Vietnam's natural gas production is poised to uptrend in the short-term,
climbing by 19.5% between 2015 and 2016, on the back of upgrades to new fields and the start-up of new
projects.

■

Post-2017, however, we project natural declines at the country's more mature fields to begin to weigh on
overall production, seeing Vietnam's gas output to fall from 10.8bcm in 2017 to 8.7bcm by 2024.

Structural Trends
We forecast Vietnam's natural gas production to peak in 2016, rising by 19.5% from 9.2bn cubic meters

(bcm) in 2015 to 11.0bcm in 2016. This increase will be a result of a ramp-up in production at existing
fields as well as additional output contributed by the start-up of new projects. However, as the pace of new
production growth to lag natural declines at maturing fields, we see overall production embarking on a
gradual downtrend from 2017 and thereafter.

The short-term boost to Vietnam's natural gas production will come from the completion of Phase III
development at TNK-BP's Lan Do gas field in the Nam Con Son basin and a ramp-up in associated
condensates production at Cuu Long Joint Operating Company's Su Tu Den oilfield. Additionally,
commencement of production at Vietsovpetro's Thien Ung and Mang Cau fields in 2016 will also
contribute additional sources of gas output.

© Business Monitor International Ltd

Page 20


Vietnam Oil & Gas Report Q1 2016

Gas Production Forecast
(2013-2024)
15

30

20
10
10
5
0

2024f

2023f

2022f

2021f

2020f

2019f

2018f

2017f

2016f

2015f

2014e

-10
2013e

0

Dry natural gas production, bcm (LHS)
Dry natural gas production, bcm, % y-o-y (RHS)

e/f = BMI estimate/forecast. Source: EIA, BMI

However, we expect natural declines at maturing fields to begin to weigh on overall output from
2017. Major declines at some of the country's more mature assets, notably PetroVietnam's Tien Hai C field
in the Song Hong basin and TNK-BP's Lay Tay field in the Nam Con Son basin (which together accounted
for about 28.1% of Vietnam's total gas production in 2014), will take Vietnam's gas production from
10.8bcm in 2017 to 8.7bcm by 2024.

Upside Risk

Several discoveries made over the last few years pose upside risk to our long-term natural gas production
forecast for Vietnam, though development decisions will likely hinge on whether such projects prove
economic amid lower oil prices.
■

On August 11 2015, PetroVietnam reported first commercial gas flow from its Thai Binh gas
development project in the Song Hong basin, yielding initial gas flow rates of around 0.15mn cubic
meters (mncm) from its TB-1P well. Production is expected to be increased to 0.6mncm following tests
to the TB-2 well.

© Business Monitor International Ltd

Page 21


Vietnam Oil & Gas Report Q1 2016

■

ExxonMobil made significant gas discoveries from its Ca Voi Xanh field in Block 118, Phu Khanh basin

in 2012, which it is seeking to jointly-develop with co-partner, PetroVietnam. However, further research
into technology will likely be needed to help remove the high hydrogen sulphide and carbon dioxide
content found in the field's gas.

■

Japanese firms Idemitsu Kosan and Sumitomo Corporation found oil and gas in the offshore blocks 39
and 40/02, off southwest coast of Vietnam. While official estimates of the blocks' prospective resources
have not been released, the decision by both firms to pursue further exploration (as disclosed on August
2015) suggests that preliminary findings have been sufficiently promising.

■

Idemitsu also reported gas finds in the blocks 05-1B and 05-1C in the Nam Con Son basin, along with
joint-venture partners, JX Nippon and INPEX Corporation.

Table: Gas Production (Vietnam 2013-2018)

Geography

2013e

2014e

2015f

2016f

2017f

2018f

Vietnam

Dry natural gas production, bcm

8.8

8.9

9.2

11.0

10.8

10.6

Vietnam

Dry natural gas production, bcm, % y-o-y

4.8

1.0

4.0

19.0

-1.8

-2.3

Vietnam

Dry natural gas production, % of domestic
consumption

101.6

100.9

100.9

100.5

96.6

94.2

e/f = BMI estimate/forecast. Source: EIA, BMI

Table: Gas Production (Vietnam 2019-2024)

Geography

2019f

2020f

2021f

2022f

2023f

2024f

Vietnam

Dry natural gas production, bcm

10.2

9.9

9.6

9.3

9.0

8.7

Vietnam

Dry natural gas production, bcm, % y-o-y

-3.4

-3.0

-3.0

-3.2

-3.0

-3.0

Vietnam

Dry natural gas production, % of domestic
consumption

92.0

82.0

72.8

67.7

64.7

62.1

f = BMI forecast. Source: EIA, BMI

Refining
BMI View: Vietnam's refining capacity will more than triple over 2015-2020, as the Vung Ro and the Nghi
Son refineries come online in 2016 and 2017, respectively. Several more proposed facilities could see this
figure expand even further, though construction progress remains stunted amid insufficient funding.

Latest Updates

© Business Monitor International Ltd

Page 22


Vietnam Oil & Gas Report Q1 2016

■

We maintain our positive outlook on Vietnam's refining capacity growth over the next five years, which
we forecast will more than triple, from 140,000b/d in 2015 to reach 500,720b/d by 2019.

■

According to industry sources, construction of the Nghi Son refinery is more than 60.0% complete, and is
on course to become operational by mid-2017.

Structural Trends
Vietnam's refining capacity is set to more than triple over the next five years, from 140,000b/d in 2015 to
500,720b/d by 2019, driven by the start-up of new refineries - the Vung Ro (160,720b/d) and the Nghi Son
(200,000b/d), which we expect to come online in 2016 and 2017, respectively.

At present, nearly all of the country's refining capacity is provided by PetroVietnam's Dung Quat refinery,

with total nameplate capacity of 140,000b/d. The country also has a smaller refinery, the Ba Ria-Vung Tau
refinery with a capacity of 2,612b/d.

Upside Risk

Our Global Refineries database shows a further three proposed refineries, the Long Son, Nhon Hoi and the
Nam Van Phong refineries, which have been approved by the government but have yet to secure sufficient
funding to commence construction. These refineries will have a combined refining capacity of around
841,700b/d; if any of these projects come online within the next 10 years, Vietnam's total distillation
capacity will increase further in the latter half of our forecast period to 2024.

That said, rising concerns about diminishing local crude feedstock and lack of sufficient investment
incentives for high-cost projects are dampening the outlook for these projects. For instance, Qatar
Petroleum, one of the joint-venture partners in the Long-Son plant project, has announced its intention to
withdraw from the project on November 19 2015.

© Business Monitor International Ltd

Page 23


Vietnam Oil & Gas Report Q1 2016

Refining Capacity Forecast
(2013-2024)

2024f

2023f

2022f

2015f

2021f

80
2020f

0
2019f

90

2018f

250

2017f

100

2016f

500

2014e

110

2013e

750

Refined products production, 000b/d (LHS)
Crude oil refining capacity, 000b/d (LHS)
Crude oil refining capacity, utilisation, % (RHS)

e/f = BMI estimate/forecast. Source: EIA, BMI

The expansion in refining capacity will occur alongside rapid increase in Vietnam's refined fuels production
over the next decade, which we forecast will see average growth of 15.0% per annum over 2015-2024. The
largest production gains observed in the production of transport-related fuels, such as gasoline and diesel,
due to strong fuels demand from the transport sector, which will be fuelled by the growing appetite among
the country's expanding middle class for road travels and solid growth in car sales over the next five years.

© Business Monitor International Ltd

Page 24