PetroVietnam, Gazprom seal agreement to develop 2 fields in Russia

Jun 23, 2015 12:00 AM

Vietnam's state-owned energy company Vietnam National Oil and Gas Group (PetroVietnam) and Russian partner Gazprom sealed a deal for Gazpromviet -- their joint venture firm -- to explore and develop the Nagumanovskoye and Severo-Purovskoye fields in Russia, according to a report by local media The Voice of Vietnam (VOV) Monday.

The agreement, signed June 18 during the 19th St. Petersburg International Economic Forum in Russia last week, sets out the conditions for both parties to develop the Nagumanovskoye oil, gas and condensate field in the Orenburg Region and the Purpovskoye gas and condensate oil field in the Yamal-Nenets Autonomous Area, where the VOV said Gazpromviet "has been permitted to exploit by local authorities."

PetroVietnam and Gazprom inked a framework agreement in 2014 for joint development of the two fields through Gazpromviet, which holds a subsurface use license for the fields. Gazprom has a 51 percent stake in Gazpromviet, with the remainder held by PetroVietnam.

According to Gazprom, the Nagumanovskoye field holds 204.8 billion cubic feet (Bcf) or 5.8 billion cubic meters (Bcm) of proven in-place gas reserves, 15.17 million barrels (1.683 million tons) of recoverable condensate reserves and 7.58 million barrels (960,000 tons) of recoverable oil reserves, while the Severo-Purovskoye field contains an estimated 1.60 trillion cubic feet (Tcf) or 45.5 Bcm of proven in-place gas reserves and 61.52 million barrels (6.826 million tons) of recoverable condensate reserves.

"The legally binding Agreement on major terms sets forth the key provisions of the projects, including the work schedule and sales strategy as well as common terms and conditions for financing and the price setting. I am confident that our experience in joint hydrocarbon development in Vietnam will help us be successful in large-scale projects across Russia,” Gazprom Chairman Alexey Miller said in a company press release.

PetroVietnam President and CEO Nguyen Quoc Khanh and Gazprom’s Miller also held discussions on further cooperation to expand the Dung Quat Oil Refinery -- Vietnam's only oil refinery – as well as the supply of liquefied natural gas (LNG) to the Southeast Asian country.

The Vietnamese national oil firm’s deal with Gazprom was not the only one concluded last week as it also entered into an agreement for oil and gas cooperation with Algeria’s Sonatrach over the next three years.

Under the agreement, Sonatrach would “facilitate PetroVietnam’s exploration and production adjacent to Bir Seba field (in Algeria) and provide oil and gas services to Vietnam,” PetroVietnam said in a June 17 announcement.

Bir Seba, which is expected to flow first oil in the third quarter of this year at 20,000 barrels a day, is the first foreign project that PetroVietnam’s upstream arm PetroVietnam Exploration Production Corp. is participating as an operator.

PetroVietnam has expanded its search for upstream assets both locally and overseas in recent years as the firm seeks to boost oil and gas supplies to meet rising domestic energy demand.

Last week, PetroVietnam completed the acquisition of Chevron’s upstream assets in the country.

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