PetroVietnam has doubts about finding large oil and gas fields

National oil and gas group, PetroVietnam, has warned that Vietnam should not pin its hopes on discovering big oil and gas fields in the future. In the meantime, demand for oil and gas continues to increase.
Some 40 % of the total electricity output of Vietnam is generated by gas-run power plants. Therefore, if Vietnam can increase its gas output in future years, this will partially help the country settle its electricity shortage problem. However, the problem is that there is not much hope of discovering new big oil and gas fields.

In 2010, PetroVietnam plans to put six new oil and gas fields into operation. However, this does not mean that the operation will lead to a considerable increase in the oil and gas output this year. Under PetroVietnam's plans, the crude oil output is expected to be 15 mm tons, while the gas output would be 8 bn cm, these figures that are lower than those of 2009.
As for gas, an increase in gas output will still depend on infrastructure conditions, including gas pipelines and consumption sources. Currently, PetroVietnam can provide several hundreds of thousands of cm of gas, mostly associated gas obtained during the crude oil exploitation.

In fact, contractors have found some gas fields capable for commercial exploitation with relatively large reserves. But without a pipeline they remain undeveloped. However, PetroVietnam is building other pipelines besides the three existing ones at Bach Ho, Nam Con Son and Ca Mau.
"Once the projects are completed, the total gas output to be provided ashore will increase by 30-40 % to 10-11 bn cm per annum. More importantly, new pipelines will encourage contractors to discover new gas fields in potential areas," said Phung Dinh Thuc, General Director of PetroVietnam.

However, Thuc admitted that there is little hope of discovering big oil and gas fields. While six oil and gas discoveries were announced last year, they were all smaller fields.
Meanwhile, the demand for crude oil and gas is set to increase sharply. Long Son oil refinery in Ba Ria-Vung Tau and Nghi Son oil refinery in Thanh Hoa province alone will need 20 mm tons of crude oil every year. Meanwhile, PetroVietnam is considering raising the capacity of Dung Quat Oil refinery from 6.5 mm tons to 10 mm tons. Therefore, PetroVietnam says, it needs to expand its operations overseas in order to increase output.

Thuc said that PetroVietnam is considering importing gas. The group has estimated that from 2012, Vietnam will have to import 4 bn cm of gas every year. From 2010, PetroVietnam will have its first products overseas with two oil fields, in Russia and Malaysia. The joint venture in Venezuela at Junin Field will also become operational this year.
It is expected that the total crude oil gained from overseas sources by PetroVietnam will be 500,000 tons this year. To date, PetroVietnam has invested in 21 projects overseas with a total capital of $ 600 mm.

PetroVietnam's Chairman Dinh La Thang has revealed that the group's outward investment will jump in the coming times, especially when PetroVietnam and Russian Gazprom carry out exploration and exploitation projects under the frame of the strategic partnership agreement.
PetroVietnam will also seek opportunities in Africa, America, South East Asia, Russia and the countries previously belonging to former USSR.