Vietnam PM Khai to meet with foreign oil/gas reps
HANOI - Vietnam Prime Minister Phan Van Khai is scheduled to meet
representatives from foreign oil and gas
companies next week for talks expected to
focus on difficulties trying to tap the country's
energy potential.
Officials from state oil monopoly Petrovietnam
would also attend the half-day meeting on
Tuesday, which some industry executives said
would provide an opportunity to air complaints
about problems in the sector.
In particular, industry sources said they hoped
attention would focus on a stalled project
between British Petroleum and Norway's Statoil
STAT.CN to exploit the country's largest gas
reserves.
More than four years after the reserves were
found off Vietnam's southeastern coast, the BP
and Statoil Alliance has been deadlocked with
Petrovietnam over pricing the gas.
``The question of progress on the gas project is
of course very important but I'm not sure if this
conference would be the place for such a
discussion,'' said one foreign oil executive.
``Obviously it's a big problem for the partners in
the project and for Vietnam if it doesn't go
ahead. To move on the project would send a
good message that would cheer up a lot of
people in the international community here.''
One executive said even if the BP-Statoil deal
was not raised, the overall issue of pricing gas
reserves needed to be discussed before other
projects reached the price stage.
A Petrovietnam official declined to give details,
but said the oil firm would give a brief
presentation, while Planning and Investment
Minister Tran Xuan Gia would also attend.
Oil executives said the presence of the
reform-minded Khai indicated that he could be
concerned about industry progress.
Some businessmen say the oil industry is
plagued by similar problems that affect other
sectors in Vietnam, such as complicated
licensing procedures and other red tape.
As communist-ruled Vietnam began to open its
doors in the late 1980s it was seen as a new
energy frontier. But by the mid-1990s oil
exploration and licensing had sagged, with some
foreign firms pulling out.
``The bubble that is Vietnam's upstream sector
is slowly deflating,'' British-based energy
consultants Wood Mackenzie wrote in a report
earlier this year.
``Foreign companies are indicating a growing
disenchantment with Vietnam as an E & P
(exploration and production) province, given
lower than expected success rates, the inability
to commercialise discoveries and to sign
contracts and the high cost of exploring in
Vietnam's waters.''
In the first six months of the year Vietnam
exported an estimated 5.56 million tonnes of
crude oil, up from 4.60 million tonnes in the
same period last year.
Vietnam has no refinery and exports most of its
crude. It plans to pump 12 million tonnes for the
full year, figures that make it a minor world
energy player.
However, one bright spot should be the
country's gas potential, industry sources said.
The BP and Statoil Alliance want to tap gas
reserves officially estimated at 58 billion cubic
metres.
The gas lies 370 km (231 miles) off Vietnam's
southeast coast in the Nam Con Son Basin in
the Lan Tay and Lan Do fields and is planned to
be used for state-owned gas-fired power
stations and an integrated power and urea
fertiliser plant.
In addition, a consortium led by the Korea
Petroleum Development Corp (PEDCO) last
March announced another gas find in the Nam
Con Son Basin of 34 billion cubic metres.
Figures for Vietnam's estimated recoverable
gas reserves were not immediately available.
REUTERS, July 3, 1998.
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