Rosneft has started exploration drilling off the south coast of Vietnam, the company’s press service announced today.
The release highlights that it is the company’s first time drilling an international well as a sole operator. The Russian company, which has previously only operated deepwater offshore drilling inside of Russia, is hoping the project will give the company experience to tackle complicated domestic shelf projects that rely on American technology. Cooperation with Russian companies in offshore, Arctic, and shale drilling are banned by Western sanctions.
“I am sure that the experience gained in Vietnam will be used by the company not only in its activity in the southern seas; these acquired skills will find application in planning and implementation of upstream projects in remote areas,” Rosneft CEO Igor Sechin said in the statement.
The expected recoverable reserves of natural gas are estimated at 12.6 billion cubic meters (bcm) with 0.6 million tons of gas condensate, according to the statement. At 162 meters sea depth and design depth of about 1380, the “deepwater” well wouldn’t be allowed inside of Russia under the current sanction regime.
The well is located in the Nam Con Son Basin, 370 kilometers off the southern Vietnamese coast and will be serviced by the USAt 162 meters sea depth and design depth of about 1380, the well located at Block 06.1, will be managed by US oilfield services provider Schlumberger.
At 162 meters sea depth and design depth of about 1380 meters, the well located at Block 06.1 will be managed by US oilfield services provider Schlumberger.
Rosneft – the world’s biggest producer at 5.1 million barrels of oil equivalent per day – gained access to Vietnam’s offshore blocks when the Russian company acquired TNK-BP in March 2013. Rosneft already jointly produces gas from two offshore blocks, also in the Nam Con Son Basin. Rosneft works in cooperation with state-owned PetroVietnam and India’s ONGC in Block 06.1 and is the project operator in Block 05.3/11.
The gas fields in Block 06.1 Lai Tay and Lan Do, had an initial estimated 68 trillion cubic meters in gas reserves and condensate deposits. Drilling is carried out along with Japan Drilling Company (JDC).
Rosneft is the biggest gas producer in Vietnam, and in 2015, the gas produced in Block 06.1 satisfied 12% of Vietnam’s energy demand, and since it started pumping gas in June 2015, has produced a total of 46 billion cubic meters.
The foray into Vietnam should surprise no one, as Russia has long been building energy ties in Vietnam. As a token of partnership, Rosneft rival Gazprom Neft offered Petrovietnam partnership in an Arctic project. Beyond hydrocarbons, Vietnam has commissioned Russia to build the country’s first nuclear power plant.
Gas fields in Western Siberia – which helped make the Soviet Union and later Russia an energy power – are fast depleting, and projects in Vietnam and elsewhere are seen as cushions to keep both Rosneft and Russia’s oil output stable.