After 25 years of operation, with only a staff of more than 300 employees, this joint venture company has brought in more than 13 billion USD to the state budget.
Open doors in the era of innovation
Cuu Long JOC is one of the first foreign joint venture companies in the Vietnam Oil and Gas industry, established during the period of renovation and opening up, to meet the requirements of developing oil and gas activities in deep water, offshore areas and areas with particularly difficult geographical, geological, economic and technical conditions.
The history of the Vietnamese oil and gas industry also records that during this period, the Vietnamese State had no legal regulations on new forms of joint ventures. In order to soon sign a joint venture contract at Block 15-1, the Prime Minister requested the Ministry of Planning and Investment to issue a circular guiding the establishment of joint venture companies in the field of oil and gas exploration and exploitation, on the basis of flexible application of the Law on Foreign Investment in Vietnam and the Law on Petroleum.
White Lion trellis cluster.
The Circular issued in 1998 laid the foundation for the establishment of Cuu Long JOC with the participation of 5 different partners including PVSC - now PVEP (Vietnam), Conoco Limited (USA), Pedco and SK (Korea) and Geopetrol (France). This is also a testament to the important role of Cuu Long JOC as well as the strategic vision of the Party and State leaders for the development of the Vietnamese Oil and Gas industry in the period of opening and integration.
The Black Lion field was discovered in 2000, declared commercial on August 8, 2001 and produced first oil on October 29, 2003.
Black Lion - Northeast Mine, part of Black Lion Mine, continued to be put into operation by Cuu Long JOC in April 2010.
The Golden Lion Mine was discovered on October 23, 2001 and put into operation on October 14, 2008.
The Northeast Golden Lion and Southwest Golden Lion fields received their first oil in November 2013 and September 2014, respectively.
The Brown Lion field was discovered in September 2005 and officially produced its first oil in September 2014.
The White Lion gas field was discovered on November 19, 2003. In November 2016, the White Lion field began phase 1 exploitation. Then, in June 2021, the White Lion field recorded a new milestone in phase 2A, receiving the first gas flow.
With a series of mines discovered and continuously put into exploitation, Cuu Long JOC has become the second largest oil producer in Vietnam with production milestones: 100 million barrels in December 2007, 200 million barrels in March 2011, 300 million barrels in June 2016, 350 million barrels in 2019, reaching 400 million barrels of oil on November 11, 2022.
After 25 years of establishment and development, Cuu Long JOC has become one of the leading units in Vietnam operating in the field of oil and gas exploration and exploitation, ranking second in terms of production output of the Vietnam National Oil and Gas Group (Petro Vietnam) with a total production output of 410 million barrels of oil, approximately 600 billion cubic feet of gas, total revenue of 29.3 billion USD, contributing 13.1 billion USD to the State budget, on a total investment of 7.7 billion USD.
Ceremony to welcome the first gas flow of Phase 2A - White Lion Field.
Growing up with the development of Petro Vietnam
One of the highlights that cannot be ignored of Cuu Long JOC is the development of high-quality human resources in the country. Right from the first months of establishing the joint venture, the Vietnamese leaders of Cuu Long JOC were aware of and made constant efforts in organizing and motivating Vietnamese staff to proactively learn from foreign experts, gradually mastering advanced science and technology.
Each generation of Cuu Long JOC leaders has also boldly promoted a team of qualified and capable Vietnamese employees, gradually increasing the proportion of Vietnamese people in production management and mine development activities, maturing through each project.
Starting with only 31 staff, 1/3 of whom were foreign experts, after 25 years, the total number of staff, engineers and workers at Cuu Long JOC fluctuates over 350 people.
In particular, up to now, the number of Vietnamese staff and engineers has reached more than 94%. If previously, the Black Lion, Golden Lion and Northeast Black Lion mine development projects had 98-99% foreigners, from 2010 onwards, the White Lion mine development project increased the proportion of Vietnamese to 38%, followed by the Brown Lion mine development project at 51% and the Northeast Golden Lion mine development project (SV-15X, SV 16X) at 80%.
Up to now, the entire operating team on Cuu Long JOC's offshore projects is 100% Vietnamese; demonstrating a remarkable development in technical level as well as the extensive experience of the team of engineers and experts capable of undertaking most areas in the operation and management of mining clusters according to international standards.
Under the close attention and direction from PVEP and Petro Vietnam, in the 25-year journey of construction and development, the international labor collective of Cuu Long JOC has continuously strived to continuously implement many mine development projects.
Cuu Long JOC currently owns 9 oil and gas exploitation platforms, including a central technology platform and a crude oil storage and processing vessel FPSO (Floating Production, Storage and Offloading) and a series of internal pipelines connecting the field, with a total investment of billions of USD. The current average oil production of the entire Block 15-1 is about 38,000 - 40,000 barrels of oil/day, contributing to ensuring national energy security, bringing great economic efficiency to the country.
That is why, in recent years, when the Oil and Gas industry is going through an unprecedented difficult period, the activities of the front-end units are always closely monitored by Petro Vietnam's leaders. Cuu Long JOC is also the only level 3 unit in the Group that General Director Le Manh Hung directly visits to work with, periodically every 6 months throughout the past years, to discuss, review, and propose a series of solutions to overcome difficulties, focusing on the goal of completing the Group's management plan and, more broadly, medium and long-term goals.
Petro Vietnam General Director Le Manh Hung orients solutions to increase Cuu Long JOC output.
In particular, during the fierce years due to the COVID-19 pandemic, along with the large decline in natural production at the mines and investment restrictions due to the imminent expiration of the Production Sharing Contract (PSC), Petro Vietnam's leaders have oriented the unit on a series of solutions to manage fluctuations, manage operations, maintain safe and effective production, high uptime, optimize maintenance and repair plans, ensure energy supply for the mines, as well as technical solutions to maintain oil and gas production output, and evaluate opportunities to increase future output with potential new subjects.
Under the close guidance of Petro Vietnam's leadership, along with the efforts and solidarity of the international labor force in the joint venture, Cuu Long JOC has successively realized its annual growth target even during the most difficult period in the history of the Oil and Gas industry.
In 2020, Cuu Long JOC's oil production reached more than 13.65 million barrels, reaching 109.8% of the plan and selling nearly 11 billion cubic feet of gas.
By 2021, facing numerous challenges of deep oil price decline and long-term difficulty in recovery along with the global COVID-19 pandemic outbreak, Cuu Long JOC strived to achieve absolutely safe operating results, exploiting more than 13.3 million barrels of oil, reaching 102% of the plan, safely exporting more than 11 billion cubic feet of gas.
A highlight in 2021 is also the event of welcoming the first gas flow from the White Lion Project Phase 2A, contributing significantly to ensuring national energy security, stabilizing the macro-economy, and contributing a large source of revenue to the State budget.
In 2022, Cuu Long JOC successfully completed the drilling campaign, exploiting more than 13.86 million barrels of oil, exceeding the plan by 105% and safely selling more than 19.1 billion cubic feet of gas. November 11, 2022 marked a historic milestone for Cuu Long JOC, when the unit reached the production milestone of 400 million barrels of oil exploited at the Su Tu field cluster.
This is a historic milestone of great significance both economically and socially, making Cuu Long JOC the second oil and gas operator in Vietnam to achieve this production milestone. This event is not only important to Petro Vietnam, PVEP and foreign partners, but also marks the 25-year journey of persistent, hard-working and proud work of generations of leaders and employees at Cuu Long JOC.
It is expected that by the end of 2023, Cuu Long JOC will strive to achieve an output of 12.54 million barrels of oil compared to the target assigned by the Block 15-1 Management Committee of 12 million barrels of oil.
Petro Vietnam General Director Le Manh Hung emphasized that Block 15-1 is one of the leading flags in oil and gas exploitation activities in Vietnam, bringing benefits to participating parties, contributing significantly to budget revenue, and helping to ensure national economic and energy security.
Foreign partners at Lot 15-1 also affirmed that Cuu Long JOC is a symbol of successful cooperation on the path of common development; at the same time, they hope that the joint venture will continue to be successful and steady on the new journey of the Lot 15-1 Project, ensuring long-term benefits between the parties.
The "key" to decide the future
Because the PSC Contract for Block 15-1 will end in September 2025, it will lead to limitations in investment in exploitation development. Therefore, achieving the production target for 2023, as well as the following years of Cuu Long JOC, is extremely difficult.
To realize the medium and long-term goals, the prerequisite is that Cuu Long JOC must have a “new shirt”: the PSC Contract. The PSC Contract is an extremely important legal basis, the key to success for all activities of Cuu Long JOC.
Therefore, with the support of Petro Vietnam's leaders and partners, Cuu Long JOC hopes that the authorities will soon review and approve so that Cuu Long JOC can realize the goal of having a new PSC Contract in 2023, thereby opening up new prospects and opportunities to maintain and increase production output, achieving the set goals.
Regarding the medium and long-term development plan, Mr. Le Dac Hoa - General Director of Cuu Long JOC said that in the immediate future, it is necessary to focus on developing the White Lion Phase 2B field. This is the core task. The development of this project will not only help the unit increase the production of both oil and gas, but also solve the problem of gas shortage in the near future; creating a value chain for the following stages such as gas, electricity, fertilizer and services of Petro Vietnam.
With the results achieved over 25 years of operation, Block 15-1 has made important contributions to the overall oil and gas production of PVEP and Petro Vietnam. With the effectiveness of the project, along with the Petroleum Law 2022 taking effect from July 1, 2023, it is hoped that the project will soon have a new PSC Contract, to continue to promote efficiency, bring long-term benefits to the country as well as the parties participating in the project, while contributing to protecting the sovereignty of Vietnam's exclusive economic zone and continental shelf.
Bao Anh
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