Petrovietnam signs oil and gas product sharing contract with Japanese contractor

In Hanoi, the National Energy Industry Group (Petrovietnam) together with the contractor consortium Japan Vietnam Petroleum Company Limited (JVPC - a 100% subsidiary of ENEOS Xplora, Japan) and the Oil and Gas Exploration and Production Corporation (PVEP) signed a petroleum product sharing contract (PSC) for Block 15-2, Cuu Long basin, offshore Vietnam's continental shelf.

The correctness of investment incentive policy

The contract has a term of 25 years, effective from April 7, 2025. The signing of the Petroleum Product Sharing Contract for Block 15-2 is also of special importance.

Deputy Prime Minister Bui Thanh Son speaks at the event. Photo: Thanh Tuan

This is the first petroleum contract to realize the new points of the 2022 Petroleum Law, affirming the correctness of the policy to encourage investment in oil and gas exploration and exploitation activities on Vietnam's continental shelf, creating a favorable investment environment and confidence for foreign investors, contributing to the realization of the country's economic growth target; not only marking a turning point in the legal process of petroleum activities, but also demonstrating the great efforts of the parties in institutionalizing, realizing, ensuring transparency, synchronization and feasibility in organizing and implementing new petroleum contracts in accordance with current legal regulations.

Speaking at the event, Deputy Prime Minister Bui Thanh Son affirmed that foreign investment plays an important role in Vietnam's key economic sectors, especially in the field of oil and gas exploitation.

Cooperating with foreign partners, including Japanese partners, in oil and gas exploration and exploitation with modern technology not only helps transfer new technology to the entire oil and gas industry but also helps Petrovietnam affirm its position on the world oil and gas map. Thereby, it makes an important contribution to the transformation of Petrovietnam into a National Energy Industry Group.

Signing ceremony of the oil and gas product sharing contract for Block 15-2, Cuu Long basin, offshore Vietnam's continental shelf. Photo: Thanh Tuan

According to the Deputy Prime Minister, the Block 15-2 Contract is an important step forward after the 2022 Petroleum Law takes effect. Immediately after the contract takes effect, contractors need to implement it vigorously and effectively in accordance with regulations and work commitments to increase the maximum output of Block 15-2 and increase the oil recovery factor. This is a very important task to ensure energy security.

Appreciating the role of operator JVPC and contractor PVEP over the past 25 years, the Deputy Prime Minister affirmed that the cooperation between Petrovietnam and Japanese partners in the past and in the future will make important contributions to the comprehensive and extensive cooperation between Vietnam and Japan.

At the same time, the Deputy Prime Minister requested Petrovietnam to closely coordinate in researching, proposing policy mechanisms, investment recommendations, creating favorable conditions for domestic and international investors in the oil and gas sector, promptly removing difficulties and obstacles in the spirit of harmonious benefits and shared risks to ensure legitimate rights for partners.

Concretize the policies of the Party, State and Government

Speaking at the signing ceremony, Deputy Minister of Industry and Trade Nguyen Hoang Long congratulated Petrovietnam and the contractor consortium.

“ I wish the exploitation project at Lot 15-2 to continue to reap many successes, bringing revenue to the Government and participating parties, contributing to the economic development of the country, ” said Deputy Minister Nguyen Hoang Long.

Deputy Minister of Industry and Trade Nguyen Hoang Long. Photo: Thanh Tuan

According to the Deputy Minister, PSC Block 15-2 was previously signed on October 6, 1992 by Japan Vietnam Petroleum Co., Ltd.; PSC Block 15-2 will expire on April 6, 2025. The results of oil and gas activities at Block 15-2 have discovered two commercial oil and gas fields, Rang Dong and Phuong Dong.

By the end of February 2024, the total cumulative production at Block 15-2 was 251.52 million barrels of oil and 195 billion cubic feet of gas were sold, with revenue reaching 15 billion USD, of which the Government's revenue was about 7.87 billion USD (including taxes and profit sharing with the host country).

“ It can be said that PSC Block 15-2 is one of Petrovietnam's successful oil and gas contracts , contributing to the overall success of economic cooperation and comprehensive strategic diplomatic partnership between Vietnam and Japan ,” the Deputy Minister of Industry and Trade emphasized.

The Deputy Minister added that in order to continue to maintain the exploitation, exploration and appraisal of new oil and gas discoveries in the area at Block 15-2, based on the proposal of the existing contractor consortium JVPC/PVEP and in accordance with the provisions of the Petroleum Law 2022, the Prime Minister has approved the results of the appointment of the contractor to sign the PSC of Block 15-2 with a term of 25 years from April 7, 2025.

“ The signing of PSC Lot 15-2 by Petrovietnam and the Contractor Consortium (JVPC and PVEP) and the granting of Investment Registration Certificates by the Ministry of Industry and Trade to project participants are necessary procedures to concretize the policies of the Party, State and Government, ” the Deputy Minister expressed.

According to Deputy Minister Nguyen Hoang Long, the signing of the PSC of Block 15-2 with JVPC and PVEP will take advantage of existing facilities and experienced personnel, exploit oil and gas resources, and contribute to the Government's double-digit growth target from 2025 onwards. At the same time, it will strengthen economic cooperation - an important pillar in the comprehensive strategic cooperation between Vietnam and Japan.

Deputy Minister of Industry and Trade Nguyen Hoang Long presents Investment Registration Certificates to project participants. Photo: Thanh Tuan

In addition, maintaining the operation of Block 15-2 as well as oil and gas activities on Vietnam's continental shelf has contributed to affirming Vietnam's sovereignty, sovereign rights, and jurisdiction over the continental shelf in the East Sea.

At the same time, the Deputy Minister suggested that immediately after the signing ceremony, the JVPC and PVEP Contractors need to properly implement the committed contents, promptly carry out related work to maintain stable exploitation activities at existing mines, continue exploration drilling at potential structures in Block 15-2 and drill densely to exploit the mine.

“ I believe that with 32 years of experience in cooperating to conduct oil and gas activities at Block 15-2, the JVPC and PVEP Contractor Consortium will continue to achieve success here in the coming time and discover commercial oil and gas flows at Dong Son structure in the third quarter of 2025 ,” the Deputy Minister expressed.

In the coming time, the Ministry of Industry and Trade will always facilitate, support and encourage oil and gas activities in Block 15-2 in accordance with Vietnamese law and international practices, ensuring legitimate rights and bringing practical benefits to investors as well as to Vietnam.

Also at the event, Petrovietnam General Director Le Ngoc Son said that, based on the provisions of Article 40 of the 2022 Petroleum Law, the Contractor Consortium has proposed to sign a new petroleum contract at Block 15-2. The contract will take effect from April 7, 2025 with the desire to continue implementing petroleum activities and enhance research and application of new technological solutions to maximize the use of resources according to Vietnam's needs.

The project has been continuously operated by JVPC since 1992. JVPC is a 100% owned subsidiary of ENEOS Xplora - an oil and gas exploration and exploitation unit under ENEOS Holdings (Japan). Regarding the interests of the participating parties, up to now, JVPC and PVEP continue to cooperate to implement the project within the framework of the new PSC Contract, in which JVPC holds 45% of the participation rights and continues to assume the role of operator.

Petrovietnam's General Director assessed that the PSC signing ceremony of Block 15-2 was also the result of a process of close, urgent, and transparent coordination between the parties under the strong direction of the Government and the Ministry of Industry and Trade.

The contract ensures stability and continuity of oil and gas activities at Block 15-2, contributing to maximizing budget revenue, ensuring energy security and moving towards sustainable development.

Block 15-2 has an area of ​​approximately 415.9 ^km2 , located offshore the Southeast region, in the central and northeastern part of the Cuu Long sedimentary basin, including two large oil and gas fields, Rang Dong and Phuong Dong, with an average water depth of 57-60 meters. This is the remaining area of ​​the previous oil and gas contract, after the parties have completed their repayment obligations as prescribed at the end of the exploration period, and is also the area that will continue to be developed in the new PSC Contract.

Thanh Binh

Source: https://congthuong.vn/petrovietnam-ky-hop-dong-chia-san-pham-dau-khi-voi-nha-thau-ban-380802.html