Gas agreements signed for block 11-2, offshore Vietnam

Offshore staff

Tran Ngoc Canh, president and CEO of Vietnam Oil and Gas Corp. (Petrovietnam), and Yi, Ok-Su, president and CEO of Korea National Oil Corp. (KNOC) signed an agreement on the purchase and sale of natural gas from block 11-2, known as GSPA. Witnesses for the signing were Vietnamese Prime Minister Phan Van Khai and his Korean counterpart, Prime Minister Lee Hae Chan, who is on a visit to Vietnam to attend The 3rd Korea – Vietnam Joint Meeting for Mineral Resources and Energy Cooperation.

After the signing of the interim GSPA, the construction for the development of Rong Doi and Rong Doi Tay gas fields started in December 2004, targeting first gas production in October 2006. KNOC is expected to invest approximately $300 million in the field development, including a floating storage facility, a subsea pipeline, and the drilling of necessary gas production wells.

Rong Doi and Rong Doi Tay gas fields total reserves are estimated to be 856 bcf of gas and 22.8 MMbbl of condensate. Block 11-2 is expected to produce and deliver to Petrovietnam approximately 130 MMcf/d of natural gas over 23 years from the first gas delivery. Produced gas will be used for electricity generation and fertilizer production.

KNOC will also undertake another exploration well for additional gas reserves on May 28, and if successful the well will be tied to Rong Doi and Rong Doi Tay gas field in 2010. This will increase the natural gas reserves in the area. Right after this well, KNOC will drill another oil exploration well.

KNOC is also a partner of the block 15-1 Petroleum Exploration and Production contract, operated by Cuu Long Joint Operating Co. (CLJOC), together with SK Corp., Petrovietnam Exploration and Production Co. (PVEP), ConocoPhillips, and Geopetrol. Block 15-1 is in the area near Su Tử Ðen, Su Tử Vàng, Su Tử Trắng structures are located. Oil production of Su Tử Ðen, field in Phase I is approximately 75,000 b/d. Su Tử Vàng and Su Tử Trắng fields are currently under exploration development phase.

04-26-05