Hai Su Vang discovery could reverse Vietnam’s oil production decline

Murphy Oil's Hai Su Vang (HSV) discovery offshore southern Vietnam should trigger renewed interest in exploration in the area, according to Wood Mackenzie.

The recent HSV-2X appraisal well intersected 429 ft of oil within two reservoirs and flowed 6,000 b/d of 37° API crude during tests.

As a result, Murphy has upgraded recoverable resources toward the higher end of its initial 170-430 MMboe estimate, with further upside in additional shallow reservoir sections.

Angus Rodger, head of Asia-Pacific upstream analysis at Wood Mackenzie, said the oil find in the offshore Cuu Long basin was also the third largest in Southeast Asia since 2000, behind Gumusut offshore Malaysia and Banyu Urip onshore Indonesia.

Murphy, he added, has now delivered two of the region’s largest oil breakthroughs since the turn of the century, the other being Kikeh off Malaysia in 2002. And the company also participated in development of a third, the Shell-operated deepwater Gumusut.

Wood Mackenzie expects Murphy and its partners to develop HSV via an FPSO connected to wellhead platforms, with two further appraisal wells planned later this year in order to firm up reserves.

This would help Vietnam reverse a steady decline in oil production from 365,000 b/d in 2005 to under 120,000 b/d last year.

It should also strengthen interest in the country’s current offshore licensing round, which includes parts of the Cuu Long basin. Vietnam’s slow regulatory processes and a lack of data transparency have deterred would-be investors in the past.

"Positive changes to the petroleum law in 2023 and new leadership at the Ministry of Industry and Trade aim to improve investor confidence, but execution will be key," said Jasman Adam Leong, senior analyst at Wood Mackenzie.