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PETROVIETNAM UNIVERSITY

PETROLEUM ECONOMICS
Chapter 8

O&G Industry in Vietnam


Instructor: Hoang Hung, Ph.D.
Email: hungh@pvu.edu.vn
Mobile: 091 873 8 873

Content

1. Development History of O&G Industry


in VN
2. Vietnam Petroleum Potential

3. Petroleum Activities in Vietnam

4. PVN Restructuring
Hoang Hung, PhD

Petroleum Economics

1. Development History of O&G Industry in VN

1959

President Ho Chi Minh spoke of Vietnams


future Petroleum Industry when visited SU

1961

First Summary Report on VN geology and


Petroleum potentials compiled by SU and
Vietnamese experts*

27/11/1961

Hoang Hung, PhD

Geology Mission No. 36 was established


under General Department of Geology

Petroleum Economics

1. Development History (Cont.)

Geology Federation No. 36 (Lin on a


9/10/1969, cht 36) established

Vietnam General Department of Oil and


Gas established
3/9/1975
First Gas at Well 61 in ng C
commune, Tin Hi district, Thi Bnh
25/7/1976
Province

Hoang Hung, PhD

Petroleum Economics

1. Development History (Cont.)

Vietsovpetro JV established
19/06/1981

6/11/1984

First Fixed Platform (MSP-1) erected in Bch H


(White Tiger) Field
First ton of oil produced by MSP-1

26/6/1986

6/1990

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Vietnam Oil & Gas Corporation Petrovietnam


(Tng Cng ty Du kh Vit Nam) established

Petroleum Economics

1. Development History (Cont.)

1993

1993

2001
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Law on Petroleum promulgated

Construction of associate gas gathering system


from Bach Ho Field to B Ra - Vng Tu Gas
Power Plan and later, to Phu My Fertilizer Plan.

PVN reached 100 m tons of crude oil for export

Petroleum Economics

1. Development History (Cont.)

BSR, Construction of Vietnams


First Refinery kicked off in Dung
28/11/2005 Quat with investment capital of
nearly $3 bln

8/2006

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VIETNAM OIL AND GAS GROUP


(PVN) was established and
operated as a Holding Company

Petroleum Economics

1. Development History (Cont.)


Organization Chart of PVN
Council of Members

Board of Directors

Inspection Committee

Office

Dept. of Science & Engineering

Dept. of Staff and Organization

Dept. of O&G Processing

Dept. of F&A and Audit

Dept. of Training and HR Dev.

Dept. of Planning

Dept. of Investment & Development

Dept. of Construction

Dept. of Inspection

Dept. of Exploration

Dept. of Commerce and Market

Dept. of Production

Dept. of HSE

Dept. of Bidding Management

Dept. of Gas

Dept. of P. Contracts Management

Dept. of Electricity

Dept. of Overseas Project Mgmt

Representative Office in HCMC

Dept. of Legal Enforcement

Representative Office in A. Continent

Dept. of Foreign Relations

Representative Office in Russia & SNG

Hoang Hung, PhD

Petroleum Economics

1. Development History (Cont.)

PVN

Parent Company
(Holding Company)
Subsidiaries
Collaboration Companies
Research and training
Institutions

Hoang Hung, PhD

Petroleum Economics

Subsidiaries Under Direct Management of the PC

01. Ban QLDA Cm Kh in m C Mau


02. Ban QLDA Nh my Lc du Dung Qut (DQR)
03. Ban QLDA Cng trnh Lin hp LHD Nghi Sn (NSPM)
04. Ban QLDA Xy dng Trng HDKVN
05. Ban QLDA in lc DK Long Ph-Sng Hu (LHPP)
06. Ban QLDA in lc DK Vng ng-Qung Trch (VQPP)
07. Ban QLDA in lc DK Thi Bnh 2 (TB2PP)
08. Ban QLDA ng mi gin khoan t nng 60M nc
09. Trung tm ng cu s c trn du pha Nam (NASOS)
10. Chi nhnh T -Cng ty iu hnh DK Bin ng
(BDPOC)
11. Chi nhnh T-Cty NK & PPhi Than DK (PVCoal)
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Subsidiaries Under 100% financial control of


PVN

PETROVIETNAM
PVEP
BSR
PVCFC
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Subsidiaries where PVN dominates shares

PVN
1. PV Oil
2. PV Power
3. PV Drilling
4. PTSC
5. PV Trans
6. PVFC
7. PVI
8. Petrosetco
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Subsidiaries where PVN dominates shares


(cont.)

PVN
9. PVC
10. PVFCCo
11. DMC
12. PVTex
13. PVEIC
14. PVE
15. PVGas
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Collaboration Companies

PVN
1. Vietsovpetro (VSP)
2. Rusvietpetro
3. Nghi Sn (NSRP)

4. Ocean Bank
5. ng Dng Xanh Development Company
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Research and Training & Education Institutions

PVN
1. VPI
2. PVU
3. PVMTC
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2. Vietnam Petroleum Potential

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2. Vietnam Petroleum Potential (cont.)

Discovered Petroleum Reserves (mcm equivalent)

Basin

Total
Discovery
Reserve

Recovery

To
be taken
into Production

To be taken
into
Production if

Reserve Recovery Reserve Recovery

Production
Pending
Reserve Recovery

Total
(Source: PVN)
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2. Vietnam Petroleum Potential (cont.)

Reserve VS Recovery

MCME

Reserve
Recovery

To be taken into
Production

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To be taken into
Production If

Petroleum Economics

Production
Pending

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2. Vietnam Petroleum Potential (cont.)


Distribution of Petroleum Potential in Vietnam
Potential

. Discovered

MCME

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3. Petroleum Activities in Vietnam

3.1. E&P
3.2. Oil Refinery
3.3. Gas Processing Industry
3.4. Gas Electricity Industry
3.5. High quality O&G Service
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3.1. E&P

Of which:
60 ongoing
contracts
So far, 90
Among 60
contracts signed
ongoing
between PVN
contracts:
and various
47 PSC;
international
10 JOC
partners
1 BCC

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3.1. E&P (cont.)

Effective Contracts on Basin

Sng Hng

12

Ph Khnh:

T Chnh Vng My:

Nam Cn Sn:

18

Cu Long:

14

Ma Lai - Th Chu:
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3.1. E&P (cont.)

Fields in production

Song Hong Basin


Tin Hi C

ng Quan D
D14
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3.1. E&P (cont.)

Fields in production (cont.)

Cuu Long Basin


1. Bch H,
2. Rng,
3. Nam Rng i Mi,
4. Rng ng,
5. Phng ng,
6. Ruby,
7. Topaz,
8. Pearl,
9. S T en,
10. Te Giac Trang
11. S T Vng,
12. C Ng Vng,
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3.1. E&P (cont.)

Nam Con Son Basin


i Hng,
Lan Ty,
Rng i
Rng i Ty
Chim So
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3.1. E&P (cont.)

Malay-Tho Chu Basin

Ci Nc,
Sng c,

PM-3CAA
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3.1. E&P (cont.)

Fields in Preparation

Cuu Long Basin


1. Center & South Center of Rng,
2. S T Trng,
3. S T Nu,
4. Hi S Trng,
5. Hi S en,
6. Thng Long,
7. ng ,
8. Diamond
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3.1. E&P (cont.)

Fields in Preparation (cont.)

Nam Con Son Basin


1. Hi Thch
2. Mc Tinh
3. Lan
4. Da
5. Thin ng

6. Mng Cu
7. Gu Cha
8. Gu Nga
9. C Ch
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3.1. E&P (cont.)

Malay-Th Chu Basin


1. Hoa Mai
2. Field group of Rch Tu + Ph Tn + Khnh
M
3. Kim Long
4. c Qu
5. C Voi
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3.1. E&P (cont.)

Formations discovered
Sng Hng Basin
1. Yn T,
2. Bo Vng,
3. Bo en,
4. Bo Trng,
5. Bch Long,
6. Hng Long,
7. Hong Long,
8. Hc Long,
9. a Long,
10. C Voi Xanh
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3.1. E&P (cont.)

Formations discovered (cont.)

Phu Khanh Basin


Tuy Ha,

C Mp Trng
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3.1. E&P (cont.)

Formations discovered (cont.)


Cuu Long Basin
1. Emerald,
2. Jade,
3. Hi S Nu,
4. Hi S Bc,
5. Lc Nu,
6. Lc Vng,
7. H M Xm,
8. Di Nu,
9. Mo Trng,
10. Knh Ng Trng,
11. Th Trng
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3.1. E&P (cont.)

Formations discovered (cont.)

(b Nam

Nam Con Son Basin


1. C Rng ,
2. Thanh Long,
3. i Nguyt,
4. Rng V i,
5. Rng Tr,
6. Vng en,
7. Thin H,
8. Sng Tin
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3.1. E&P (cont.)

Formations discovered (cont.)


Malay Tho Chu Basin

Bc Kim Long

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3.1. E&P (cont.)

Overseas
Projects
11 Exploration
Projects

8 Production
Projects

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3.1. E&P (cont.)

Map of PVNs Overseas Project

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3.1. E&P (cont.)


PVNs Development Acceleration Strategy
to 2015 with vision to 2025

Reserve
Growth

Production

2011-2015: 38
44 MTOE/Year

2016-2025: 36
48 MTOE/Year

33 MTOE/Year (to 2015)


To 2020: 43 MTOE/Year
- Domestic: 31 MTOE;
- Overseas: 12 MTOE
To 2025: 43 MTOEYear
- Domestic: 27 MTOE
- Overseas: 16 MTOE

(Source: Ngh quyt 7862/NQ-DKVN ngy 1/9/2010 ca T DKVN)


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3.2. Oil Refinery and Petrochemical Industry

3.2.1. Oil Refinery


Plants in
Operation

Plant under
Construction

BSR
Capacity: 6.5 mt Crude
Oil/Year

NSR
Capacity: 10 mt
Crude Oil/Year

Cai Mep Condensate


Processing Plant
Capacity: 130,000 T/Y

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3.2. Oil Refinery and Petrochemical Industry

(Cont.)

Oil Refinery (cont.)

Projects in Plan
Upgrade and expansion of BSR to 9.5
mt/year to be completed in 2018-2020.

3rd Refinery in Long Son, BR-VT


Province; Capacity of 10,000 mt/year; to
be operational in 2020-2030.
Upgrade and expansion of Cai Mep
Condensate Plant to 500,000 Mt/year;
To be completed in 2015-2016
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3.2. Oil Refinery and Petrochemical Industry

(Cont.)

3.2.2. Petrochemical Industry


Plants in Operation
Dong Nai DOP Plant; Capacity: 30.000 mt/y;
Operational from 1997

Phu My Fertilizer Plant, Capacity: 800.000 mt/y;


Operational from 2004.
C Mau Fertilizer Plant; Capacity: 800.000 mt/y;
Operational from 2012.
Dinh Vu Polyester Fiber Plant, Capacity 170,000
mt/y; Operational from 2014
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3.2. Oil Refinery and Petrochemical Industry

(Cont.)

Petrochemical Industry (Cont.)

Plants under construction

Southern Petrochemical Complex in


Long Son, BR-VT Province;
Capacity: 2,5-3 mt raw material/y;
Operational from 2018.

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3.2. Oil Refinery and Petrochemical Industry

(Cont.)

3.2.3. Biofuels
Plant under
Construction

Plants in Operation
Ethanol Binh Phuoc; Capacity
100 million L/Year.
Operational from 2012.

Ethanol Phu Tho; Capacity


100 million L/Year.
Construction pending

Ethanol Quang Ngai .


Capacity: 100 million L/Year;
Operational from 2014

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3.3. Gas Processing Industry

Customers of PVNs Gas Industry


1. Gas Power Plants

2. Low pressure gas consuming Industry


3. Chemical and Fertilizer Industry

4. Transportation
5. Household Consumption
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3.3. Gas Processing Industry (Cont.)

3.3.1. Projects in Operation


Cuu Long Gas Pipeline;
Nam Con Son Pipeline
Phu My - Nhon Trach Hiep Phuoc
Pipeline
PM3 Ca Mau Pipeline
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3.3. Gas Processing Industry (Cont.)

Cuu Long Gas Pipeline:


-

Operational from 1995


Length: 116km
Capacity: 2.0 BCMA
Gathering and transporting gas from Bch H, Rng ng,
Phng ng, C Ng Vng, S t en/S t Vng/S t
trng, Rng, i Mi,
- System including:
+ Dinh C Gas Processing Plant
+ Low Pressure Pipeline Ph M - M Xun G Du
+ Phu My CNG Plant

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3.3. Gas Processing Industry (Cont.)

Nam Con Son Pipeline

Operational from 2003


Capacity: 7 BCMA
Length: 400Km (360 Km subsea)
Transporting gas from Blocks 06.1; 11.2
and 12W (Associate Gas)
Supplying gas to: Phu My Power Plant

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3.3. Gas Processing Industry (Cont.)

Phu My Nhon Trach Hiep Phuoc Pipeline

Operational from 2008


Capacity: 2 BCMA
Gathering and Transporting gas from
Nam Con Son Field
Supplying gas to Nhon Trach Power
Plants and the industry parks alongside
the pipeline

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3.3. Gas Processing Industry (Cont.)

PM3 Ca Mau Pipeline


Operational from 2007
Capacity: 2.2 BCMA
Transporting gas from PM3 and 46-Cai Nuoc
Fields to Ca Mau
Supplying gas to
Ca Mau Gas Electricity Urea complex

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3.3. Gas Processing Industry (Cont.)

3.3.2. Projects Under Construction


Block B O Mon Pipeline: Capacity: 6.4 BCMA;
To be completed in 2015; Supplying gas to Ca Mau Complex
and Power Plants in O Mon and Can Tho
Ca Mau gas processing Plant: To Process gas from Block
PM3 CAA; 46-CN and Block B; To be completed in 2015
Nam Con Son 2 Pipeline: Capacity: 18.4 Million CM
gas/day and 1.320 Ton Condensate/day; Transporting gas
from fields of Hi Thch - Mc Tinh Thin ng Mng Cu
and others from Nam Con son Basin

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3.4. Electricity

3.4.1. Power Plants in Operation


Plant

Capacity
(MW)

Operation
kick-off

1) C Mau 1 Gas Power Plant

750

3/2008

2) C Mau 2 Gas Power Plant

750

12/2008

3) Nhn Trch 1 Gas Power Plant

450

8/2009

4) Nhn Trch 2 Gas Power Plant

750

10/2011

5) Nm Ct Hydropower Plant

3.2

5/2012

6) Ph Qu Wind power Plant

8/2012

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3.4. Electricity (Cont.)

3.4.2. Plants under Construction


Plant

Capacity
(MW)

Vng ng 1 Thermo power


Thi Bnh 2 Thermo power
Long Ph 1 Thermo power
Sng Hu 1 Thermo power
QungTrch 1 Thermo
power
6. Ha Na Hydropower
7. akdring Hydropower
1.
2.
3.
4.
5.

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Petroleum Economics

Operation
Kick-off

1,200
1,200
1,200
1,200

Dec.2014
2015
2016
2018

1,200
180
125

2019
?
?
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PVN at Work 2014

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3.5. High quality Petroleum Service

Petroleum Service by PVN


Year

Share in
Domestic Market
(%)

Share in
Total turnover
(%)

2015

50-55

30-35

2020

55-60

35-40

2025

65-70

40-50

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4. SOE Restructuring & PVN

Why Restructuring

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4.1. SOE Restructuring (Cont.)

Reason 1: Development on hard potential ended


Periods
1991 - 1995

2006 - 2010

26,3

42

GDP Growth Rate (%) by


Investment

60

Rate of Development
Investment Debt (%) to GDP

25

135

Total Social Investment rate to


GDP (%)

(Source: MoF 2012)


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4.1. SOE Restructuring (Cont.)

Reason 2: Low Productivity

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4.1. SOE Restructuring (Cont.)

Reason 3: Low Competitiveness

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4.1. SOE Restructuring (Cont.)

Reason 4:
Inappropriate legal
Environment
eliminates Role of
State in Inspection
and Control of
SOEs

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4.1. SOE Restructuring (Cont.)

Reason 5:
Position and
capability of SOEs
in Relationship
with other
economic sectors
showed various
uneasy signs
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4.1. SOE Restructuring (Cont.)

Overall Reason:

Nhng yu km ni
ti ca nn kinh t vi
m hnh tng trng
v c cu kinh t lc
hu, km hiu qu,
tch t ko di t lu
(Pht biu ca Tng b th
Nguyn Ph Trng ti phin b
mc Hi ngh Trung ng 3
Kha XI)

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4.1. SOE Restructuring (Cont.)

Restructuring Options
1) public offering
2) internal restructuring

Incorporation/ M&E,
Spinning Off,
Introducing new investors,
Debt-equity swaps;

3) Bankruptcy & Reorganization


4) Employee shareholding
5) Auction

6) Leasing or Joint Venture


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4.2. PVN Restructuring

Foundation of PVN restructuring

Solution 3 of CPs Central


Committee of Term 11:
All SOEs focus on their
core businesses
Direction 03 CT-TTg
dated January 1, 2012 of
Prime Minister on
Acceleration of SOEs
Restructuring
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4.2. PVN Restructuring (cont.)

Objectives of PVN Restructuring


PVN to be the best SOE which is a principal
column of Vietnam State Economy

Sustainable Development and to be one of the


strongest economic corporations in the region
with annual development rate of 18-20%

Scope of activities and operation size are in line


with resources and the size of Vietnam economy

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4.2. PVN Restructuring (cont.)

One of many:

VPI

PVU
VPA

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Petroleum Economics Chapter 8

End of Chapter 8
Thanks for Attention !

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Petroleum Economics

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