VIETGAZPROM - Red River Basin Block 112 & 113 Gas Exploration

Background

Vietgazprom Joint Operating Company (JOC), a 50-50 joint venture between PetroVietnam and Gazprom, was awarded the contract from the Vietnamese authorities to explore, produce and market gas in Blocks 112 and 113 in the Red River Basin off Vietnam.

Project

StatusVietgazprom Joint Operating Company (JOC), a 50-50 joint venture between PetroVietnam and Gazprom, was awarded the contract from the Vietnamese authorities in the second half of 2000 to explore, produce and market gas in Blocks 112 and 113 in the Red River Basin off Vietnam. The blocks, which cover an area of 11,158 square kilometres (sq km), will be operated by Vietgazprom – a 50-50 partnership between PetroVietnam Exploration Production Corporation (PVEP) and Russia’s Gazprom Zarubezhneftegaz.

On 30 August 2007, Gazprom said commercial gas flow of 400,000 cubic metres per day were discovered with gas condensate found in the well stream when Vietgazprom drilled its first exploratory well in Bao Wang in Block 112 in the Gulf of Bac Bo. A scheduled gas dynamic study is underway on the inflow characteristics. The operator will conduct an operational hydrocarbon appraisal and proposals for the future exploration activities are due in the near future.

Northern Offshore Ltd's Singapore-based subsidiary, Jet Holding Ltd. was awarded a contract by Vietgazprom in mid-October 2008 for the drillship Energy Searcher. The five-well contract, lasting for a year including a mobilization period, is expected to begin between June and September 2009. The estimated contract value is approximately US$122 million, comprising US$116 million during the drilling period and US$6 million in mobilization and demobilization fees.

On 20 October 2008, PV Drilling signed a contract with Vietgazprom to supply PV Drilling I jack-up rig. Under the contract, PV DRILLING I rig will be mobilized to Block 112 to perform exploration drilling for Vietgazprom after the completion of contract with Hoang Long/Hoan Vu JOC in April 2009.

Northern Offshore has indicated on 28 May 2009 that the Energy Searcher drillship has departed the Vietnamese port of Da Nang following governmental clearance. It has now arrived on location to start its drilling contract with Vietgazprom.(Topco)