rarely makes headlines for petroleum development.
ranks third in oil production among Association of South East Asian
Nations countries, trailing only Indonesia and Malaysia.
current rate of development continues, Vietnam will become the world's
30th largest oil-producing nation.
the most startling aspect about Vietnam -- most of its production
comes from offshore basement reservoirs.
Vietnam has produced almost a billion barrels of crude oil and 300
billion cubic feet of natural gas, according to Viet Anh Nguyen,
new ventures coordinator for national oil company PetroVietnam.
estimated 2004 total output at 130 million barrels of oil and 200
Bcf of gas.
estimated resources, both onshore and offshore, now stand at 6.5-8.5
billion barrels of oil and 75-100 trillion cubic feet of gas, he
oil and gas production comes from fields in the Cuu Long, Nam Con
Son and Malay-Tho Chu basins, with gas also produced in the Song
began 2005 in the middle of a licensing round for nine blocks in
the Phu Khanh Basin, offshore the south-central coast of Vietnam.
The offered blocks average 7,000 square kilometers in size.
in Phu Khanh range from 50 to 2,500 meters, and sediment thickness
extends up to 8,000 meters, the company said.
frontier exploration areas include parts of the Hoang Sa and Truong
Sa group of basins.
of challenging conditions, exploration in those areas may be limited
to small, prospective acreages of interest, Nguyen said.
of Cenozoic sedimentary basins defines the 1 million-square-kilometer
Vietnamese continental shelf area, according to descriptions from
basins lie within a transitional zone from the continental crust
of the Indochina Craton to the suboceanic crust of the eastern deepwater
the main structural elements occurred during a Late Eocene-Oligocene
rifting phase, with extension and transtensional deformation.
rotation and erosion began in the mid-Oligocene, followed by regional
subsidence. Compression dominated the area, later subject to diverse,
low- to moderate-amplitude tectonic activity.
Miocene lacustrine shales and deltaic coals and coaly claystones
constitute the main source rocks, showing potential for both oil
and gas generation.
-- delta plain, fluvial channel, submarine slope fan and turbidite
sandstones -- make up the most common reservoirs. However, exploration
has found fractured granite basement to be an important oil-bearing
now has an extensive history of working with foreign companies in
exploration and development ventures.
the company signed a contract with Idemitsu Kosan Co., Nippon Oil
Corp. and Teikoku Corp. for exploration on two blocks in the Nam
Con Son Basin.
to PetroVietnam, that was the 48th petroleum contract signed with
foreign companies since the Vietnam Foreign Investment Law took
effect in 1987.
in the Cuu Long Basin offshore southeastern Vietnam typify the country's
fractured basement reservoirs.
(White Tiger), Vietnam's largest oilfield, produces almost 280,000
barrels of oil per day from granitoid basement.
a basement-reservoir play extension in the nearby Su Tu or "lion"
fields generated wide industry interest.
Tu Den (Black Lion) field currently produces about 80,000 barrels
per day, but PetroVietnam expects to increase output to 200,000
barrels per day within three years.
PetroVietnam announced that up to $300 million dollars will be spent
on production enhancement in Cuu Long Block 15-1, where Su Tu Den
fields Su Tu Vang (Golden Lion) and Su Tu Trang (White Lion) also
show promise for production increases, it said.
G. Dow, an AAPG member and consultant in The Woodlands, Texas, calls
the Cuu Long oil "paraffinic, classic lacustrine crude" expelled
into fractured basement from lower source rock.
in the basement are virtually identical to the oils in the sandstone
sitting around the basement," Dow said.
the key -- they migrate updip through faults into the basement,
in horst blocks," he said.
that the oil's components indicate a lacustrine organic facies with
lipid-rich, land-plant debris and fresh-water algal material, refuting
theories of abiogenic origin in this area.
on basement highs in Cuu Long can encounter thousands of feet of
open up a 1,000-foot section, you don't need more than 2 or 3 percent
porosity. The oil migrated recently, so it's still all there. You
can produce a lot of oil," Dow said.
challenge is predicting where to drill, according to Dow, and "a
lot of companies have lost their shirts trying to drill these darn
problem is, how do you do these plays?" he asked. "Some companies
want to believe there are plays away from these horst blocks. I'm
sure there are, but are they economic?"
venture, Cuu Long Joint Operating Co., conducts oil and gas development
on Cuu Long Block 15-1, including the Su Tu fields.
PetroVietnam, 50 percent.
National Oil Corp., 14.25 percent.
Korean oil refiner SK Corp., 9 percent.
company Geopetrol, 3.5 percent.
in Vietnam is "like operating just about anywhere else," said Georg
Storaker, ConocoPhillips country manager of Vietnam in Ho Chi Minh
said the venture's general manager is seconded in from PetroVietnam
and the deputy general manager from ConocoPhillips, with other companies
partners make operating decisions jointly, under voting rights specified
in the working contract.
It's functional to do it this way," Storaker observed. "But it tends
to become very bureaucratic to operate in this fashion."
Vietnam may return to the partner-operated approach used in earlier
government-sponsored ventures, providing more direct operator control.
no refining capacity of its own, Vietnam exports all of its crude
production and imports processed fuels and petrochemical products.
markets are out of the country," Storaker said. "All gas production
is going into domestic markets, primarily for power generation."
petroleum infrastructure in place, development can be a build-as-you-go
effort. Much of the support manufacturing takes place in Vietnam,
according to Storaker.
wellhead structures, the jackets and topsides, we build here in
Vung Tau, the harbor city just outside of Ho Chi Minh City," he
Long venture had no problem identifying prospects on Block 15-1,
said Bill Schmidt, ConocoPhillips general manager for Vietnam.
well that was drilled was a successful discovery," Schmidt said.
"It was targeting the basement. The block was picked up based upon
the success of the Bach Ho field."
reservoirs at Bach Ho and the Block 15-2 Rang Dong field, where
ConocoPhillips has a 36 percent interest, indicated the play concept
could be extended.
reason, there was a lot of interest in what was considered this
'golden block,' Block 15-1. Basically, it came in as expected in
Su Tu Den and Su Tu Vang," Schmidt said.
the two nicest structures on the block," he added.
ongoing development plan is typical of local operating style: Find
a horse, or horst, and ride it.
15-1 is the one that has the longest life, that we're tying most
of our future on," Storaker said. "The Rang Dong field that got
us started has a life expectancy of 2017.
now moving into the preliminary engineering phase of Su Tu Vang,"
he continued, "and if everything goes the way we hope, we would
like to sanction it in 2005 for first production in 2007."
discovery, Su Tu Trang, is in evaluation. It initially tested at
70 million cubic feet of gas and 8,500 barrels of condensate production
per day, Storaker said.
been shooting a lot of seismic work on that structure in the past
year," he added, and an appraisal well is slated for 2005.
also likely to go out and drill an exploratory well on another prospect
we see out on the block," Storaker said.
Dong, where water injection began in 2004, ConocoPhillips plans
to add one production platform and one new liquids handling platform
also holds an equity interest in the 242-mile Nam Con Son pipeline
system, linking gas supplies from the offshore basin to gas markets
in southern Vietnam.
period 2005-10, PetroVietnam plans to triple gas production and
add 7-to-10 new oil and gas fields, Nguyen said.
also will focus on infrastructure construction to develop its domestic
natural gas market and reduce dependence on imported oil products.
series of false starts and delays, including the loss of a Russian
venture partner, PetroVietnam now plans to begin operating a $1.6
billion, in-country refining complex at Dung Quat by 2007.
continues to develop rapidly, Storaker said, promising a stronger
domestic market for transportation fuels and power-generation gas
in the future.
quite fast -- there is a growth rate of about 7 percent a year,"
he said. "There's a focused effort here on getting more high-tech
industry into this area.
tons of things to be done to, for example, catch up with the speed
of the neighbor to the north," he added.
exploration success in Vietnam presents the industry with an increasingly
attractive place to work, to operate and to chase offshore plays.
are in motion down here," Storaker said.