Zarubezhneft Discovers Offshore Oil Deposit in Vietnam

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Jul. 19 – OAO Zarubezhneft, a Russian state oil producer, has discovered an offshore oil deposit in Vietnam, the company said in a statement earlier this week.

The deposit is located in the area where the company produces oil jointly with its Vietnamese partner PetroVietnam.

“The results of well testing allow us to talk about the discovery of another offshore field in Vietnam: the White Hare,” Zarubezhneft said in a statement.

A company spokeswoman said geologists had yet to report the reservoir’s production potential.

Oil flow during one of the tests was 214 cubic meters a day, said Zarubezhneft, whose main assets are outside Russia.

The finding came as production by the joint venture, VietSovPetro, had declined steadily in the area after it peaked at 13 million metric tons in 2002.

The remaining reserves of the block’s two older fields, White Tiger and Dragon, stood at 47 million tons in 2009, according to the latest data available.

As of 2009, Russia drew US$8.1 billion of income from the joint venture, which began production in 1986. The Vietnamese company is the majority partner with a 51 percent stake.

Zarubezhneft is now a big player in Vietnam’s off-shore oil fields. It operates – in a 50-50 joint partnership with PetroVietnam – the US$1.5 billion Vietsovpetro joint venture, or VSP, which accounts for the bulk of Vietnam’s oil exports. In 2002, Vietsovpetro pumped 13.5 million tons of crude, while Vietnam’s overall output reached some 17 million tons.

Zarubezhneft has other interests in offshore Vietnam. As part of another joint venture, with PetroVietnam and Japan’s Idemitsu, it launched production at the Southern Dragon-Sea Turtle field in January 2010, which held 56 million tons of oil at the time. Zarubezhneft holds half of that joint company, while PetroVietnam has 45 percent and Idemitsu owns 15 percent.

The company is a Russian state-controlled oil company based in Moscow that specializes in exploration, development and operation of oil and gas fields outside Russian territory.

The most successful project of the company is the Russian-Vietnamese joint venture Vietsovpetro founded in 1981 for the development of offshore Vietnam.

From the beginning of Vietsovpetro JVC’s operation, cumulative production exceeded 180 million tons of oil and the Russian treasury got US$8 billion from the joint venture activity, the company web site said. Vietsovpetro has remained the leader of oil production in Vietnam since the late 1980s.

In 2009, Zarubezhneft’s CEO Nikolai Brunich was awarded with Vietnam’s Labor Order (first class) in recognition of his contributions to the successful operation of Vietsovpetro and cooperation between two countries.

Recently, the company received a license for Block12/11 on the shelf of Vietnam. The bid was submitted in 2011.

During the next three years, the company plans to drill three wells and carry out 3D exploration of a 1,000 square kilometer territory. Block 12/11 is located on the South Vietnamese shelf, 200 kilometers south of the White Tiger and Dragon fields.

Apart from Vietnam, Zarubezhneft has interests in Syria, India, Turkmenistan, while it plans projects in Algeria, Libya and Yemen. Zarubezhneft also aims to service 100 oil wells in India.

The company also operates in Cuba, Bosnia and Herzegovina, Croatia, Jordan and in Uzbekistan. In Russia, it has activity in Northern Nenets Autonomous Okrug.