Achievements
At 4:35 a.m. on November 21, 2001, the 100 millionth tonne of crude oil was pumped, marking a milestone in the 20-year development history of Vietsovpetro, the Vietnam-Russia oil and gas joint venture and the first and largest petroleum enterprise in Vietnam. The event was also a meaningful gift for Vietsovpetro's 20th anniversary.
One day earlier, work on building a gas pipeline from Rang Dong to Bach Ho oilfield was completed. The first flow of associated gas exploited by Vietnam-Japan Petroleum Company was carried from the central compression platform of Bach Ho to the Dinh Co Gas Processing Plant to supply power and liquefied petroleum gas plants to serve industrial and household uses.
In addition to 100 million tonnes of crude 15 years after the first tonne was pumped from Bach Ho oilfield in June 1986, Vietsovpetro has produced and transported nearly 7 billion cubic metres of associated gas ashore, equivalent to 7 million tonnes of oil, since 1995. Around 20% of the gas was propane and butane which are separated and liquefied at Dinh Co to supply industrial and household uses, and the rest is dry gas to run the generators of Ba Ria, Phu My 1 and Phu My 2-1 power plants.
Over the past 15 years, Vietsovpetro generated US$13 billion in sales and contributed US$7.1 billion to the national budget. During this period, its operations focused mainly on Bach Ho, Vietnam's largest oilfield. The joint venture has also pumped oil from Rong oilfield and has operated the Dai Hung oilfield since 1999.
Apart from production, it also develops petroleum technical services such as drilling, manufacturing and installing the foundation of oil rigs. Last year, Vietsovpetro's oil production reached 15.42 million tonnes, six times the volume of 1990. Production this year is estimated to be the same. Export revenue has also increased along with the rise in oil production, reaching US$2.7 billion last year. Besides oil revenue, gas production also brings large funds to the national budget. Last year, VND348 billion was contributed to the budget from gas.
Technology
Vietnam's oil and gas industry received strong support in technology and training from Russia during its infancy. However, production in the first two years was very low and experts did not think that Bach Ho had large reserves. During deep drilling into the granite layer in 1987, Vietsovpetro accidentally found a layer containing large oil reserves with an oil flow of over 1,000m3 per day at each well. The discovery was a breakthrough in Vietnam's oil exploration and production history, as all the oil found later was in the granite layer, where no foreign oil experts believed oil existed. Later re-appraisal of Bach Ho proved that it has the largest oil reserve in Southeast Asia with an annual production of 13 million tonnes. The discovery helped Vietsovpetro increase production from 280,000 tonnes in 1987 to 1 million tonnes in 1998.
Oil production aside, Vietsovpetro also trains workers and engineers for Vietnam's oil and gas industry through its oil and gas operations. Vietnamese have gradually been able to assume the posts held by Russian experts. Before 1990, Russian engineers and workers made up 80% of Vietsovpetro's personnel. To date, the joint venture has 1,600 engineers and technicians and 2,000 workers, half of them have certificates of qualifications awarded by international organizations. Vietnamese managers, engineers and workers now make up nearly 90% of its personnel and key positions are held by the Vietnamese.
Vietsovpetro has also developed facilities and infrastructure to serve its oil and gas operations and other foreign petroleum companies in Vietnam. Its petroleum port is currently the largest onshore petroleum base in Vietnam. Offshore, it has 12 fixed petroleum oil rigs, 10 light platforms, 2 central platforms, 4 oil storage terminals and 20 service vessels.
Future plans
In the near future, Vietsovpetro must find new technologies to increase the oil recovery rate at Bach Ho. The joint venture expects to exploit 54 million tonnes of crude oil in 2001-2005 with sales of US$6.5 billion. However, after this period, production at Bach Ho will quickly drop, so Vietsovpetro is trying to find new oil sources. It plans to drill some wells into the basement of Dai Hung to re-estimate its reserve. According to one official, the joint venture hopes to find larger reserves at Dai Hung, as it was successful with Bach Ho previously. The State has given it some more offshore blocks to explore new oilfields.
Besides oil production, Vietsovpetro also has a strong advantage in petroleum technical services. With good equipment and experienced personnel, it has won many contracts from foreign petroleum companies in Vietnam that cover test drilling, manufacturing and installing the foundations of offshore platforms, building oil and gas pipelines, and other works for offshore exploitation. Vietsovpetro recently began seeking service contracts abroad. It has cooperated with local and foreign companies to bid for contracts to manufacture platforms for oil production at the Lundin oilfield in the overlapping sea between Vietnam and Malaysia, and will hopefully win a contract.
