Member Country Report ofMember Country Report ofMember Country Report of Member Country Report of Vietnam for Oil and gas activitiesVietnam for Oil and gas activitiesgg

(2008 year)(2008 year)

October 2009

11

VIETNAM OIL GAS GROUPVIETNAM OIL GAS GROUP(PETROVIETNAM)(PETROVIETNAM)

Head office:

18, Lang Ha Str.,

Ba Dinh District

Hanoi, Vietnam

PhPhone:

84-4-825 2526

Fax:Fax:

84-4-826 5942

Web:

22

Web:

www.pvn.vn

PETROVIETNAM ACTIVITIESPETROVIETNAM ACTIVITIES•• Upstream (E&P)Upstream (E&P)•• Midstream (gas, power)Midstream (gas, power)Midstream (gas, power)Midstream (gas, power)•• Downstream (refinery, petrochemical)Downstream (refinery, petrochemical)•• Fiscal regimesFiscal regimes•• Investment campaignInvestment campaignp gp g

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UPSTREAM ACTIVITIESUPSTREAM ACTIVITIES(EXPLORATION & PRODUCTION)(EXPLORATION & PRODUCTION)(EXPLORATION & PRODUCTION)(EXPLORATION & PRODUCTION)

44

Vietnam Vietnam Domestic Domestic E&P mapE&P mappp

55

LOCATION MAP OF SEDIMENTARY BASINS IN VIETNAM

66

ExplorationExplorationExplorationExploration

•Until the end of 2008 PVN has signed 64 petroleum contracts•Until the end of 2008, PVN has signed 64 petroleum contracts with 41 still in forces ( in form of Petroleum Sharing Contracts, Business Co-operation Contracts, Joint Operation Contracts and

)Joint Venture).•~443,000 km 2D seismic (38,640 km in 2008) and ~49,000 km2

of 3D acquired (10,890 km2 in 2008).of 3D acquired (10,890 km in 2008).•54 well drilled in 2008 (13 exploration, 14 appraisal and 27 production).T t l h d b f Vi t i d 50 illi t•Total hydrocarbon reserves of Vietnam increased 50 million tons

of oil equivalent.•One licensing round (NCS bid) for 7 blocks: 03, 04-1, 04-2, 19, g ( ) , , , ,20, 21, 22-03 successfully opened by Petrovietnam and more than 20 international oil and gas companies participating in this licensing round

77

licensing round. • 04 new petroleum contracts were signed after that .

OPEN BLOCKS IN NAM CON SONOPEN BLOCKS IN NAM CON SONOPEN BLOCKS IN NAM CON SONOPEN BLOCKS IN NAM CON SON

88

FIELDS HAD PUT INTO PRODUCTION IN 2008FIELDS HAD PUT INTO PRODUCTION IN 2008

10

TRUNG QUỐC

105°E

110°E

LÀO

N

102

106

20°N

Tien Hai

HANOI BASIN

HÀ NỘI

101

-Su Tu Vang:-01 FSO (for Su Tu complex)-01 CPP-Su Tu Vang-Rang Dong pipeline:45km

103

107

108109

104

105

112

114 11

O

THÁI

Hainan Isl.

110

113

111

g g g-Phuong Dong:

-01 WHP-Phuong Dong-Rang Dong pipeline:17km

-Ca Ngu Vang:4 5

116

118-2

119-2

117

118-1119-1

VIỆT

120121

15°N

THÁI LAN

12

Block 15-1: SU TU VANG

-01 WHP-Ca Ngu Vang-Bach Ho pipeline:34km

-Song Doc:-01 WHP

CAM PU CHIA

TNAM

123124125

126127

12815

TP HO CHI MINH

001/9

2

Block 15-2: PHUONG ĐONG

Block 09-2: CA 60000

70000

-01 FPSO

8129

130131132133134 WAB-

21

04-2

03

04-1

04-315-

206 06-

1

15-2

15-115-

3 09-2

16-116-2

09-1

09-3

10

11-1

171819

20

12(W)

11-2

252627

313233

3738

4142434445

52/97

48/95 (B)

10°N

Rong

Bach Ho

Lan DoLan

Dai Hung05-

1A05-3

Joint Historic Wate

rs (1982)

010

202/97

7

46/02

Block 09 2: CA NGU VANG

Block 46/02: SONG DOC10000

20000

30000

40000

50000

Oil

rate

(bbl

/d)

99

135

1

07

08

12(E)

1314

21222324

29

28

30

343536

3940

Tay

0 100K

M

46-

Cai Nuoc

Block 46/02: SONG DOC, NAM CAN, NGOC HIỂN0

10000

Sư Tử Vàng Phương Đông Cá Ngừ Vàng Sông Đốc

Field

FIELDS TO BE PRODUCED IN 2009FIELDS TO BE PRODUCED IN 2009FIELDS TO BE PRODUCED IN 2009FIELDS TO BE PRODUCED IN 2009

105°E

110°E

NHÀ

•• Pearl:Pearl:–– 01 FPSO (shared with fields in 01 FPSO (shared with fields in

block 01&02)block 01&02)–– 01 WHP01 WHP

103

107

10

TRUNG QUỐC

E E

Laos

102

106

20°N

Tien Hai

HANOI BASIN

Hainan

HÀ NỘI

101

–– 01 WHP01 WHP•• NamRongNamRong--ĐoiMoi:ĐoiMoi:

–– 02 WHP02 WHP–– Pipeline to Rong fieldPipeline to Rong field

8109

104

105

112

114 11

5116

117

THÁI LAN

Isl.

110

113

111

6118-2

119-2

7118-1119-1

CAM PU

VIỆTN

120121

123

15°N

LAN

122

N Rồ Đồi CHIANAM

3124125

126127

128129

15-2

15-115-

3 09-16-10°N Bach

Joint Historic Water

TP HO CHI MINH

010

202/97

01/97

Block 01 & 02: PEARLNam Rồng-Đồi

Mồi

Pearl

4000

5000

6000

7000

bbl/d

)

130131132133134

135

WAB-21

04-2

03

04-1

04-315-

206 06-

1

3 09-2

16116-2

09-1

09-3

10

11-1

171819

20

12(W)

11-2

12(E)

21

252627

28

313233343

37383940

4142434445

52/97

48/95 (B)

NRong

Ho

Lan DoLan

Tay

Dai Hung05-

1A05-3

Historic Waters (1982)

2 7

46/02

46Cai

Block 09-3: NAM RONG-ĐOI MOI

1000

2000

3000

Oil

rate

(

1010

07

08

1314

222324

29

30

3536

0

0 100K

M

- Nuoc0

Field

ProductionProduction•• 9 oil and gas producing fields9 oil and gas producing fields•• Crude Oil: 15 MillionTon (~ 350.000 bbl/day)Crude Oil: 15 MillionTon (~ 350.000 bbl/day)•• Natural Gas: 7 5 Billion Cubic MetersNatural Gas: 7 5 Billion Cubic Meters•• Natural Gas: ~ 7.5 Billion Cubic MetersNatural Gas: ~ 7.5 Billion Cubic Meters

1111

1212

MIDSTREAM ACTIVITIESMIDSTREAM ACTIVITIES(GAS(GAS--POWER)POWER)(GAS(GAS--POWER)POWER)

1313

Gas Pipeline SystemsGas Pipeline SystemsGas Pipeline SystemsGas Pipeline Systems

Bach HoBach Ho

Nam Con SonNam Con SonSS

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South West South West GasGas

Gas Pipeline SystemsGas Pipeline Systems

Under operation:Under operation:

Gas Pipeline SystemsGas Pipeline Systems

pp•• Rang Dong Rang Dong –– Bach Ho Bach Ho –– Phu My Gas Pipeline Phu My Gas Pipeline

System (capacity: 2 billion m3/year).System (capacity: 2 billion m3/year).System (capacity: 2 billion m3/year).System (capacity: 2 billion m3/year).•• Nam Con Son Gas Pipeline (capacity: 7 billion Nam Con Son Gas Pipeline (capacity: 7 billion

m3/year)m3/year)m3/year).m3/year).•• PM3PM3--CAA Gas Pipeline (capacity: 2 billion CAA Gas Pipeline (capacity: 2 billion

m3/year)m3/year)m3/year).m3/year).In preparation stage:In preparation stage:•• Block B & 52B Block B & 52B –– O Mon Gas Pipeline O Mon Gas Pipeline

(capacity: 6 billion m3/year).(capacity: 6 billion m3/year).

1515•• NCS (Block 05.2, 05.3): second pipeline.NCS (Block 05.2, 05.3): second pipeline.

G Fi d P P j tG Fi d P P j t

•• B Ri P St ti 350 MW (EVN)B Ri P St ti 350 MW (EVN)

Gas Fired Power ProjectsGas Fired Power Projects

•• Ba Ria Power Station: 350 MW (EVN).Ba Ria Power Station: 350 MW (EVN).•• Phu My Power Plants: 3500 MW (EVN, BP).Phu My Power Plants: 3500 MW (EVN, BP).•• Ca Mau 1 Power Station: 750 MW (PVN).Ca Mau 1 Power Station: 750 MW (PVN).•• Ca Mau 2 Power Station: 750 MW (PVN).Ca Mau 2 Power Station: 750 MW (PVN).Ca Mau 2 Power Station: 750 MW (PVN).Ca Mau 2 Power Station: 750 MW (PVN).•• Nhon Trach 1 Power Station: 450 MW (PVN).Nhon Trach 1 Power Station: 450 MW (PVN).•• Nhon T ach 2 Po e Station 450 MW (JSC)Nhon T ach 2 Po e Station 450 MW (JSC)•• Nhon Trach 2 Power Station: 450 MW (JSC).Nhon Trach 2 Power Station: 450 MW (JSC).•• Hiep Phuoc Power Plant: 375 MW (BOT).Hiep Phuoc Power Plant: 375 MW (BOT).

Gas fired plants supply 40% total electricity of VietnamGas fired plants supply 40% total electricity of Vietnam

1616

p pp y yp pp y y

DOWNSTREAM ACTIVITIESDOWNSTREAM ACTIVITIESDOWNSTREAM ACTIVITIESDOWNSTREAM ACTIVITIES(REFINING/PETROCHEMICAL)(REFINING/PETROCHEMICAL)( / )( / )

1717

REFINERIES PROJECTSREFINERIES PROJECTSREFINERIES PROJECTSREFINERIES PROJECTS

•• Dung Quat Refinery (Ref. No.1), under active Dung Quat Refinery (Ref. No.1), under active implementation, estimated put into operation implementation, estimated put into operation in the end of 2009 (PVN 100%, EPC, in the end of 2009 (PVN 100%, EPC, Contractor: Technip).Contractor: Technip).p)p)

•• Nghi Son Refinery/Petrochemical Complex Nghi Son Refinery/Petrochemical Complex (Ref No 2): J/V signed 07 Apr 2008 (PVN(Ref No 2): J/V signed 07 Apr 2008 (PVN(Ref. No. 2): J/V signed 07 Apr 2008 (PVN, (Ref. No. 2): J/V signed 07 Apr 2008 (PVN, KPI, Idemitsu Kosan, Mitsui Chemical)KPI, Idemitsu Kosan, Mitsui Chemical)S th R fi (R f N 3) U d t dS th R fi (R f N 3) U d t d•• Southern Refinery (Ref. No. 3): Under study Southern Refinery (Ref. No. 3): Under study stage. (Joint venture will be selected)stage. (Joint venture will be selected)

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Refineries and Petrochemical Refineries and Petrochemical Projects LocationProjects Location

Refinery No. 2 Refinery No. 2

( 2010( 2010--2015)2015)

jj

(( ))

Refinery No. 1 Refinery No. 1

(2009)(2009)

Southern Southern Refinery/Chemical Refinery/Chemical

ComplexComplexComplexComplex

(2011(2011--2015)2015)

Phu My FertilizerPhu My Fertilizer

Cama Fertili erCama Fertili er

Phu My FertilizerPhu My Fertilizer

( 2004)( 2004)

Camau FertilizerCamau Fertilizer

( 2012)( 2012)

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PETROCHEMICAL PROJECTS PETROCHEMICAL PROJECTS Fertilizer PlantsFertilizer Plants

•• Phu My Fertilizer Plant :Phu My Fertilizer Plant :Phu My Fertilizer Plant Phu My Fertilizer Plant :Phu My Fertilizer Plant :--Capacity: 740.000 tons of Capacity: 740.000 tons of

Urea/year; (30% Domestic Urea/year; (30% Domestic Demand)Demand)

Phu My Fertilizer Plant

Demand).Demand).--Operation since September Operation since September

2004.2004.•• Camau Fertilizer Plant :Camau Fertilizer Plant :

--Capacity 800,000 tons of Capacity 800,000 tons of Urea/yearUrea/yearUrea/year.Urea/year.--EPC contract signed 06 May EPC contract signed 06 May 2008.2008.

•• Southern Petrochemical Complex Southern Petrochemical Complex (PVN, Vinachem,TPC, VSCG (PVN, Vinachem,TPC, VSCG Chem): J/V signed 13 March 2008Chem): J/V signed 13 March 2008

2020

Chem): J/V signed 13 March 2008 Chem): J/V signed 13 March 2008 (operation expected 2011).(operation expected 2011).

PETROVIETNAM BUSINESS HIGHLIGHTSPETROVIETNAM BUSINESS HIGHLIGHTSNoNo Norm of ItemNorm of Item UnitUnit 20072007 20082008

11 Crude oil productionCrude oil production Million TonMillion Ton 15.9115.91 151515.9115.91 151522 Gas productionGas production BCMBCM 6.866.86 7.57.533 Urea FertilizerUrea Fertilizer TonTon 767,000767,000 740,000740,00044 LPGLPG TonTon 308,000308,000 474,000474,00055 CondensateCondensate TonTon 80,00080,000 72,00072,00066 RevenueRevenue Billion VNDBillion VND 213,400213,400 280,050280,0506A6A -- Foreign CurrencyForeign Currency Billion USDBillion USD 8.88.8 11.1511.1566 VNDVND Billi VNDBilli VND6B6B -- VNDVND Billion VNDBillion VND 72,59772,597 95,97595,97577 Contribution to state Contribution to state

budgetbudgetBillion USDBillion USD ~5.4~5.4 ~7.250~7.250

2121

Fiscal regimesFiscal regimesFiscal regimesFiscal regimes

•• The Government of Vietnam and Petrovietnam are The Government of Vietnam and Petrovietnam are continuously improving the petroleum contract’s terms continuously improving the petroleum contract’s terms and incentive conditions to attract more investment.and incentive conditions to attract more investment.

•• Forms of Cooperation: PSC, JOC, BCC,JV…Forms of Cooperation: PSC, JOC, BCC,JV…Forms of Cooperation: PSC, JOC, BCC,JV…Forms of Cooperation: PSC, JOC, BCC,JV…•• PSC (Production Sharing Contract) selected as the PSC (Production Sharing Contract) selected as the

basic frame for petroleum contract basic frame for petroleum contract -- FlexibilityFlexibility-- FlexibilityFlexibility-- CompetitivenessCompetitiveness

•• JOC (Joint Operating Company) is an extended type ofJOC (Joint Operating Company) is an extended type ofa PSC, applied for most prospective blocks/areasa PSC, applied for most prospective blocks/areas

-- JOC will be the OperatorJOC will be the Operator-- All parties shall participate in operatorshipAll parties shall participate in operatorshipAll parties shall participate in operatorshipAll parties shall participate in operatorship

•• Forms of E&P project bidding : International Forms of E&P project bidding : International Competitive Bidding & Direct Negotiation.Competitive Bidding & Direct Negotiation.

2222

LEGAL FRAMEWORK FOR PETROLEUM ACTIVITIES IN VIETNAMLEGAL FRAMEWORK FOR PETROLEUM ACTIVITIES IN VIETNAM

•• Investment Law in Vietnam (2006).Investment Law in Vietnam (2006).•• PETROLEUM LAW (1993, amended 2000).PETROLEUM LAW (1993, amended 2000).•• Decree 48/2000/NDDecree 48/2000/ND--CP Guidance of Petroleum Law.CP Guidance of Petroleum Law.•• Decree 34/2001/NDDecree 34/2001/ND--CP Upstreams Project Biding Regulation.CP Upstreams Project Biding Regulation.•• Law on Corporate Income Tax.Law on Corporate Income Tax.•• Law on Valued Added Tax.Law on Valued Added Tax.Law on Valued Added Tax.Law on Valued Added Tax.•• Law on Import and Export Tax.Law on Import and Export Tax.•• Law on Environmental Protection.Law on Environmental Protection.•• Customs Formalities for Import and Export CommoditiesCustoms Formalities for Import and Export Commodities•• Customs Formalities for Import and Export Commodities.Customs Formalities for Import and Export Commodities.•• Regulations on Foreign Exchange Management.Regulations on Foreign Exchange Management.•• Law on Insurance.Law on Insurance.•• Labour LawLabour Law•• Labour Law.Labour Law.•• Other Laws and Regulations relating to InterOther Laws and Regulations relating to Inter--Government Government

Agreements on Tax.Agreements on Tax.

2323

Forms of E&P project biddingForms of E&P project biddingForms of E&P project biddingForms of E&P project biddingCompetitive Bidding:Competitive Bidding:p gp g

In compliance with PV exploration plan.In compliance with PV exploration plan.Time frame: Set by PetroVietnamTime frame: Set by PetroVietnam

Licensing Round:Licensing Round:Licensing Round:Licensing Round:•• Widely announcedWidely announced•• Usually for large area(s) covering many blocksUsually for large area(s) covering many blocks

Limited Bidding:Limited Bidding:•• Invitation sent to limited number of qualified Invitation sent to limited number of qualified

companiescompaniescompaniescompanies•• Usually for a single block/acreage.Usually for a single block/acreage.

Direct NegotiationDirect Negotiation::In special case, wIn special case, when open block is not yet included in competitive hen open block is not yet included in competitive bidding plan and there is only one company interested in.bidding plan and there is only one company interested in.Time frame: any timeTime frame: any time

2424

Open blocks

2525

THANK YOUTHANK YOUTHANK YOU THANK YOU FOR FOR

YOUR ATTENTIONYOUR ATTENTION

2626