Monday, July 07, 2008

PetroVietnam to halt slump in output by starting new oil fields

Vietnam Oil & Gas Group, Southeast Asia’s third-biggest producer, plans to reverse a drop in crude oil production this year by advancing the start of operations at five fields.

The producer, known as PetroVietnam, expects “to boost this year’s output to as much as 16 million tons by bringing forward the schedule to start the five new oil fields,” Chairman Dinh La Thang told reporters in Hanoi on Saturday. The company’s output in 2007 dropped to 15.91 million metric tons from 17.3 million tons a year earlier.

Vietnamese oil production has fallen in each of the past three years as output from the biggest field slumped after more than two decades in operation. PetroVietnam has said it plans to boost domestic exploration and spend more money looking for overseas oil to meet a target of producing 20 million tons annually by 2010.

The five new fields, Su Tu Vang, Ca Ngu Vang, Phuong Dong, Song Doc and Bunga Orkid, may start production at a total of about 100,000 barrels a day later this year, Nguyen Quynh Lam, production manager, said at the conference today.

Ca Ngu Vang, or Golden Tuna, in which the U.K.-based Soco International Plc and Thailand’s PTT Exploration and Production Plc each have a 25 percent stake, will be the first to start on July 15, according to Lam.

Su Tu Vang, 24 percent owned by ConocoPhillips, will have the highest output of about 50,000 barrels a day once production starts in September, a month earlier than scheduled, Lam said.

PetroVietnam’s crude oil output from January to June totaled 7.2 million tons, according to a company statement today. Output fell 10 percent from 8 million tons a year earlier, Lam said.

“Output dropped due to the aging of our existing oil fields, including Bach Ho, which is more than two decades old,” said Chairman Thang.

The Hanoi-based company reported sales of 144 trillion dong ($8.6 billion), a 71 percent increase from a year earlier, according to the statement.

Sales rose after global oil prices increased, the company said. Crude oil gained 46 percent in the first half and yesterday rose to a record $145.85 per barrel.