Chapter8_Oil and Gas Industry in VN-To Students (1)

8/10/2019 Chapter8_Oil and Gas Industry in VN-To Students (1)

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PETROVIETNAM UNIVERSITY

Instructor: Hoang Hung, Ph.D.Email: [email protected]: 091 873 8 873

PETROLEUM ECONOMICS

Chapter 8

O&G Industry in Vietnam


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Petroleum EconomicsHoang Hung, PhD

1. Development History of O&G Industry in VN

3

1959

President Ho Chi Minh spoke of Vietnamsfuture Petroleum Industry when visited SU

1961

First Summary Report on VN geology and

Petroleum potentials compiled by SU andVietnamese experts*

27/11/1961 Geology Mission No. 36 was establishedunder General Department of Geology


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1. Development History (Cont.)

4

9/10/1969,

Geology Federation No. 36 (Lin on acht 36) established

3/9/1975 Vietnam General Department of Oil andGas established

25/7/1976

First Gas at Well 61 inng Ccommune, Tin Hidistrict, Thi BnhProvince


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5

19/06/1981 Vietsovpetro JV established

6/11/1984

First Fixed Platform (MSP-1) erected in Bch H(White Tiger) Field

26/6/1986 First ton of oil produced by MSP-1

6/1990

Vietnam Oil & Gas CorporationPetrovietnam(Tng Cng ty Du kh Vit Nam) established


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6

1993 Law on Petroleum promulgated

1993

Construction of associate gas gathering system

from Bach Ho Field to B Ra - Vng TuGasPower Plan and later, to Phu My Fertilizer Plan.

2001 PVN reached 100 m tons of crude oil for export


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7

28/11/2005

BSR, Construction of Vietnams

First Refinery kicked off in DungQuat with investment capital ofnearly $3 bln

8/2006

VIETNAM OIL AND GAS GROUP(PVN) was established and

operated as a Holding Company




8

Organization Chart of PVN

Council of Members

Board of DirectorsInspection Committee

Office

Dept. of Staff and Organization

Dept. of F&A and Audit

Dept. of Planning

Dept. of Construction

Dept. of Exploration

Dept. of Production

Dept. of Bidding Management

Dept. of P. Contracts Management

Dept. of Overseas Project Mgmt

Dept. of Legal Enforcement

Dept. of Foreign Relations

Dept. of Science & Engineering

Dept. of O&G Processing

Dept. of Training and HR Dev.

Dept. of Investment & Development

Dept. of Inspection

Dept. of Commerce and Market

Dept. of HSE

Dept. of Gas

Dept. of Electricity

Representative Office in HCMC

Representative Office in A. Continent

Representative Office in Russia & SNG




9

PVN

Parent Company

(Holding Company)

Subsidiaries

Collaboration Companies

Research and trainingInstitutions



Subsidiaries Under Direct Management of the PC

10

01. Ban QLDA Cm Kh in m C Mau

02. Ban QLDA Nh my Lc du Dung Qut (DQR)03. Ban QLDA Cng trnh Lin hp LHD Nghi Sn (NSPM)04. Ban QLDA Xy dng Trng HDKVN05. Ban QLDA in lc DK Long Ph-Sng Hu (LHPP)

06. Ban QLDA in lc DK Vng ng-Qung Trch (VQPP)07. Ban QLDA in lc DK Thi Bnh 2 (TB2PP)08. Ban QLDA ng mi gin khoan t nng 60M nc09. Trung tm ng cu s c trn du pha Nam (NASOS)

10. Chi nhnh T -Cng ty iu hnh DK Bin ng(BDPOC)

11. Chi nhnh T-Cty NK & PPhi Than DK (PVCoal)



Subsidiaries Under 100% financial control ofPVN

11

PETROVIETNAMPVEP

BSR

PVCFC



Subsidiaries where PVN dominates shares

12

PVN1. PV Oil

2. PV Power

3. PV Drilling

4. PTSC

5. PV Trans

6. PVFC

7. PVI

8. Petrosetco

S bsidiaries here PVN dominates shares



Subsidiaries where PVN dominates shares(cont.)

13

PVN

9. PVC

10. PVFCCo

11. DMC12. PVTex

13. PVEIC14. PVE

15. PVGas



Collaboration Companies

14

PVN

1. Vietsovpetro (VSP)

2. Rusvietpetro

3. Nghi Sn (NSRP)

4. Ocean Bank

5. ng Dng XanhDevelopment Company


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2 Vi P l P i l



2. Vietnam Petroleum Potential

16



2. Vietnam Petroleum Potential (cont.)

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Discovered Petroleum Reserves (mcm equivalent)

Basin

TotalDiscovery

Reserve Recovery Reserve Recovery Reserve Recovery Reserve Recovery

Tobe taken

into Production

To be takeninto

Production if

Produc-tion

Pending

Total

(Source: PVN)




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Reserve VS Recovery Reserve Recovery

MCME

To be taken intoProduction

To be taken intoProduction If

ProductionPending




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Distribution of Petroleum Potential in Vietnam

. Potential .Discovered

MCME



3. Petroleum Activities in Vietnam

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3.1. E&P

3.2. Oil Refinery

3.3. Gas Processing Industry

3.4. Gas Electricity Industry

3.5. High quality O&G Service


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3.1. E&P

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So far, 90contracts signed

between PVNand variousinternational

partners

Of which:60 ongoingcontracts

Among 60

ongoingcontracts: 47 PSC; 10 JOC 1 BCC


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3.1. E&P (cont.)

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Effective Contracts on Basin

Sng Hng 12

Ph Khnh: 5

T Chnh Vng My: 3

Nam Cn Sn: 18

CuLong: 14

Ma Lai - Th Chu: 8


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3.1. E&P (cont.)

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Cuu Long Basin1. BchH,

2. Rng,

3. Nam Rng i Mi,

4. Rngng,5. Phng ng,

6. Ruby,

7. Topaz,

8. Pearl,9. S T en,10. Te Giac Trang11. S T Vng,

12. C Ng Vng,

Fields in production (cont.)


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3.1. E&P (cont.)

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Nam Con Son Basin

iHng,

Lan Ty,

Rngi

Rng iTy

Chim So

3 & ( )


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3.1. E&P (cont.)

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Malay-Tho Chu Basin

Ci Nc,

Sng c,

PM-3CAA

3 1 E&P ( )


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3.1. E&P (cont.)

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Fields in Preparation

Cuu Long Basin1. Center & South Center of Rng,

2. S T Trng,

3. S T Nu,4. Hi S Trng,

5. Hi S en,

6. Thng Long,7.ng,

8. Diamond

3 1 E&P ( t )


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3.1. E&P (cont.)

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Fields in Preparation (cont.)

Nam Con Son Basin1. HiThch

2. McTinh

3. Lan4. Da

5. Thin ng

6. Mng Cu

7. GuCha

8. GuNga

9. C Ch

3 1 E&P ( t )


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3.1. E&P (cont.)

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Malay-ThChu Basin

1. Hoa Mai

2. Field group of RchTu + Ph Tn + KhnhM

3. Kim Long

4. c Qu

5. C Voi

3 1 E&P ( t )


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3.1. E&P (cont.)

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Formations discovered

Sng HngBasin1. Yn T,

2. Bo Vng,

3. Boen,4. Bo Trng,

5. BchLong,

6. HngLong,

7. Hong Long,8. HcLong,

9.aLong,

10. C Voi Xanh

3 1 E&P ( t )


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3.1. E&P (cont.)

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Formations discovered (cont.)

Phu Khanh Basin

Tuy Ha,

C Mp Trng

3 1 E&P ( t )


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3.1. E&P (cont.)

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Cuu Long Basin1. Emerald,2. Jade,

3. Hi S Nu,4. Hi S Bc,5. Lc Nu,6. Lc Vng,7. H M Xm,

8. Di Nu,9. Mo Trng,10. Knh Ng Trng,11. ThTrng

3 1 E&P (cont )


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3.1. E&P (cont.)

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(b Nam


Nam Con Son Basin1. C Rng,

2. Thanh Long,

3.iNguyt,

4. RngV i,

5. RngTr,

6. Vngen,

7. Thin H,

8. Sng Tin

3 1 E&P (cont )


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3.1. E&P (cont.)

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MalayTho Chu Basin

BcKim Long

3 1 E&P (cont )


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3.1. E&P (cont.)

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OverseasProjects

11 Exploration

Projects

8 ProductionProjects

3 1 E&P (cont )


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3.1. E&P (cont.)

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Map of PVNs Overseas Project

3 1 E&P (cont )


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3.1. E&P (cont.)

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PVNs Development Acceleration Strategyto 2015 with vision to 2025

(Source: Nghquyt7862/NQ-DKVN ngy 1/9/2010 ca T DKVN)

ReserveGrowth

2011-2015: 38

44 MTOE/Year

2016-2025: 3648 MTOE/Year

Production

33 MTOE/Year (to 2015)

To 2020: 43 MTOE/Year

- Domestic: 31 MTOE;

- Overseas: 12 MTOETo 2025: 43 MTOEYear

- Domestic: 27 MTOE

- Overseas: 16 MTOE

3 2 Oil Refinery and Petrochemical Industry


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3.2. Oil Refinery and Petrochemical Industry

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Plants inOperation

BSRCapacity: 6.5 mt CrudeOil/Year

Cai Mep CondensateProcessing Plant

Capacity: 130,000 T/Y

Plant underConstruction

NSR

Capacity: 10 mtCrude Oil/Year

3.2.1. Oil Refinery

3 2 Oil Refinery and Petrochemical Industry (Cont )


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3.2. Oil Refinery and Petrochemical Industry (Cont.)

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Projects in Plan

Upgrade and expansion of BSR to 9.5

mt/year to be completed in 2018-2020.

3rdRefinery in Long Son, BR-VTProvince; Capacity of 10,000 mt/year; to

be operational in 2020-2030.Upgrade and expansion of Cai MepCondensate Plant to 500,000 Mt/year;To be completed in 2015-2016

Oil Refinery (cont.)



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3.2.2. Petrochemical Industry

Plants in Operation

Dong Nai DOP Plant; Capacity: 30.000 mt/y;Operational from 1997

Phu My Fertilizer Plant, Capacity: 800.000 mt/y;Operational from 2004.

C Mau Fertilizer Plant; Capacity: 800.000 mt/y;

Operational from 2012.Dinh Vu Polyester Fiber Plant, Capacity 170,000mt/y; Operational from 2014



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41

Plants under construction

Southern Petrochemical Complex inLong Son, BR-VT Province;

Capacity: 2,5-3 mt raw material/y;Operational from 2018.

Petrochemical Industry (Cont.)



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3.2.3. Biofuels

Plants in Operation

Ethanol Binh Phuoc; Capacity100 million L/Year.Operational from 2012.

Ethanol Quang Ngai .Capacity: 100 million L/Year;Operational from 2014

Plant underConstruction

Ethanol Phu Tho; Capacity100 million L/Year.Construction pending

3 3 Gas Processing Industry


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3.3. Gas Processing Industry

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Customers of PVNs Gas Industry

1. Gas Power Plants

2. Low pressure gas consuming Industry

3. Chemical and Fertilizer Industry

4. Transportation

5. Household Consumption

3 3 Gas Processing Industry (Cont )


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3.3. Gas Processing Industry (Cont.)

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3.3.1. Projects in Operation

Cuu Long Gas Pipeline;

Nam Con Son Pipeline

Phu My - Nhon TrachHiep PhuocPipeline

PM3Ca Mau Pipeline

3 3 Gas Processing Industry (Cont )


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Cuu Long Gas Pipeline:- Operational from 1995- Length: 116km- Capacity: 2.0 BCMA- Gathering and transporting gas from Bch H, Rng ng,

Phng ng, C Ng Vng, S t en/S t Vng/S ttrng, Rng, i Mi,

- System including:

+ Dinh CGas Processing Plant+ Low Pressure Pipeline Ph M - M Xun G Du+ Phu My CNG Plant



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Nam Con Son Pipeline

Operational from 2003 Capacity: 7 BCMA

Length: 400Km (360 Km subsea) Transporting gas from Blocks 06.1; 11.2

and 12W (Associate Gas)

Supplying gas to: Phu My Power Plant



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Phu MyNhon TrachHiep Phuoc Pipeline

Operational from 2008 Capacity: 2 BCMA

Gathering and Transporting gas fromNam Con Son Field

Supplying gas to Nhon Trach Power

Plants and the industry parks alongsidethe pipeline



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PM3Ca Mau Pipeline

Operational from 2007 Capacity: 2.2 BCMA Transporting gas from PM3 and 46-Cai Nuoc

Fields to Ca Mau Supplying gas to

Ca Mau GasElectricityUrea complex



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3.3.2. Projects Under Construction

Block BO Mon Pipeline: Capacity: 6.4 BCMA;To be completed in 2015; Supplying gas to Ca Mau Complexand Power Plants in O Mon and Can Tho

Ca Mau gas processing Plant: To Process gas from BlockPM3 CAA; 46-CN and Block B; To be completed in 2015

Nam Con Son 2 Pipeline: Capacity: 18.4 Million CM

gas/day and 1.320 Ton Condensate/day; Transporting gasfrom fields of Hi Thch - Mc Tinh Thin ng Mng Cuand others from Nam Con son Basin

3.4. Electricity


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3.4. Electricity

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3.4.1. Power Plants in Operation

Plant Capacity(MW)

Operationkick-off

1) C Mau 1 Gas Power Plant 750 3/2008

2) C Mau 2 Gas Power Plant 750

12/2008

3)NhnTrch1 Gas Power Plant 450 8/2009

4)NhnTrch2 Gas Power Plant 750

10/2011

5)NmCtHydropower Plant 3.2 5/2012

6) Ph Qu Wind power Plant 6 8/2012

3.4. Electricity (Cont.)


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3.4. Electricity (Cont.)

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3.4.2. Plants under Construction

Plant Capacity

(MW)

Operation

Kick-off

1. Vng ng 1Thermo power

2. Thi Bnh 2 Thermo power3. Long Ph 1 Thermo power4. Sng Hu 1Thermo power5. QungTrch 1Thermo

power6. Ha NaHydropower7. akdringHydropower

1,200

1,2001,2001,200

1,200180125

Dec.2014

201520162018

2019??

PVN at Work 2014


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PVN at Work 2014

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3.5. High quality Petroleum Service


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g q y

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YearShare in

Domestic Market

(%)

Share inTotal turnover

(%)

2015 50-55 30-35

2020 55-60 35-40

2025 65-70 40-50

Petroleum Service by PVN

4. SOE Restructuring & PVN


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Why Restructuring

4.1. SOE Restructuring (Cont.)


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g ( )

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Reason 1: Development on hard potential ended

Periods

1991 - 1995 2006 - 2010

Total Social Investment rate toGDP (%) 26,3 42

GDP Growth Rate (%) byInvestment 5 60

Rate of DevelopmentInvestment Debt (%) to GDP 25 135

(Source: MoF 2012)


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g ( )

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Reason 3: Low Competitiveness



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Reason 4:Inappropriate legalEnvironment

eliminates Role ofState in Inspectionand Control of

SOEs



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Reason 5:Position andcapability of SOEs

in Relationshipwith othereconomic sectors

showed variousuneasy signs



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Petroleum EconomicsHoang Hung, PhD 60

Overall Reason:

Nhng yu km niti ca nn kinh t vim hnh tng trng

v c cu kinh t lchu, km hiu qu,tch t ko di t lu(Pht biu ca Tng b th

NguynPh Trng ti phin bmc Hi ngh Trung ng 3Kha XI)



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Restructuring Options

1) public offering

2) internal restructuring Incorporation/ M&E, Spinning Off,

Introducing new investors, Debt-equity swaps;

3) Bankruptcy & Reorganization

4) Employee shareholding

5) Auction

6) Leasing or Joint Venture

4.2. PVN Restructuring


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Foundation of PVN restructuring

Solution 3 of CPs CentralCommittee of Term 11:

All SOEs focus on their

core businesses

Direction 03 CT-TTg

dated January 1, 2012 ofPrime Minister onAcceleration of SOEsRestructuring

4.2. PVN Restructuring (cont.)


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Objectives of PVN Restructuring

PVN to be the best SOE which is a principalcolumn of Vietnam State Economy

Sustainable Development and to be one of thestrongest economic corporations in the regionwith annual development rate of 18-20%

Scope of activities and operation size are in linewith resources and the size of Vietnam economy


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Petroleum EconomicsChapter 8


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End of Chapter 8

Thanks for Attention !

Chapter8_Oil and Gas Industry in VN-To Students (1)

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