Opportunities for Development of Natural Gas in Vietnam

VIETNAM OIL AND GAS CORPORATION

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

Presented by Nguyen Dang Lieu Vice President PetroVietnam

Qatar – 2006 OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

ContentContent

VietnamVietnam –– CountryCountry OverviewOverview ExplorationExploration ActivitiesActivities GasGas IndustryIndustry inin VietnamVietnam ContactsContacts VietnamVietnam –– GeneralGeneral InformationInformation

Official Name Socialist Republic of Vietnam Capital Hanoi Area 329,560 sq. km Climate Tropical Monsoon Population 82 million (2004) Currency Dong (VND); 1USD~16,000 VND Official Languages Vietnamese GDP Growth Rate 8.4% (2005) Major Export crude oil, rice, marine products, Products garments, coffee, coal, rubber, nuts Major Import petroleum products, tractors, Products tires, steel products, foodstuff, cotton OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM EXPLORATION ACTIVITIES

¾ Foreign investments: - 50 petroleum contracts (PSC, JOC, BCC) - 27 contracts still valid - More than 7 billion USD investment

8 ng ̀ ô

đ 6 p ̣ hô

́ 4 Sô 2

0 1988 1990 1992 1994 1996 1998 2000 2002 2004 Năm

Number of signed contracts/year Valid contracts OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM EXPLORATION ACTIVITIES

¾Exploration activities started in the early 1960s. ¾From 1988-2004: • Seismic: - 2D - more than 300,000 Km -3D ~ 40,000 Km2 • More than 600 exploratory and production wells drilled OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM EXPLORATION ACTIVITIES

• 8 high potential hydrocarbon basins defined : Song Hong, Phu Khanh, Cuu Long, Nam Con Son, Tu Chinh-Vung May, Malay-Tho Chu and Truong Sa- Hoang Sa Basins. • Major exploration targets - Fractured basement plays - Oligocene-Miocene clastic plays - Miocene carbonate plays OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM EXPLORATION ACTIVITIES Total resources in Vietnam Tertiary basins up to 12/2005

• Total potentials: 20,400 MMbbls OE • More than 70 discoveries found • Total oil and gas reserves: 5,700 MMbbls OE 0.1/4700

4700 5950

0/3150 2.8/1150 4.7/4100 5.5/950 950 3150

4100 1550 0/5950 Song hong Phukhanh Cuulong Namconson Malay-Thochu Tuchinh-Vung May Gas reserves (TCF) / Potential (MMbbls) OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM EXPLORATION ACTIVITIES Total resources in Vietnam Tertiary basins up to 12/2005

• Total potentials: 20,400 MMbbls OE • More than 70 discoveries found • Total oil and gas reserves: 5,700 MMbbls OE 0.1/4700 • Gas reserves: more than 13TCF

GIIP Gas Reserve Basin 0/3150 TCF % TCF % 2.8/1150 Song Hong 12.7 32.2% 0.1 0.7% 4.7/4100 5.5/950 Cuu long 8.3 20.9% 2.8 21.7% Nam Con Son 9.6 24.3% 4.7 35.7% 0/5950 Malay-Tho chu 8.9 22.6% 5.5 41.8%

Gas reserves (TCF) / Potential (MMbbls) Total 39.4 100.0% 13.1 100.0% OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM Gas Industry: Production Highlights

• Gas produced from fields: Bach Ho, Rong, Rang Dong (Cuulong), Lan Tay (Nam Con Son), Bunga Kekwa - Cai Nuoc, Bunga Raya and Bunga Seroja (Malay) • Current average gas production rate: 630 MMSCFD (17.8 MMSCMD) • To the year 2010, the gas production of 650-1000 MMSCFD will be maintained 400 Oil and gas production 1989-20 04 and prediction to 2010 350 0 0 37 35 300 340 320 Gas BCF 0 300 250 28 Oil MMbbls 270

8 200 21

56 150 1 2 7 12 0 12 118 121 0 11 110 10 5 102 100 89 9 Oi l (mmbbl s)/ Gas (BCF) 81 74 7 75 6 6 54 5 .5 0 45 .5 0 4 6 50 28 3 31 3 20 25 24 10 15 18 4 8.5 2 3 2 2 4 0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Year

Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 Production (BCF) 40 74 100 110 122 156 218 270 280 OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM Gas Industry: Objectives

¾ Increase gas production output from 280 BCF in the year 2005 to 400-:-450 BCF in 2010, 500-650 BCF in 2020. ¾ Invest in 03 gas-used industrial regions: Southeast region capacity 200-300 BCF /y Southwest region capacity 150-250 BCF /y SongHong delta – Thaibinh capacity 35-70 BCF /y ¾ Put into operation of interconnection and regional/national gas pipeline systems. ¾ Develop of gas fields in Southern of SongHong basin which is highly CO2 content. OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM Gas Industry: Gas-based industry areas

Songhong complex

Nghison complex

Dungquat Future gas complex complex Available gas complex

Phumy Binh Thuan Omon complex complex complex

Camau complex OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM Gas Industry: Pipelines

• Rang Dong – White Tiger –Phu My Associated gas (off-shore 107km,Ø16”) with Capacity of 2 BCM/year (operation 1995). • Nam Con Son Natural gas (off-shore 362km Ø 26”& on-shore38km Ø 30”) with Capacity of 7.5 BCM/year (operation 2003). • Low-pressure gas supply network of Phu My- Thu Duc (phase 1 operation 2003).

Hon dat omon PHU My

105+5 km

PETRO 50-60 km OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM Gas Industry: Pipelines

• PM-3 (CAA) – Camau (off-shore 332km, Ø18”), Capacity 2 BCM/year, Operation 2006. • Unocal Blocks-Omon (off-shore 270km, on-shore 130 km, Ø24”), Capacity of 6 BCM/year, Operation 2008. • Phu My – Ho Chi Minh City (on-shore 71km, Ø22”) Capacity of 2BCM/year, operation 2007.

Hon dat omon PHU My

105+5 km

PETRO 50-60 km OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM Gas Industry: Dinh co – PhuMy complex

500KV Electric-line

CARIGALI

Hon dat omon PHU My

107 km

105+5 km 16 inch CARIG

Block B 52/97 PETRO 2-3,7 Bcm/year 50-60 km 270 km 24-26 inch

Designl capacity • Dinh co LPG plant (100% Petrovietnam), capacity 300,0002 Bcm/year 365 km

ton /year (operation 1998). 26 inch

289+43 km • Phu My UREA plant (100% Petrovietnam), capacity 740,000Designl capacity 18 inch tons/year (operation Sep.2004). 6-7 Bcm/year • Phu My Power plants: 06-2

PM3_CAA •PM I 2,5/2 bcm/year West & Red Orchid • PM 2.1; PM 2.1 Extension; PM 2.2 2,1- 2,7 Bcm/year 2002 •PM 3 Existing Pipeline Existing Power Plant •PM 4 Pipeline Under Construction Expected Power Plant Expected Pipeline from Block B Fertilizer Plant OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM Gas Industry: Camau Power-Fertilizer Complex

500KV Electric-line

CARIGALI

Hon dat omon PHU My

107 km

105+5 km 16 inch CARIG

Block B 52/97 PETRO 2-3,7 Bcm/year 50-60 km 270 km 24-26 inch

Designl capacity 2 Bcm/year 365 km

26 inch

Camau Power-Fertilizer289+43 km Complex: Designl capacity 18 inch 6-7 Bcm/year

• Urea plant : 800,000 tons of urea /year 06-2

486PM3_CAA MM USD(100% Petrovietnam) 2,5/2 bcm/year West & Red Orchid • Power plant: 720 MW 380 MM USD(100%2,1- 2,7 Bcm/year 2002 Petrovietnam) Existing Pipeline Existing Power Plant • Feedstock:Pipeline Under Construction Natural gas from PM3-CAA block.Expected Power Plant • Operation:Expected Pipeline from End Block B 2006. Fertilizer Plant OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM Gas Industry: Omon planned Power Plants

500KV Electric-line

CARIGALI

Hon dat omon PHU My

107 km

105+5 km 16 inch CARIG

Block B 52/97 PETRO 2-3,7 Bcm/year 50-60 km 270 km 24-26 inch

Designl capacity 2 Bcm/year 365 km

26 inch

Omon Power Plants289+43 km Designl capacity 18 inch 6-7 Bcm/year

• Omon Power plants: I & II 06-2

• Capacity: 3000 MW PM3_CAA 2,5/2 bcm/year West & Red Orchid • Feedstock: Natural gas from B&52/97 blocks.2,1- 2,7 Bcm/year 2002 • Operation: End 2008. Existing Pipeline Existing Power Plant Pipeline Under Construction Expected Power Plant Expected Pipeline from Block B Fertilizer Plant OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM Gas Industry: OPPORTUNITIES & CHALLENGES

¾ The Government pays special attention to gas industry. ¾ Gas industry has an important role in the national strategy of socio-economic development and energy security. ¾ It is one of the leading industries in the industrialization and modernization of our country. ¾ The potential reserves of gas is much larger than the discovered reserves. The country is very promised in oil and gas resources with almost 50% of potential are under- explored ¾ Gas potential is large, but the fields are scattered, discovered reserves is at medium level and in some areas CO2 content is high. OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM Gas Industry: OPPORTUNITIES & CHALLENGES

¾ In the coming year, energy demand will increase rapidly. By 2020, gas demand will accounts for 20% of the total energy demand ¾ Gas market has been newly established and the number of customer is slowly developed ¾ The legal and fiscal regime is flexible and competitive in comparison with regional countries ¾ The opportunities open for all companies of all sizes ¾ Vietnam is considered one of the most safety countries to invest OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM Gas Industry: OPPORTUNITIES & CHALLENGES

¾ Expanding exploration and development activities throughout the country ¾ Maintain gas production from current fields and increase gas production from developing fields ¾ Developing infrastructure – gas market and pipelines; diversify gas market consumption ¾ Promote the application of technologies using gas as raw materials ¾ Attracting more foreign investment: • Improving legal and administrative framework, offer more incentives for foreign investors • Preference given to companies with long- term commitments to gas projects RequestRequest forfor MoreMore InformationInformation

Dr. Tran Canh President and CEO

Mr. Nguyen Dang Lieu Vice President

VIETNAM OIL AND GAS CORPORATION (PETROVIETNAM) 22 Ngo Quyen Street,Hoan Kiem District, Hanoi, Vietnam

Tel: (844) 825 2526 Fax: (844) 826 5942 Website: www.petrovietnam.com.vn Petrovietnam

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