Vietnam lies in a prolific oil and gas producing region with well understood geological plays. Yet large areas have been only sparsely explored and much of that exploration has been done with outdated technology.
Nearby Malaysia and Singapore provide strong regional service hubs and there is a strong local market for both oil and, more importantly, natural gas.
Australian explorers, spanning the spectrum from small juniors to multibillion dollar companies, are entering the region and acquiring acreage positions. Some of these companies have already achieved significant finds and others remain confident that success is not far around the corner.
Santos
Following good results at their Chim Sao North appraisal well, operator Premier Oil and Santos have moved on to drill two more exploration wells in their Block 12W production-sharing contract (PSC) in Vietnam's Nam Con Son Basin.
Premier, Santos and their partner Delek Energy suspended Chim Sao North-2, drilled off southern Vietnam, as a future producer in late May after a drill stem test on two reservoir zones flowed oil and gas.
Santos said the target Middle Dua sand sequence was encountered as expected and the first zone flowed oil at a sustained rate of 1650 barrels plus 1.4 million cubic feet of gas per day. The second zone also flowed oil at a sustained rate of 2680bpd and 2.1MMcfd of gas. No water was produced on either test.
The Block 12W joint venture drilled two exploration wells in 2006, finding gas and oil in the Dua structure and discovering oil with Blackbird-1 well, which has now been named Chim Sao-1.
The Wilboss rig has now moved to drill the Chim Ung and Chim Cong exploration prospects elsewhere in the block.
Chim Ung-1, which will test a prospect on trend with Chim Sao, is targeting an oil discovery in the range of 100-500 million barrels, while Chim Cong-1 has a smaller but still substantial oil target of between 50-100 million barrels.
The partners are aiming at big targets in this block, which is close to Indonesian waters and has similar geology to the West Natuna Sea area, about 300km to the southwest.
Premier operates part of the West Natuna Gas Project, which delivers gas to Singapore.
As well as the 12W Block, Santos has PSCs off central and northern Vietnam in the Phu Khanh and Song Hong basins.
Acting chief executive David Knox says the country offers prospective yet lightly explored basins and multiple material play types with oil and gas potential, as well as rapidly growing markets and a strong regulatory regime.
Knox said Santos was aiming to develop gas for Vietnam's in-country gas needs, as well as oil for domestic and international markets.
In Block 12W, the partners have begun reservoir and facilities studies, and are planning for project sanction in the second half of this year.
Santos expects to produce first oil from Chim Sao and Dua via a floating processing, storage and offtake vessel by 2010, and the company says Block 12W and its other Vietnamese blocks offer several expansion opportunities.
Santos and operator Premier Oil each have a 37.5% interest in Block 12W; Delek Energy holds the remaining 25%.
Origin and Arrow
Origin Energy says its Swordfish and Flounder prospects in Block 121, a 100%-held permit in the underexplored Song Hong Basin off northern Vietnam, could contain 55 million barrels and 56MMbbl of oil respectively.
The Song Hong has attracted increasing attention over the last two years following gas discoveries by PetroVietnam and Petronas, and the take-up of acreage by companies such as Santos, Premier Oil, Essar and Singapore Petroleum Company.
Meanwhile, coal seam methane developer Arrow has partnered with PetroVietnam and is planning to start field activities in the second half of the year over 2743 square kilometres near Hanoi.
Arrow said it considered the acreage to be technically and commercially attractive.
"Thick coal occurs in the Miocene age Tien Hung Formation [and] there are multiple coal seams with combined thickness of over 20 metres, which occur at depths between 450 metres and 800 metres over anticlinal structures within the PSC," the company said.
"The Vietnamese Department of Mines and Geology has estimated very large resources of coal within the Hanoi Basin."
A conventional gas field already developed in this area has gas supply infrastructure in place that could be used by a future CSM development, accordingb to Arrow.
