Exxon, PetroVietnam to Invest $20B

US oil and gas giant ExxonMobil Corporation  intends to team up with state-owned Vietnam Oil and Gas Group – PetroVietnam – to invest about $20 billion in a gas-fired power complex, according to the Ministry of Industry and Trade sources.

The project will include construction of two power plants with a combined capacity of 6,000 to 6,500 megawatts. The plants would span across 200 hectares in total, but the locations for them have not been disclosed. This project is likely to make the United States one of the top four foreign investors in Vietnam along with Japan, South Korea and Taiwan.

Investments made in Vietnam by the US companies amounts to around $10 billion so far this year. This collaboration places them on the seventh position among the top 10 foreign investors in the country.

Quang Ngai is likely to be the site for this project. Vietnam has suggested four locations about 75-85 kilometers from the lots – all of which are in the Ca Voi Xanh platform. ExxonMobil and PetroVietnam had inked a development deal for this region in 2013 during President Truong Tan Sang’s visit to the US.

ExxonMobil had launched an investment plan several years ago when it encountered gas reserves offshore central Vietnam. At that time, the company had decided to develop the region for commercial purposes and provide power generation.

Exxon’s strength is in its balanced operations, strong financial flexibility, and continuous improvement on efficiency and cost control. The company plans to build an unconventional resource portfolio, in both North America and overseas. This aims at increasing production through increased exposure to large energy resources with long reserve life and low field declines. Despite the collapse in natural gas prices, Exxon expects unconventional gas to play a dominant role in future supplies owing to the rapid decline in conventional production. The company possesses more than 8 million unconventional acres in North America.