PVN-Exxon Mobil in $10 billion project?
PetroVietnam-Exxon Mobil may cooperate in $10 billion project
The Vietnamese Oil and Gas Group (PetroVietnam) may reach a cooperation agreement with Exxon Mobil Corporation (USA) with a value of $10 billion next year, according to PetroVietnam CEO Do Van Hau.
Bloomberg recently quoted Do Van Hau as saying that the two groups will collaborate to exploit gas in the central region to serve thermo-power plants in Vietnam.
This is part of the country’s strategy to develop natural gas fields in Vietnam, estimated to be the fourth largest in East Asia. They were discovered in 2012 by Exxon, and are said to have huge reserves.
The project aims to exploit 6-8 trillion m3 of gas in the continental shelf of central Vietnam. This reserve is equivalent to about two-thirds of Thailand and Myanmar’s gas reserves.
In the first phase, the project will build a gas pipeline from the rig to the processing plant. The gas will then be supplied to a power plant with a capacity of 2,500 megawatts. Hau said this will be one of the largest investment projects of Vietnam. It will reduce power shortages and bring in revenue of $17 billion per year.
PetroVietnam, the major investor, is actively negotiating with partners to implement the project.
Last year Chevron Corporation (USA) looked for partners to sell their shares in a gas field in southern Vietnam after failing to reach an agreement on price with PetroVietnam. To avoid such a situation, Hau said that gas prices will be based on international market prices.
Hau also said that the negotiations with Exxon Mobil on gas prices are expected to start next month, and the two sides expect to reach an agreement by the end of the year or early next year.