The Ministry of Industry and Trade’s (MOIT) report shows that the national oil & gas group PetroVietnam has 13 investment projects overseas and all of them are oil & gas exploration and exploitation. The projects are implemented by PetroVietnam Exploration Production Corporation, or PVEP, a subsidiary of PetroVietnam, under the authorization of PetroVietnam.

Of these, only two projects make profits or have money transferred to Vietnam – Nhenhevsky block in Russia, the project in which PetroVietnam contributes $533.22 million in capital, and Block 433a&416b in Algeria, with the contributed capital of $1.26 billion.

In the Nhenhevsky project, PetroVietnam contributes 49 percent of investment capital in Rusvietpetro joint venture, established to explore and exploit oil & gas in four blocks. By the end of July 2018, PetroVietnam had received $877 million from Rusvietpetro. This means that PetroVietnam has recovered the investment capital and made a profit of $344 million.

As for the other project, MOIT said with the current oil price, the project can have turnover and money transferred to Vietnam.

The other 11 projects are encountering  troubles. PetroVietnam is at risk of losing the investment capital in some projects. Junin 2 project in Venezuela is one of them.

Junin 2 has total investment capital of $1.8 billion for the first phase of development, in 2010-2015. PVEP contributes 40 percent of the capital. It has injected hundreds of million of dollars into it.

However, the project implementation has been suspended per the instruction of the PM released in 2013.

A series of projects in Peru are awaiting to be transferred to other investors. These include Block 67 and Block 39. The 15 percent of shares in PM 304 Block in Malaysia held by PetroVietnam have also been proposed to be divested.

Eight exploration and assessment projects are also facing obstacles.

PetroVietnam contributes 49 percent of capital in Gazpromviet (GPV) which conducts research and executes oil & gas projects in Russia and third countries. 

In April 2017, the Government Office released a document about the Prime Minister’s conclusion about his disapproval of PetroVietnam’s plan to quit the project. 

In October 2017, PM sent a dispatch approving the solution of PetroVietnam continuing the investments in Gazpromviet.

As for the exploration at Marine XI Block in Congo, PVEP’s capital contribution only accounts for 8.5 percent of total investment capital. 

In July 2017, the Congo administration approved the capital transfer. The two sides are following necessary procedures for the deal and PVEP is closing the legal entity in Congo. However, it is meeting some problems in explaining the clause about the pre-emption rights in JOA.

In exploring Danan Block in Iran, PVEP has proposed to suspend the implementation. It has stopped the exploration in M2 Block in Myanmar because of risks. It is transferring the contributed capital in XV Block in Cambodia. Meanwhile, it is unclear about the efficiency of MD2 and MD4 Blocks in Myanmar.

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Luong Bang