Vietnam state oil group plans South China Sea expansion

STATE oil group Petrovietnam and its partners may buy $1.5 billion in Vietnamese oil assets in the contentious South China Sea from ConocoPhillips, according to Petrovietnam’s chief executive.

Petrovietnam’s plan demonstrates a commitment to help protect Vietnam’s sovereignty in the East Sea, as it calls the disputed area, the company’s chief executive, Phung Dinh Thuc, was quoted as saying.

The company will not change its production and exploration activities in the region, Thuc said in a statement published by PV Oil, PetroVietnam’s marketing arm.

The resource-rich area has been the scene of several clashes in recent months between China, the Philippines and Vietnam.

Vietnam and the Philippines have accused China of cutting seismic cables on oil and gas exploration ships, threatening to ram vessels and firing shots at fishermen.

China, Vietnam, the Philippines, Taiwan, Malaysia and Brunei claim parts or all of the South China Sea, a territory believed to be sitting on rich deposits of oil, gas and minerals, as well as being a major shipping lane.

Officials at ConocoPhillips in Vietnam could not be reached for comment. Thuc spoke with domestic media on Tuesday, but his comments were not released until yesterday. “The reason this firm is withdrawing is probably because they are restructuring,” Thuc was quoted as referring to ConocoPhillips, while speaking at the briefing, which excluded foreign media organisations.

“There is also an opinion that this oilfield is in a complicated stage” and they are no longer increasing production, he said. He did not say when a deal might be made.

ConocoPhillips owns a 23.3% stake in a complex of five oilfields in block 15-1 in the area. It owns 36% of the Rang Dong oilfield in block 15-2 in the Cuu Long basin and 16.3% in the Nam Con Son gas pipeline project, the statement said.

It said ConocoPhillips’s assets in Vietnam totalled $1.5 billion.

In Block 15-1 its partners include Petrovietnam with a 50% interest, state-run Korea National Oil Corp with 14.2%, Korea’s SK Corp with 9% and 3.5% owned by Monaco’s Geopetrol. The firm’s partners in block 15-2 are Japan Vietnam Petroleum Co with 46.5% and Petrovietnam with 17.5%.