PetroVietnam, Zarubezhneft Mull Barents Sea Oil Joint Venture

HANOI - State-run Vietnam Oil and Gas Group, or PetroVietnam, said Thursday that it is in talks with Russia's state-controlled Zarubezhneft to form a new joint venture to operate in the Barents Sea, as it is seeking to boost its overseas crude-oil output.

The new joint venture, likely to be named Rusvietshelf, will mark another step in oil and gas cooperation between Vietnam and Russia, which have already created several oil joint ventures.

"PetroVietnam gives its top priority to Russia and former Confederation of Independent States when investing in oil and gas overseas, as they have favorable environments," PetroVietnam chairman Phung Dinh Thuc said in a statement on the company's website.

Vietnam's President Truong Tan Sang is leaving Thursday for Russia, where he is expected to witness the signing of several energy cooperation agreements and to visit oil and gas projects.

PetroVietnam said all of its joint ventures with Russian partners have been operating effectively.

Vietsovpetro, 49% owned by PetroVietnam and 51% by Zarubezhneft, as of next month will have produced 200 million metric tons of crude oil from Vietnam's offshore fields since its first commercial oil production in 1981.

Meanwhile, Rusvietpetro is expected to raise its annual crude-oil output from Russia's Neneski Autonomous Region to 3 million tons or 60,000 barrels a day next year, from an estimated 2 million tons this year and 1.5 million tons in 2011, according to PetroVietnam.

Rusvietpetro, also 51%-owned by Zarubezhneft and 49% by PetroVietnam, is expected to start commercial production from a third field in Neneski this month, PetroVietnam said.

In addition, PetroVietnam has also formed joint ventures with and Gazprom to operate in Vietnam and Russia.

PetroVietnam, which has operations in 18 countries, has previously said it hopes to raise its overseas crude oil output to 4 million-5 million metric tons, or 80,000-100,000 barrels a day, by 2015 and 8 million-10 million tons by 2020. Most of the output will be from Russia and Venezuela.

The company's total output is expected to be 15.86 million tons or 318,000 barrels a day this year, up from 15.18 million tons in 2011.

Copyright (c) 2012 Dow Jones & Company, Inc.


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