Vietnam to Sign Exploration Deal with Talisman Energy Tue

HANOI, Apr 26, 2005 (Dow Jones Commodities News via Comtex)

State-owned PetroVietnam is scheduled to sign a contract Tuesday allowing Canada-based Talisman Energy Inc. (TLM) to carry out exploration and production operations in a block offshore southern Vietnam, a PetroVietnam official told Dow Jones Newswires.

Block 15-2/01, about 100 kilometers offshore Vung Tau city, covers 700,000 hectares in the Cuu Long Basin, where PetroVietnam has found large oil and gas reserves.

The official said PetroVietnam and Talisman will set up a joint venture, called Thang Long Joint Operating Co., or Thang Long JOC, in which the former will take a 40% stake and the latter 60%.

"Both sides have agreed to drill at least two exploratory wells in the next three years," the official said, without elaborating on the value of the contract.

Industry experts said it generally costs about $15 million to drill an exploratory well in the Cuu Long Basin, which has a water depth of about 40-50 meters.

The PetroVietnam official said Block 15-2/01 is believed to have great potential for oil because it is near Block 15-1, where the foreign-invested Cuu Long Joint Operating Co., or CLJOC, has been producing about 50,000 barrels a day during the last three years.

CLJOC's partners comprise PetroVietnam, with a 50% stake, ConocoPhillips (COP), with 23.25%, Korea National Oil Corp., with 14.25%, South Korea Refinery Co., with 9%, and Geopetrol, with 3.5%. (C) 2005 FWN Financial News. All Rights Reserved

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