Petrovietnam Inks Deal for Cuu Long Basin Block

Petrovietnam signed a product-sharing contract on Saturday with three partners, including oil companies from Russia and Japan, to explore and tap crude oil and gas off Vietnam's southern coast. The deal covering block 09-3 in the Cuu Long basin was signed between state oil monopoly Petrovietnam, Russian state oil firm Zarubezhneft, Japan's Idemitsu Oil and Gas Co and Petrovietnam Exploration and Production Co (PVEP). Petrovietnam general director Nguyen Xuan Nham said parties to the contract - the 45th so far by Petrovietnam with foreign oil firms since 1988 - would set up a joint operation company to oversee operations in the block. A Petrovietnam official said Zarubezhneft has 50 per cent interest in the deal, followed by the 35 per cent stake of Petrovietnam and Idemitsu's 15 per cent. Block 09-3, in an area of 5,600 square km, is close to four oilfields in operation, including Vietnam's key Bach Ho (White Tiger) oilfield, Rong (Dragon), Rang Dong and Ruby. Petrovietnam has said a product-sharing contract it enters would normally last 25 years if the contractors found crude, and 30 years if they found gas. Russian oil firm Zarubezhneft and Petrovietnam have established an oil and gas joint venture, Vietsovpetro, which produces the bulk of crude oil for Vietnam. Idemitsu Oil and Gas Co is an affiliate of Japan's Idemitsu Kosan Group. The company currently operates in blocks 102 and 04-3 off Vietnam's northern and southern coasts, respectively.