PetroVietnam Eyes Cuba, Nigeria Oil Exploration Projects '07

SINGAPORE Feb. 6 2007 (Dow Jones Newswires)

Vietnam Oil and Gas Corp., or PetroVietnam, will expand its overseas oil exploration venture with two contracts this year, one in Cuba and the other in Nigeria, a top PetroVietnam official said Tuesday.

While negotiations on the Nigeria oil exploration contract are still preliminary, PetroVietnam is likely to conclude talks with Cuba by the second quarter, the official said.

"We have been there (Cuba) many times, and the government-to-government relationship between Vietnam and Cuba is very good," Le Van Truong, E&P Director for PetroVietnam Investment & Development, said on the sidelines of an exploration and production conference in Singapore.

"We have been offered one project (block), so we have to take this opportunity to get five offshore blocks (in Cuba). We hope to get a contract in the second quarter of this year," Truong said.

The anticipated exploration contract comes on the heels of a cooperation agreement signed last October with Cubapetroleo, Cuba's state-owned oil company, under which Vietnam consented to Havana's oil terms.

Truong added that PetroVietnam is still reviewing data for oil exploration in the Niger delta.

"We got one onshore block, and they offered the data for review. So after the review, depending upon the economics, we'll go for direct negotiations," the official said.

But he said it is difficult to get exploration agreements with other African countries such as Libya and Sudan, due to a lack of regulatory structure.

"It is a very complicated story. We have the data, we submitted a proposal to Libya, but we haven't heard from them," Truong said.

PetroVietnam's deep-water exploration contract offshore Cuba is likely to be signed in middle of this year.

It is still unclear how much estimated reserves there are in the exploration block assigned to PetroVietnam, but the official said the geology is promising.

"It's an exploration contract, and we still have to see how much we discover," he said.

Cuba produces about 80,000 barrels of crude oil a day.

The country, in an effort to exploit its offshore reserves, divided its offshore area into 59 exploration blocks in 2000. Of this, about 20 blocks have been leased to international companies including Spain's Repsol YPF S.A. (REP), Norway's Norsk Hydro ASA (NHY.OS) and India's Oil & Natural Gas Corp. (500312.BY).

The U.S. Geological Survey estimates that the North Cuba Basin could contain about 4.6 billion barrels of crude in proven reserves, with a high-end potential of 9.3 billion barrels.

It is estimated that output in this area alone could bump up Cuba's daily production to 300,000 barrels.

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