Vietnam to Hold 1st Licensing Round in 2004

Vietnam will hold its first offshore licensing round in June 2004. The country plans to offer around ten blocks in water depths ranging from 1,000 feet to 3,000 feet. Until now Vietnam has only awarded exploration licenses through one-on-one negotiations with oil companies. PetroVietnam as a representative of the central government, would be managing the licensing round. An overseas road show is planned for May of next year to promote the licensing round.

The acreages to be offered have not been finalized yet, but would be concentrated in the Phu Khanh deep water basin along the southern-central coastline of Vietnam, and the Gulf of Tonkin off the country's north according to PetroVietnam. The Phu Khanh basin lies northeast of the producing Cuu Long basin. PetroVietnam currently has eight open blocks in the Phu Khanh basin.

The country is also considering an incentives package to go along with the licensing round. Included in the package would be a decrease in the corporate income tax rates, which currently stands at 50%. Other items also being considered are a profit-sharing ratio more in favor of the investor and longer term contracts.

PetroVietnam already has approximately 7,000-8,000 km of 2D seismic data on the areas it plans to offer, and is going to shoot another 10,000 km of 2D seismic by next June.