ENB Pub Note: Vietnam has a monopoly structure run by PetroVietnam and was not mentioned in the article from Asiaoffshore. The update on the new offshore jackup is good news for new drilling as it has been limited, and in my opinion, based upon the financial structuring from the government.
Vietnam’s Oil and Gas Production
Oil Production
-
Current Production: In 2023, Vietnam produced approximately 188,000 barrels per day (bpd) of crude oil, primarily from offshore fields in the Cuu Long and Nam Con Son basins.
-
Historical Context: Production peaked around 500,000 bpd in the early 2000s but has declined due to maturing fields and limited new discoveries.
-
Potential: New projects, such as the Đại Hùng oilfield Phase 3 (first oil flow celebrated in May 2025), could stabilize or slightly increase output in the short term. However, long-term production is expected to decline without significant new investments, with forecasts suggesting 182,250 bpd by 2030.
-
Key Fields: Major producing fields include Bach Ho (White Tiger), Rang Dong (Dawn), Dai Hung (Big Bear), Hong Ngoc, and Su Tu Den (Ruby).
Gas Production
-
Current Production: In 2023, Vietnam produced approximately 8.8 billion cubic meters (bcm) of natural gas, mainly for domestic power generation and industrial use.
-
Growth: Gas production has grown rapidly since the late 1990s, with consumption projected to increase by nearly 60% over the next decade, reaching 14.1 bcm by 2024, driven by demand for CNG-fueled vehicles and gas-fired power plants.
-
Key Fields: Major gas fields include Bach Ho, Rong, Lan Tay/Lan Do, and PM3, with significant reserves in the Nam Con Son and Cuu Long basins.
-
LNG Imports: In 2023, Vietnam began importing liquefied natural gas (LNG), with PetroVietnam Gas (PVGAS) receiving 70,000 metric tons at the Thi Vai LNG terminal, signaling a shift toward cleaner energy.
Reserves
-
Oil Reserves: Vietnam’s crude oil reserves are estimated at 4.4 billion barrels (end of 2021), the second-largest in East Asia after China.
-
Gas Reserves: Proven natural gas reserves are approximately 150 billion cubic meters (5.3 trillion cubic feet), with potential for further discoveries in offshore basins.
Major Oil and Gas Companies in Vietnam
Vietnam’s oil and gas sector is dominated by the state-owned PetroVietnam (National Energy and Industry Group), which holds a monopoly on exploration and extraction. International companies participate through production-sharing contracts (PSCs) with PetroVietnam. Below are the major players:
1. PetroVietnam (Vietnam National Industry – Energy Group)
-
Role: The sole authorized entity for oil and gas exploration, prospecting, and exploitation in Vietnam, operating across the entire value chain (upstream, midstream, downstream).
-
Subsidiaries:
-
PetroVietnam Exploration Production Corporation (PVEP): The upstream arm, established in 2007, manages exploration and production with assets worth VND 114 trillion (~$4.5 billion USD) and verified reserves of 260 million tons of oil equivalent. PVEP operates 33 projects (28 domestic, 5 overseas) and produced 487.5 million barrels of oil equivalent from 2007 to 2020.
-
PetroVietnam Gas Joint Stock Corporation (PVGAS): Handles gas collection, transportation, storage, processing, and LNG imports/exports. Operates three gas pipeline systems (Cuu Long, Nam Con Son, PM3) and two processing plants.
-
PetroVietnam Technical Services Corporation (PTSC): Provides specialized ship services for exploration and production, holding a ~90% monopoly in this segment.
-
Binh Son Refinery Ltd. (BSR): Operates the Dung Quat refinery, processing ~two-thirds of Vietnam’s crude oil.
-
-
Market Impact: Contributes 9–11% of state budget revenue and 10–13% of GDP, with crude oil revenue accounting for 5–6% of the state budget.
2. International Oil Companies
Foreign companies operate under PSCs with PetroVietnam, bringing capital, expertise, and technology. Key players include:
-
ExxonMobil Corporation: Investing in the Ca Voi Xanh (Blue Whale) gas project, with estimated reserves of 150 billion cubic meters. Front-end engineering design (FEED) is complete, with construction expected soon.
-
Eni S.p.A.: Active in upstream exploration and production, leveraging international expertise.
-
Idemitsu Kosan Co. Ltd.: Holds a 35.1% stake in the Nghi Son refinery (Vietnam’s second-largest) and is involved in upstream gas production.
-
Mitsui Chemicals Inc.: Owns a 4.7% stake in the Nghi Son refinery and participates in upstream activities.
-
Jadestone Energy Plc.: Focuses on niche upstream segments, with plans to explore the Phu Khanh basin.
-
Essar Oil and Gas Exploration and Production Ltd.: Engages in upstream exploration, benefiting from Vietnam’s favorable PSC policies.
-
Kuwait Petroleum International: Holds a 35.1% stake in the Nghi Son refinery, designed for Kuwaiti crude blends.
-
Harbour Energy: Operates the Chim Sao and Dua oil fields in Block 12W, contributing to Vietnam’s offshore production.
-
Japan Vietnam Petroleum Co. Ltd. (JVPC): Operating since 1992, JVPC extracted its 100th million barrel of oil in 2005 from offshore fields.
3. Other Domestic Players
-
Vietnam National Petroleum Group (Petrolimex): Dominates the downstream petroleum market with a 49% market share in 2020, focusing on importing, exporting, and retailing petroleum products.
-
PVOIL: The second-largest player in the downstream petroleum market, trailing Petrolimex.
-
Saigon Petro: Holds a smaller share of the petroleum retail market.
Critical Notes
-
Monopoly Structure: PetroVietnam’s monopoly limits direct foreign ownership, requiring partnerships via PSCs. Foreign companies can hold majority stakes and gain output shares, but all projects involve PetroVietnam.
-
Infrastructure: Vietnam has invested in offshore platforms, pipelines, and refineries (Dung Quat and Nghi Son), but refineries are not optimized for all crude types, leading to significant imports.
-
Export Markets: Vietnam exports crude oil to Thailand, Australia, and Japan, with Bach Ho’s low-sulfur crude (<0.5%) highly valued.
-
Challenges: Declining production, high exploration costs in deepwater basins (e.g., Phu Khanh), and competition from renewable energy investments restrain growth.
-
LNG Shift: Vietnam’s focus on LNG imports and infrastructure (e.g., Thi Vai terminal) reflects a transition to cleaner energy, aiming to become a regional LNG hub.
Summary
-
Oil Production: ~188,000 bpd (2023), projected to reach 182,250 bpd by 2030.
-
Gas Production: ~8.8 bcm (2023), with consumption expected to hit 14.1 bcm by 2024.
-
Reserves: 4.4 billion barrels of oil; 150 billion cubic meters of gas.
-
Major Companies: PetroVietnam (PVEP, PVGAS, PTSC, BSR) dominates, with international players like ExxonMobil, Eni, Idemitsu, Mitsui, Jadestone, Essar, Kuwait Petroleum, and Harbour Energy active via PSCs. Petrolimex leads downstream.
Offshore drilling unit of Malaysia’s Velesto Energy has won a contract for one of its jackup rigs from Phu Quoc Petroleum Operating Company (PQPOC) in Vietnam.
The contract was awarded to the 2013-built Naga 4 jackup, which was hired to drill over 40 wells for the Vietnamese firm.
The deal for the independent-leg cantilever jackup drilling rig has an estimated contract value of over $40m.
Drilling operations are set to begin in the first half of 2026, with the contract expected to enhance Velesto’s rig utilisation and contribute positively to its financial performance in 2026 and 2027.
This latest agreement is supporting Velesto’s strategic expansion into the Southeast Asian market, most notably Vietnam.
PQPOC was established and nominated by Petrovietnam to operate two blocks offshore Vietnam and develop the Block B Gas Project. The partners in the project are Petrovietnam, Petrovietnam Exploration Production Corporation, MOECO, and PTTEP.
The framework for the project development is to supply over 5bn standard cubic meters of gas per year to customers in the Southwest region of Vietnam.
We give you energy news and help invest in energy projects too, click here to learn more
Energy News Beat