A rig of PV Drilling (Photo: VNA) Hanoi (VNA) – The Lac Da Vang oil field of Vietnam, with a total investment of nearly 700 million USD, has received the final investment decision (FID), expected to generate considerable work for the Petrovietnam Technical Services Corporation (PTSC) and the Petrovietnam Drilling and Well Services Corporation (PV Drilling) in the coming time.
Murphy Oil Corporation, an oil exploration and production company of the US, on November 3 made the FID for Lac Da Vang, and it looks to gain the first commercial oil from this field in 2026. In July 2023, the field development plan was approved with investment totalling 693 million USD.
Lac Da Vang is hoped to create a new source of work for many oil and gas businesses of Vietnam, of whom the PTSC and PV Drilling, members of the Vietnam Oil and Gas Group (Petrovietnam), are likely to benefit the most.
The PTSC is bidding for building a central processing platform and a well head platform with the contracts’ total value of 283 million USD. It plans to start building the two platforms from 2024 - 2026.
Many financial institutions perceived that with its experience and capacity proved through a number of domestic and foreign projects, the PTSC may win these contracts.
The Vietcap Securities JSC forecast the PTSC will be granted the two contracts at the end of this year or the first quarter of 2024 at the latest. With these contracts, Lac Da Vang may contribute 11 million USD to PTSC’s total profit between 2024 and 2028, equivalent to 3% of the firm’s net profit during the period.
Besides, the PTSC is also bidding for a contract on leasing out a floating production, storage and offloading (FPSO) which is scheduled to be rent out from 2026 when Lac Da Vang is officially put into commercial operation. This will be a potential source of profit for the PTSC from 2027, according to Vietcap.
Meanwhile, Murphy Oil is also surveying the market to seek a supplier of a jackup rig to drill eight wells at the Lac Da Vang field in 800 days. PV Drilling, the leading company in Vietnam in terms of drilling services for oil exploration and production at present, is set to bid for this project, but details haven’t been revealed.
Vietcap predicted that if PV Drilling wins the bidding, drilling will start in 2026 under the 294 million USD contract, equivalent to PV Drilling’s revenue in a year at persent.
Financial institutions held that the FID for the Lac Da Vang field is good news for domestic oil exploration and production next year and beyond.
Domestic exploration and production activities are expected to enter a new development period from 2024 thanks to a number of large projects such as the chain of Block B - O Mon power and gas projects, the Lac Da Vang field, and the third phase of the Dai Hung oil and gas field.
Lac Da Vang, part of Block 15/1-05 in Vietnam’s Cuu Long Basin, has an approved output of 20,000 - 25,000 barrels per day, equivalent to 10 - 12% of the country’s oil production at present. Its break-even price is estimated at around 65 USD per barrel, 23% lower than the current Brent crude oil price.
Currently, Murphy Oil is holding a 40% working interest in the Lac Da Vang field as the project operator, the Petrovietnam Exploration Production Corporation (PVEP) 35%, and SK Energy of the Republic of Korea 25%.
Aside from Block 15-1/05 and Block 15-2/17 in Cuu Long Basin, the US business is also operating two exploration projects in Block 144 and Block 145 in Phu Khanh Basin of Vietnam./.
