Gazprom, Rosneft sign Vietnam deals

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Rosneft

Reuters.

Flag with the logo of Rosneft, Russia's largest oil company, flutters over the Novokuibyshevsk refinery near the city of Samara.

Hanoi - Russian firms Rosneft and Gazprom signed a raft of deals with state energy firm Petrovietnam on Tuesday covering fuel supplies, joint exploration and shared investments in Vietnam's $3 billion Dung Quat refinery.

Under the agreements, signed during a visit to Vietnam by Russian President Vladimir Putin, Rosneft will allow Petrovietnam to explore for hydrocarbons in the Pechora Sea in the Arctic off northwest Russia, a rare opportunity for a foreign firm.

Rosneft and Petrovietnam also signed a pact on the possible purchase of a stake in block 15-1/05 off Vietnam's continental shelf, without giving details.

PVEP, Petrovietnam's exploration arm, signed a production sharing contract in April 2007 with France's Total and SK Energy from South Korea for the block. PVEP controls 40 percent of the block, followed by Total with 35 percent and SK Energy, the remaining 25 percent, according to Petrovietnam.

It was unclear how Rosneft would acquire a stake in the block but in May Rosneft signed a deal for block 05-3/11.

Communist Vietnam is one of Russia's closest allies in Asia, with ties dating back to 1950 when Moscow was part of the Soviet Union.

Many of Vietnam's technocrats were educated there and Russia currently has 90 firms operating in Vietnam.

Two-way trade grew about 20 pct in 2012 to $3.6 billion, which Putin has said he hopes will double within the next two years.

At the signing ceremony, he described Vietnam as a “long-standing and reliable partner for Russia.”

Rosneft, Russia's top crude oil producer, has stakes in an offshore gas block and an underwater pipeline in Vietnam among a number of foreign projects it inherited in its $55-billion takeover of BP joint-venture TNK-BP earlier this year.

State gas monopoly Gazprom, the world's top gas producer, will supply fuel to the Vietnam market, the company's chief executive Alexey Miller said.

Gazprom Neft, Gazprom's oil arm, also agreed to jointly invest with Petrovietnam in Vietnamese firm Binh Son Refining and Petrochemical, which manages the Dung Quat refinery in the central region.

 

NUCLEAR AMBITIONS

The 130,500-barrel-per-day refinery, the only facility of its kind in Vietnam, has plans to expand output by more than 50 percent to 10 million tonnes per year by 2015.

Petrovietnam wants to sell a 49-percent stake in the refinery to foreign investors to raise funds and boost capacity.

The plan had attracted interest from Japan's biggest oil refiner JX Holdings, Petroleos de Venezuela and another firm from South Korea. But early this month JX said it had decided not to participate.

Russia is also planning to supply liquefied petroleum gas to Vietnam, according to one of the deals signed on Tuesday.

The agreements would give Russian firms the chance to tap Southeast Asia's growing energy market, including nuclear power.

“We have discussed a large-scale project to build Vietnam's first nuclear station,” Putin said.

“With Russian aid, Vietnam is setting up a hi-tech sector - nuclear energy production.”

State nuclear firm Rosatom has said it will help Vietnam build its first nuclear power plant in the south-central province of Ninh Thuan and operation is slated to start in 2023.

Putin also said Russia would supply Vietnam with more weapons, but gave no details.

Vietnam has bought six Russian-built submarines under a $2 billion package, the first handed over on November 7. - Reuters


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