dr phung dinh thuc's presentation slides from the 2010 world national oil companies congress

VIETNAM OIL AND GAS GROUP (PETROVIETNAM)

PETROVIETNAMPETROVIETNAM’’ss COOPERATION COOPERATION ANDAND

PLAN FOR GROWTHPLAN FOR GROWTH

By Dr. Phùng Đình ThựcPresident & CEO, PETROVIETNAM

London, UK


OUR VISION

Is to be a Leading Petroleum Group in the Region - A Pride of Vietnam


OUR MISION

Is to contribute to ensuring national energy security, develop and add value to the Nation

Resource


OUR OBJECTIVE

Is to contribute to the well being of the People and the Nation


55

PETROVIETNAM PETROVIETNAM CORE BUSINESSCORE BUSINESS

Oil and Gas Exploration, production, refining, petrochemicals, Oil and Gas Exploration, production, refining, petrochemicals, storage, transportation;storage, transportation;Technical services in the petroleum field;Technical services in the petroleum field;Import and export of petroleum materials, equipment and Import and export of petroleum materials, equipment and products;products;Distributing oil and gas products and hydrocarbon materials;Distributing oil and gas products and hydrocarbon materials;OwnerOwner’’s and operation of power plants.s and operation of power plants.


66

PETROVIETNAM OTHER FIELDSPETROVIETNAM OTHER FIELDS

Surveying, design, engineering and construction;Surveying, design, engineering and construction;Consulting in construction and investment of both petroleum and Consulting in construction and investment of both petroleum and civil engineering projects, and manufacturing and trading in civil engineering projects, and manufacturing and trading in construction materials;construction materials;Real estate development and investment;Real estate development and investment;Finance, banking, insurance, and securities;Finance, banking, insurance, and securities;Manpower training and supply in the fields of petroleum and Manpower training and supply in the fields of petroleum and labourlabourexport;export;Hotel, travel and office management businesses;Hotel, travel and office management businesses;Other business fields as stipulated by Vietnamese law.Other business fields as stipulated by Vietnamese law.


PETROVIETNAME&P PORTFOLIO


DOMESTIC E&PDOMESTIC E&P

57 petroleum contracts in 57 petroleum contracts in effect: effect:

-- 42 exploration42 exploration--15 development/production15 development/production

Cum oil production, May Cum oil production, May 2009: 2009: 250 million tones250 million tonesof crude oil and of crude oil and 50 50 billion mbillion m33 of gasof gas

Partnership with super Partnership with super majors, majors, NOC and majors, majors, NOC and independent IOCindependent IOC


OUR COOPERATION IN VIETNAMOUR COOPERATION IN VIETNAM


Song Hong

Nhóm bểHoàng sa

Nhóm bể TrườngSa

PhuK

hanhNam Côn Sơn

Cuu Long

Malay-Tho Chu Tu Chinh-Vung May

DISCOVERED

Phu Khanh0%

Tu Chinh-Vung May 0%

Cuu Long1694.4 Tr.m3

59%

Nam Con Son429.5 Tr.m3

15%

Malay-Tho Chu407.3 Tr.m3

14%

Sông Hong359.6 Tr.m3

12%


OIL & GAS FIELDS, DISCOVERIES

103

107

108109

104

105

112

114 11

5116

118-2

119-2

117

118-1

119-1

CAM PU CHIA

TRUNG QUỐC

VIỆTNAM

120

121

123124

125

126127

128129

130131132133134

135

WAB-21

04-2

03

04-1

04-315-

206 06-

1

07

08

15-2

15-115-

3 09-2

16-116-2

09-1

09-3

10

11-1

171819

20

12(W)

11-2

12(E)

1314

21222324

25

2627

29

28

30

31

3233

343536

37

38

3940

4142

434445

52/97

48/95 (B)

15°N

10°N

105°E

110°E

Rong

Bach Ho

LanDoLan

Tay

Dai Hung

LÀO

THÁI LAN

N

102

106

20°N

Tien Hai

HANOI BASIN

HainanIsl.

05-1A05-3

Vietnam Claim (1988)

Indonesia Claim

Cambodia Claim (1972)

Joint Historic Waters (1982)

TP HO CHI MINH

HÀ NỘI

0 100

KM

101

110

113

111

010

202/97

01/97

46/02

46-

CaiNuoc

122

Block 06-1: LAN TÂY, LAN ĐỎ

Block 15-2: RẠNG ĐÔNG, PHƯƠNG ĐÔNG

Blocks 05-2&05-3: HẢI THẠCH, MỘC TINH

Block 11-2: RỒNG ĐÔI, RỒNG ĐÔI TÂY

Block 15-1: SƯ TỬ ĐEN, SƯ TỬ VÀNG, SƯ TỬ TRẮNG, SƯ

TỬ NÂU

Block 15-2/01: HẢI SƯ ĐEN, HẢI SỬ TRẮNG

Block 09-1: BẠCH HỔ, RỒNG

PM3-CAA/46-CÁI NƯỚC

Blocks 46/02: SÔNG ĐỐC, NĂM CĂN, NGỌC HIỂN

Blocks B, 48/95, 52/97:KIM LONG, ÁC QUỶ, CÁ VOI

TIỀN HẢI C

Block 05-1a: ĐẠI HÙNG

Blocks 102&106: THÁI BÌNH

Blocks 01&02/97: THĂNG LONG, ĐÔNG ĐÔ

Block 01&02: RUBY, PEARL, TOPAZ, DIAMOND

Block 12E&W: CHIM SÁO, DỪA

Block 09-3: ĐỒI MỒI

Block 16-1: TÊ GIÁC TRẮNG

Block 09-2: CÁ NGỪ VÀNG

Blocks 112&113: BÁO VÀNG

Blocks 103&107: HỒNG LONG, BẠCH LONG

Block 07-03: CA RONG DO


INTERNATIONAL PROJECTS

Petrovietnam has been impletmenting and achieved successful outcomes in many overseas exploration and production activities. PETROVIETNAM has taken part in 23 Exploration and Production project all over the world so far.


Petrovietnam Projects from 2010 – 2015: Upstream• Keep sustainable annual reserve growth (25-30 millions tons oil equivalent/year), 40.000 km 2D, 30.000 km2 3D and drill 200 exploration-appraisal wells.• Supply sufficient gas into NCS#1 and NCS#2 pipelines in near future.• Expand exploration and speed up appraisal in order to develop gas clusters in northern Song Hong Basin. • Exploration Test for stratigraphic traps in Cuu Long Basin.• Sustain annual production of 30-35 millions tons oil equivalent• Start hydrocarbon system studies for onshore Pre-Tertiary Basins.


EXPLORATION ACTIVITY OF VARIOUS PETROLEUM CONTRACTS

= Exploration Priorities


Oil under production

New oil discoveries

Gas under production

New gas discoveries

0

5

10

15

20

25

30

35

0

5

10

15

20

25

30

35

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Oil and Gas production target until 2015 (tons of oil equivalent)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015


GAS

PETROVIETNAM has been carrying out a series of large scaled and complex gas projects so as to meet gas demand of not only electricity production but also chemicals, fertilizer, transportation, construction material, and for the public consumption. In the year of 2009, PETROVIETNAM provided 7,9 billion cubic meters of dry gas; 67 thousands tons of Condensate; and nearly 260 thousand tons of LPG for the domestic consumption.


PETROVIETNAMPETROVIETNAM’’S GAS VALUE CHAINS GAS VALUE CHAIN

Ca Mau & O Mon Complex

Malay Tho Chu Basin LPG Terminal

Dinh Co GPP

Cuu Long Basin

Nam Con Son BasinLPG

CONDENSATE

PIPELINE GAS - CNG

Condensate Processing Plant

Power Plants

Fertilizer Plants

Industrial

Commercial

LPG Distributor

Industrial

Commercial


CAMBODIA

Ca Mau Complex

Vietnam –Malaysia CAA

O Mon

HiepPhuoc

Dinh Co GPP

Cuu Long Basin

Nam Con Son Basin

Ma Lay ThoChu Basin

Bach Ho –Phu My PL:•Capacity: 2 bcmpa•Length: 117 km•PL Diameter: 16”

Nam Con Son PL:•Capacity: 7 bcmpa•Length: 400 km•PL Diameter: 26”

PM3-Ca Mau PL:•Capacity: 2 bcmpa•Length: 330 km•PL Diameter: 18”

Block B – O Mon PL:•Under Construction•Operation in 2014•Capacity: 7 bcmy•Length: 400 km•PL Diameter: 28-30”

Southeast-Southwest PL:•Capacity: 2 bcmpa•Under FS•Expected to operation in 2012

your life

PETROVIETNAMPETROVIETNAM’’ S GAS OFFSHORE PIPE LINESS GAS OFFSHORE PIPE LINES

Nam Con Son 2 PL:•Capacity: 7 bcmpa•Length: 330 km•Under FS


VUNG TAU

National Road 51A

Go Dau

My XuanPhu My

Phu My PowerPhu My FertilizerPhu My GDC

BA RIA

Dinh Co Gas Plant

Nhon Trach PowerHiep Phuoc Power

Nhon TrachTan Thuan

Ong Keo

Ba Ria Power

PETROVIETANMPETROVIETANM’’S GAS ONSHORE PIPELINESS GAS ONSHORE PIPELINES


LPG MARKET SHARELPG MARKET SHARE

100% PIPED GAS IN VIETNAM SUPPLIED BY PETROVIETNAM100% PIPED GAS IN VIETNAM

SUPPLIED BY PETROVIETNAM

THE DOMINANT ENTITY IN VIETNAM GAS MARKETTHE DOMINANT ENTITY IN VIETNAM GAS MARKET

PVGAS supplied gas to generate 40% of Electricity PVGAS supplied gas to generate 40% of Electricity output and 35% of Urea output of the nationoutput and 35% of Urea output of the nation


POWER GENERATED BY FUEL USED IN 2008POWER GENERATED BY FUEL USED IN 2008POWER GENERATED BY FUEL USED IN 2008

GAS TAKING A GROWING SHARE OF VIETNAMGAS TAKING A GROWING SHARE OF VIETNAM’’S S ENERGY MIXENERGY MIX

• Natural gas is playing an in important role in Vietnam’s development• Gas is a key fuel to support power generation growth

GAS SUPPLY FOR POWER GENERATIONGAS SUPPLY FOR POWER GENERATIONGAS SUPPLY FOR POWER GENERATION


STRONG GROWTH IN VIETNAMSTRONG GROWTH IN VIETNAM’’S GAS DEMANDS GAS DEMAND


VIETNAMVIETNAM’’S LNG IMPORT PROJECT S LNG IMPORT PROJECT -- OBJECTIVESOBJECTIVES

Objectives of the LNG import project: •Enhance national energy security•Diversify the country’s fuel mix•Address the projected gas supply shortfall•Develop the gas market

Potential gas supply shortfall:• Over 2 mmtpa in 2015 & about 5 mmtpa in 2020.

Vietnam Gas Supply Demand BalanceVietnam Gas Supply Demand BalanceVietnam Gas Supply Demand Balance


THE LNG IMPORT SCERARIOSTHE LNG IMPORT SCERARIOS

FSRU

Land Base Terminal Stable and continuous operation

Planned to start by 2015 for long term contract

Import volume of 1 MMTPA & expanded to 3-6 MMTPA by 2020/2025 based on gas market development

Allow quick delivery to meet domestic gas demandPlanned to start by 2012 for Fast-track period.LNG import volume is up to 1 MMTPA


POWER

To date, PETROVIETNAM has undertaken construction of 10 power projects with a total capacity of about 10 thousand MW. In addition to the Cau Mau Gas fired Power Plan No 1 and No2, Nhon Trach gas-fired Power Plan No 1 (the total capacity of the three plants is 1950 MW) has been completed and put into operation. PETROVIETNAM has also begun construction on the Vung Ang Coal Fired Power Plant No 1 and Hua Na Hydro Power Plant, and is preparing to build the Thai Binh Coal- Fired Power Plant No 2 and Long Phu Coal- Fired Power Plant No 1.

In order to meet the demand for electricity and contribute to ensuring the energy security of the country, PETROVIETNAM is stepping up investment in the electricity sectors, becoming the second largest electricity producer in Vietnam, behind the Electricity of Vietnam Group (EVN)


Projects on the Operation

Projects under Construction

Beside that, PETROVIETNAM has participated in a number of hydro-carbon power plant including Hydro Carbon Nam Chien. các dự án phong điện.In the year of 2009, PETROVIETNAM did provide about 8.47 billion kWh for the country network of electricty.

POWER


In 2009: Dung Quat Refinery- the first refinery in Vietnam started its commercial production since February, 2009 and contributing to increase the income and benefit of PETROVIETNAM.

Oil and Gas processing activities, one of the core businesses which plays an important parts for the development of PETROVIETNAM, aim to raise the added value of crude oil and gas production, to save foreign currecy, to secure the national energy security, to contribute to the Nation’s industrialisation and modernisation, and to enhance the PETROVIETNAM’scompetitiveness in the world also.

REFINERY, PETROCHEMICAL AND BIO FUEL

Besides the operating plans such as Dung Quat Refinery, DOP Plant, Phu My Fertiliser Plant, Condensate Processing Plant, PETROVIETNAM has been actively carrying out various projects of refinery, petrochemical and bio-fuel as well as studying the upgrading and expansion.



REFINERY – OPERATING PLANTSDUNG QUAT OIL REFINERYThe first oil refinery in Quang Ngai Province with the Capacity of 6.5 million tons of material crude oil per year, was commercially operated and produced first production in February 2009.

CONDENSATE PROCESSING PLANTThe Plant locates in Ba Ria Vung Tau Province with the Capacity of 130,000 tonnes of condensate per year, started operating in 2003. Its processing capacitty will be increased to 250,000 tons of condensate per year in the year 2011-2012.



REFINERY – PROJECTS UNDER CONSTRUCTIONNGHI SON REFINERY AND PETROCHEMICAL COMPLEX

Location: Nghi Son Economic Zone, Thanh Hoa ProvinceCapacity: 10 tonnes of crdue oil per year Expectied Operation: 2014-2015

REFINERY NO. 3 (LONG SON REFINERY)Location: Ba Ria- Vung TauCapacity: 10 tonnes of crdue oil per year Expectied Operation: 2016-2020



PETROCHEMICAL - OPERATING PLANTSDOP PLANT

Location: Dong Nai ProvinceCapacity: 30,000 tons of DOP per yearOperation: since 1997

PHU MY FERTILISERLocation: Ba Ria Vung Tau ProvinceCapacity: 740,000 tons of Urea per yearOperation: since 2004

PETROCHEMICAL - PROJECTS UNDER CONSTRUCTIONDUNG QUAT POLYPROPYLENNE PLANT

Location: Quang Ngai ProvinceCapacity: 150,000 tons of Polypropylenne per yearExpected Operation: 2010

CA MAU FERTILISER PLANTLocation: Ca Mau ProvinceCapacity: 800,000 tons of Urea per yearExpected Operation: 2012

THE SOUTH PETROCHEMICAL COMPLEXLocation: Ba Ria Vung Tau Province Capacity: 3 million of feedstock per year

Expected Operation : 2014DINH VU POLYESTER FIBRE PLANT

Location: Hai Phong CityCapacity: 170,000 tons of fibre product per yearExpected Operation : 2011



BIO FUEL - PROJECTS UNDER CONSTRUCTIONPHU THO BIO-FUEL PLANT

Location: Phu Tho ProvinceCapacity: 100 million litres of ethanol product per year Expected Operation: 2011-2012

QUANG NGAI BIO-FUEL PLANTLocation: Quang Ngai ProvinceCapacity: 100 million litres of ethanol product per year Expected Operation: 2011-2012

BINH PHUOC BIO-FUEL PLANTLocation: Binh Phuoc ProvinceCapacity: 100 million litres of ethanol product per year Expected Operation: 2012


QUALITY, HEALTH, SAFETY AND ENVIRONMENT POLICY OF PETROVIETNAM

PETROVIETNAM always pay much attention to management activites ensuring Quality, Safety, Health, Environment.

Safety – Health – Environment (SHE) are the first responsibility and a component in production and business management..

PETROVIETNAM shall apply all appropriate measures to alleviate or mitigate risks to human life and health, or causing damage to assets or the environment.


PLAN FOR GROWTH


OBJECTIVEOBJECTIVE

DualDual--Purpose DevelopmentPurpose Development

—— SustainablySustainably/profitably grow all along the petroleum /profitably grow all along the petroleum value chain, domestically and internationally;value chain, domestically and internationally;

—— Ensure energy supply for national economic Ensure energy supply for national economic developmentdevelopment


TARGETTARGETNEW RESERVENEW RESERVE

(million ton of oil equivalent)(million ton of oil equivalent)Period 2011Period 2011--20202020

–– Domestic Domestic 390390--470470

–– OverseasOverseas 150150--165165

TOTALTOTAL 540540--635635

PRODUCTION PRODUCTION (million ton (million ton of oil equivalent perof oil equivalent per year)year)

Period 2011Period 2011--20152015 Period 2016Period 2016--20202020

–– Domestic Domestic 2727--3939 3030--3333

–– OverseasOverseas 33--7 7 1010--1515

TOTALTOTAL 3030--4646 4040--5858


WAYS TO ACHIEVEWAYS TO ACHIEVE

Domestic:Domestic:–– PromotePromote exploration in exploration in thethe continentialcontinential shelfshelf ofof Vietnam:Vietnam:

•• PartneringPartnering withwith currentcurrent andand new new playersplayers; or; or•• OperatingOperating withwith allall exploration exploration riskrisk..

–– MaintainMaintain//IncreaseIncrease production by:production by:•• OptimizeOptimize production production fromfrom currentcurrent fieldsfields•• Put new Put new fieldsfields onstreamonstream soonestsoonest•• ApplyApply enhancedenhanced recoveryrecovery methodsmethods•• DevelopDevelop marginal marginal fieldsfields, , gasgas withwith highhigh COCO22 contentcontent


WAYS TO ACHIEVEWAYS TO ACHIEVE

International:International:

–– ExpandExpand exploration exploration worldwideworldwide, , focusfocus on on RussianRussian,, ,, SouthSouthAmericaAmerica, , NorthNorth/Central /Central AfricaAfrica, , SouthestSouthest AsiaAsia, ,

–– Put new Put new fieldsfields onstreamonstream..–– Acquisition Acquisition ofof producingproducing assetsassets


PETROVIETNAMPETROVIETNAM’’S PARTNERSHIPS PARTNERSHIP

One of our important strategic thinking is to One of our important strategic thinking is to collaborate with strategic partners in Vietnam and collaborate with strategic partners in Vietnam and world wideworld wideMany oil and gas cooperation agreements signed Many oil and gas cooperation agreements signed between between PetrovietnamPetrovietnam and and NOCsNOCs, , IOCsIOCs


CLOSING NOTES CLOSING NOTES


PetrovietnamPetrovietnam has achieved sustainable growth, primarily in has achieved sustainable growth, primarily in domestic oil and gas related businessdomestic oil and gas related business

International expansion as effective way to grow and ensure International expansion as effective way to grow and ensure energy supply for national economic development. energy supply for national economic development.

Improving performance through enhancing its effectiveness and Improving performance through enhancing its effectiveness and efficiency will lead efficiency will lead PetrovietnamPetrovietnam to become a competitive to become a competitive organization, in the region in the immediate future and worldwidorganization, in the region in the immediate future and worldwide e in the longer runin the longer run

PetrovietnamPetrovietnam values its human resource as the most valuable asset values its human resource as the most valuable asset of the group and as the key to future success of the group and as the key to future success

One of our important strategic thinking is to collaborate with One of our important strategic thinking is to collaborate with strategic partnersstrategic partners


PetrovietnamPetrovietnam’’ss Development Strategy in the futureDevelopment Strategy in the future

Promote Exploration and Production (Upstream) activities in Promote Exploration and Production (Upstream) activities in VietnameseVietnamese’’s continental shelf;s continental shelf;

Develop refinery gas industry and petrochemical industry and Develop refinery gas industry and petrochemical industry and power industry;power industry;

Step by step expand petroleum activities overseasStep by step expand petroleum activities overseas


PETROVIETNAM, with these development strategies, desire PETROVIETNAM, with these development strategies, desire and willing to cooperate with you, the National Oil Companies and willing to cooperate with you, the National Oil Companies and International Oil Companies, for the development and for and International Oil Companies, for the development and for

the sake of each parties and also contributing to the worldthe sake of each parties and also contributing to the world--wide energy securitywide energy security


PETROVIETNAM’s policy is to strengthen existing and establish new cooperation/alliance

with a view to create value for all parties


THANK YOU THANK YOU FOR YOUR ATTENTION FOR YOUR ATTENTION !!

dr phung dinh thuc's presentation slides from the 2010 world national oil companies congress

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