OilVoice - Vietnam Set to Invest in Sudan Exploration

Vietnam Set to Invest in Sudan Exploration

Tuesday, February 16, 2010

Vietnam's state-run oil firm PetroVietnam has stated its intent in investing in oil and gas exploration and production the African nation of Sudan. The news comes on the back of the signing of an oil cooperation framework agreement between the two countries in December of last year. PetroVietnam has steadily been increasing its involvement in overseas oil projects as domestic oil consumption has come closer to overtaking production in recent years.

Vietnam's Vice President Nguyen Thi Doan is reported to have met with the General Director of the Sudan National Petroleum Corporation (Sudapet) for talks in Hanoi back on February 8. After the meeting, Doan said that she hoped the Sudanese state and Sudapet would create the appropriate conditions for PetroVietnam to carry out a successful investment programme in the country.

Vietnam's deputy Minister of Industry and Trade, Do Huu Hao, whose ministry is responsible for PetroVietnam's activities, also met Sudapet executives during their visit. Following earlier meetings in October and December of 2009, the two state-backed firms - PetroVietnam and Sudapet - were able to sign a framework agreement to allow the companies to work together on projects in Vietnam and Sudan.

Among other activities, PetroVietnam takes on the role of Vietnam's oil and gas exploration and production. The company was placed under the control of the industry ministry back in June 2003. PetroVietnam accounts directly for 20% of Vietnam's oil production and is presently looking at opportunities to expand its activities overseas.

The company has been investing $100 million per annum over the the past five years in the development of its foreign assets. The firm has acquired stakes in projects in Venezuela, Cuba, Russia, Uzbekistan, Laos, Myanmar, Iran, Iraq, Egypt, Mongolia, Tunisia and Algeria along the way. As at April 2009, PetroVietnam held 19 foreign licences in total. And by 2015, PetroVietnam is hoping to have 16 producing fields overseas.

While the lion's share of Western oil companies continue to steer clear of Sudan, firms such as China National Petroleum Corporation (CNPC) and Malaysia's Petronas have benefited from the lack of competition. This is undoubtedly what attracted PetroVietnam to the region also. The firm has tended to invest in countries such as Myanmar and Iran where operating is difficult for most foreign companies. Its international portfolio is set to become increasingly important for PetroVietnam.