VIETNAM OIL AND GAS CORPORATION

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM Presented by

Nguyen Dang Lieu Vice President PetroVietnam Qatar – 2006

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

Content Vietnam – Country Overview Exploration Activities Gas Industry in Vietnam Contacts

Vietnam – General Information Official Name

Socialist Republic of Vietnam

Capital

Hanoi

Area

329,560 sq. km

Climate

Tropical Monsoon

Population

82 million (2004)

Currency

Dong (VND); 1USD~16,000 VND

Official Languages

Vietnamese

GDP Growth Rate

8.4% (2005)

Major Export Products

crude oil, rice, marine products, garments, coffee, coal, rubber, nuts

Major Import Products

petroleum products, tractors, tires, steel products, foodstuff, cotton

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

EXPLORATION ACTIVITIES

¾ Foreign investments:

- 50 petroleum contracts (PSC, JOC, BCC)

- 27 contracts still valid - More than 7 billion USD investment 12

Số hộ p đồ ng

10 8 6 4 2 0 1988

1990

1992

1994

1996

1998

2000

2002

2004

Năm

Number of signed contracts/year

Valid contracts

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

EXPLORATION ACTIVITIES

¾Exploration activities started in the early 1960s. ¾From 1988-2004: • Seismic: - 2D - more than 300,000 Km - 3D ~ 40,000 Km2

• More than 600 exploratory and production wells drilled

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

EXPLORATION ACTIVITIES •

8 high potential hydrocarbon basins defined : Song Hong, Phu Khanh, Cuu Long, Nam Con Son, Tu Chinh-Vung May, Malay-Tho Chu and Truong SaHoang Sa Basins.

•

Major exploration targets - Fractured basement plays - Oligocene-Miocene clastic plays - Miocene carbonate plays

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

EXPLORATION ACTIVITIES Total resources in Vietnam Tertiary basins up to 12/2005 • Total potentials: 20,400 MMbbls OE • More than 70 discoveries found • Total oil and gas reserves: 5,700 MMbbls OE

0.1/4700

4700

5950

2.8/1150 5.5/950

0/3150 4.7/4100 0/5950

Gas reserves (TCF) / Potential (MMbbls)

3150

950 4100

1550

Song hong

Phukhanh

Cuulong

Namconson

Malay-Thochu

Tuchinh-Vung May

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

EXPLORATION ACTIVITIES Total resources in Vietnam Tertiary basins up to 12/2005 • Total potentials: 20,400 MMbbls OE • More than 70 discoveries found • Total oil and gas reserves: 5,700 MMbbls OE

0.1/4700

• Gas reserves: more than 13TCF GIIP

Gas Reserve

Basin

2.8/1150 5.5/950

TCF

0/3150 4.7/4100 0/5950

Gas reserves (TCF) / Potential (MMbbls)

Song Hong

%

TCF

%

12.7

32.2%

0.1

0.7%

Cuu long

8.3

20.9%

2.8

21.7%

Nam Con Son

9.6

24.3%

4.7

35.7%

Malay-Tho chu

8.9

22.6%

5.5

41.8%

39.4

100.0%

13.1

100.0%

Total

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

Gas Industry: Production Highlights • Gas produced from fields: Bach Ho, Rong, Rang Dong (Cuulong), Lan Tay (Nam Con Son), Bunga Kekwa - Cai Nuoc, Bunga Raya and Bunga Seroja (Malay)

• Current average gas production rate: 630 MMSCFD (17.8 MMSCMD)

• To the year 2010, the gas production of 650-1000 MMSCFD will be maintained

27 0

Oil MMbbls

30 0

35 0

34 0

21 8

250

28 0

Gas BCF 300

12 1

2009

12 7

11 8

2008

11 0

2007

95

2005

10 2

89

81

2003

2004

75

2002

56

67

11 0

10 0 40 36

1997

54

24 31 .5

1996

45

18 30

1995

4

25 2

20 2

15 3

10 2

4 8. 5

50

28 .5

74

100

12 2

150

2006

15 6

200

Year

Year

1997

1998

1999

2000

2001

2002

2003

2004

2005

Production (BCF)

40

74

100

110

122

156

218

270

280

2010

2001

2000

1999

1998

1994

1993

1992

1991

1990

0 1989

Oil (mmbbls) / Gas (BCF)

350

32 0

400

37 0

Oil and gas production 1989-2004 and prediction to 2010

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

Gas Industry: Objectives ¾ Increase gas production output from 280 BCF in the year 2005 to 400-:-450 BCF in 2010, 500-650 BCF in 2020. ¾ Invest in 03 gas-used industrial regions: Southeast region

capacity 200-300 BCF /y

Southwest region

capacity 150-250 BCF /y

SongHong delta – Thaibinh

capacity 35-70 BCF /y

¾ Put into operation of interconnection and regional/national gas pipeline systems. ¾ Develop of gas fields in Southern of SongHong basin which is highly CO2 content.

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

Gas Industry: Gas-based industry areas

Songhong complex Nghison complex

Future gas complex

Dungquat complex

Available gas complex

Omon complex

Camau complex

Phumy complex

Binh Thuan complex

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

Gas Industry: Pipelines • Rang Dong – White Tiger –Phu My Associated gas (off-shore 107km,Ø16”) with Capacity of 2 BCM/year (operation 1995).

• Nam Con Son Natural gas (off-shore 362km Ø 26”& on-shore38km Ø 30”) with Capacity of 7.5 BCM/year (operation 2003).

• Low-pressure gas supply network of Phu My- Thu Duc (phase 1 operation 2003).

Hon dat

omon

PHU My

105+5 km

PETRO 50-60 km

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

Gas Industry: Pipelines • PM-3 (CAA) – Camau (off-shore 332km, Ø18”), Capacity 2 BCM/year, Operation 2006. • Unocal Blocks-Omon (off-shore 270km, on-shore 130 km, Ø24”), Capacity of 6 BCM/year, Operation 2008.

• Phu My – Ho Chi Minh City (on-shore 71km, Ø22”) Capacity of 2BCM/year, operation 2007.

Hon dat

omon

PHU My

105+5 km

PETRO 50-60 km

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

Gas Industry: Dinh co – PhuMy complex 500KV Electric-line CARIGALI

Hon dat

PHU My

omon

107 km 105+5 km

Block B 52/97 2-3,7 Bcm/year

CARIG

16 inch

PETRO 50-60 km

270 km 24-26 inch

Designl capacity 2 Bcm/year

• Dinh co LPG plant (100% Petrovietnam), capacity 300,000 ton /year (operation 1998).

365 km 26 inch

289+43 km

• Phu My UREA plant (100% Petrovietnam), capacity 740,000 18 inch tons/year (operation Sep.2004). • Phu My Power plants: • PM I • PM 2.1; PM 2.1 Extension; PM 2.2 • PM 3 Existing Pipeline • PM 4 Pipeline Under Construction

Designl capacity 6-7 Bcm/year

PM3_CAA 2,5/2 bcm/year

Expected Pipeline from Block B

06-2

West & Red Orchid 2,1- 2,7 Bcm/year 2002

Existing Power Plant Expected Power Plant Fertilizer Plant

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

Gas Industry: Camau Power-Fertilizer Complex 500KV Electric-line CARIGALI

Hon dat

PHU My

omon

107 km 105+5 km

Block B 52/97 2-3,7 Bcm/year

CARIG

16 inch

PETRO 50-60 km

270 km 24-26 inch

Designl capacity 2 Bcm/year

365 km 26 inch

Camau Power-Fertilizer Complex: 289+43 km

Designl capacity 6-7 Bcm/year

18 inch

• Urea plant :

800,000 tons of urea /year 486 MM USD(100% Petrovietnam) • Power plant: 720 MW 380 MM USD(100% Petrovietnam) Existing Power Plant Existing Pipeline • Feedstock: Natural gas from PM3-CAA block. Expected Power Plant Pipeline Under Construction Fertilizer Plant Expected Pipeline from Block B • Operation: End 2006. PM3_CAA 2,5/2 bcm/year

West & Red Orchid 2,1- 2,7 Bcm/year 2002

06-2

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

Gas Industry: Omon planned Power Plants 500KV Electric-line CARIGALI

Hon dat

PHU My

omon

107 km 105+5 km

Block B 52/97 2-3,7 Bcm/year

CARIG

16 inch

PETRO 50-60 km

270 km 24-26 inch

Designl capacity 2 Bcm/year

365 km 26 inch

Omon Power Plants

289+43 km Designl capacity 6-7 Bcm/year

18 inch

• Omon Power plants: I & II • Capacity: 3000 MW • Feedstock: Natural gas from B&52/97 blocks. • Operation: End 2008. PM3_CAA 2,5/2 bcm/year

Existing Pipeline Pipeline Under Construction Expected Pipeline from Block B

West & Red Orchid 2,1- 2,7 Bcm/year 2002

Existing Power Plant Expected Power Plant Fertilizer Plant

06-2

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

Gas Industry: OPPORTUNITIES & CHALLENGES

¾ The Government pays special attention to gas industry. ¾ Gas industry has an important role in the national strategy of socio-economic development and energy security. ¾ It is one of the leading industries in the industrialization and modernization of our country. ¾ The potential reserves of gas is much larger than the discovered reserves. The country is very promised in oil and gas resources with almost 50% of potential are underexplored ¾ Gas potential is large, but the fields are scattered, discovered reserves is at medium level and in some areas CO2 content is high.

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

Gas Industry: OPPORTUNITIES & CHALLENGES

¾ In the coming year, energy demand will increase rapidly. By 2020, gas demand will accounts for 20% of the total energy demand ¾ Gas market has been newly established and the number of customer is slowly developed ¾ The legal and fiscal regime is flexible and competitive in comparison with regional countries ¾ The opportunities open for all companies of all sizes ¾ Vietnam is considered one of the most safety countries to invest

OPPORTUNITIES FOR DEVELOPMENT OF NATURAL GAS IN VIETNAM

Gas Industry: OPPORTUNITIES & CHALLENGES

¾ Expanding exploration and development activities throughout the country ¾ Maintain gas production from current fields and increase gas production from developing fields ¾ Developing infrastructure – gas market and pipelines; diversify gas market consumption ¾ Promote the application of technologies using gas as raw materials ¾ Attracting more foreign investment: • Improving legal and administrative framework, offer more incentives for foreign investors • Preference given to companies with long- term commitments to gas projects

Request for More Information Dr. Tran Canh President and CEO Mr. Nguyen Dang Lieu Vice President VIETNAM OIL AND GAS CORPORATION (PETROVIETNAM) 22 Ngo Quyen Street,Hoan Kiem District, Hanoi, Vietnam Tel: Fax: Website:

(844) 825 2526 (844) 826 5942 www.petrovietnam.com.vn

Petrovietnam

Thank you for your attention