PetroVietnam seals deal to sell gas to 2 Japan firms

HANOI: Vietnam’s state oil firm PetroVietnam said yesterday it has signed an agreement with two Japanese companies to sell gas from a South China Sea oil block close to waters disputed by Beijing.

Vietnam is struggling to maintain its crude oil and gas output amid declining production from key fields and ongoing pressure from China that has affected work on some projects.

“The development of the project is significant since exploration and production activities have slowed down in recent years because of tensions in the South China Sea, the ongoing corruption crackdown and persistently low crude oil prices,” said a PetroVietnam official in a statement.

The gas sale-purchase agreement, signed here on Tuesday, would “significantly contribute to ensuring the country’s energy security”, said PetroVietnam. PetroVietnam said in April maritime tensions with China would hurt its offshore exploration and production activities this year.

China’s U-shaped “nine-dash line” marks a vast expanse of the South China Sea that it claims, including large swathes of Vietnam’s Exclusive Economic Zone.

Sao Vang-Dai Nguyet, located at blocks 05-1b & 05-1c 300km southeast of Vietnam’s coast, was 43.08 per cent owned by Idemitsu Kosan, 36.92 per cent by Teikoku Oil (Con Son) Co and 20 per cent by PetroVietnam, said PetroVietnam.

The development of the project is significant since exploration and production activities have slowed down in recent years... PETROVIETNAM