State-backed PetroVietnam and Italian major Eni SpA inked a joint venture agreement Thursday which paves the way for the latter to enter into partnerships for coal bed methane and shale oil exploration projects in Vietnam.
Studies to ascertain Vietnam's unconventional hydrocarbon potential will be carried out by a mixed PetroVietnam-Eni team, Eni said in a statement.
The latest agreement follows the Jan. 21 signing of a memorandum of understanding between the two companies, which allows for PetroVietnam to acquire shares in international areas and blocks where Eni owns the rights to exploration and development.
Eni, which has been awarded rights to participate in offshore blocks 114,120 and 105-110/04, will start exploratory drilling works in June.
Eni gained access into blocks 105-110/04 and 120 when it purchased 25-percent stakes of the blocks from Neon Energy and KrisEnergy in June of last year.
Neon Energy and KrisEnergy detailed Eni's development plans for both of the blocks in a disclosure last year. For block 105, Eni plans to conduct seismic tests over an area of 309 square miles (800 square kilometers) and drill an exploration well. For block 120, the Italian major will conduct seismic tests over an area of 97 square miles (250 square kilometers) and drill an exploration well.
Block 105 covers 2,777 square miles (7,192 square kilometers) in water depths of 66 feet to 262 feet (20 meters to 80 meters) over the Song Hong Basin offshore north central Vietnam. Oil and gas consultancy Netherland Sewell & Associates estimates that the block could contain around 461 million barrels to 1,724 million barrels of proven oil reserves.
Block 120 covers 3,270 square miles (8,469 square kilometers) in the northern Phu Khanh Basin, offshore central Vietnam, where water depths range from 164 feet to 3,609 feet (50 meters to 1,100 meters). Netherland Sewell & Associates projects that the block could house 4 trillion cubic feet (Tcf) to 14 Tcf of proven gas reserves.
In July of last year, Eni also bought a 50-percent interest in block 114 from Essar Energy. Under the contract, Eni agreed to be the operator for the block. The company also committed to acquire a 3D seismic survey, and drill two wells on the block.
Block 114 is sited in the shallow waters of the Song Hong Basin, and is estimated to contain 1 trillion cubic feet of gas resources. The block spans an area of 2,278 square miles (5,900 square kilometers)