PetroVietnam Seeks Partners at Home, Abroad for Oil, Gas Development

PetroVietnam is seeking partners to expand its oil and natural gas production at home and internationally to meet Vietnam's growing economy and energy needs, said company officials at the Offshore Technology Conference Monday in Houston.

Vietnam's rising energy demand, which has grown at a rate of 15 percent per year, has prompted the country to seek to aggressively increase its overseas exploration budget. That demand lagged some in the past two years, but is expected to rise again in 2013, said PetroVietnam officials in a panel discussion.

Total oil production in Vietnam has grown to 320,000 barrels of oil per day (bopd)) of sweet crude. PetroVietnam aims to ramp up its production from 120,000 bopd this year to 180,000 bopd in 2015 to 470,000 bopd in 2025. PetroVietnam currently produces 1 billion cubic feet per day (Bcf/d) of gas; plans call for that production to grow to 1.5 Bcf/d within the next four to five years as the company fully develops its offshore gas resources.          

The company started pursuing offshore exploration and production globally in the early 2000s, and now participates in 20 projects in 15 countries globally, including South America, North Africa, Central and Southeast Asia. The company now has 90 production sharing agreements with partners in Vietnam and overseas. PetroVietnam aims to increase its international production from 26,000 bopd to 60,000 bopd by 2015, with first production expected from projects in Peru, Algeria and Russia in November of this year and in 2014 and 2015.

Domestic exploration efforts have focused on Vietnam's offshore continental shelf, but officials say the nation's has significant untapped ultra-deepwater potential with undiscovered resources of 3.250 million cubic meters (114.8 million cubic feet), said Do Van Hau, president and CEO of PetroVietnam. The company is seeking partners to help it address the challenging challenges of producing natural gas with high carbon dioxide content.

The company has interests available in acreage in Uzbekistan and Myanmar; PetroVietnam is negotiating with a partner for its Myanmar interest.

Hau said the company does not have any plans at this time to drill in Cuba. Reuters reported last year that PetroVietnam was considering drilling offshore Cuba in 2013.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

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Seadrill Sells Rig T15 to Partners

Seadrill Limited has entered into an agreement to sell the companies that own and operate the tender rig T15 to Seadrill Partners LLC for a total consideration of $210 million, less approximately $100 million of debt outstanding under the credit facility secured by the T15. The balance of the acquisition price will be financed with vendor financing provided by Seadrill in the form of a loan in the amount of approximately $110 million due in 2016, accruing interest quarterly at 5 percent plus LIBOR. It is expected that the vendor financing will be refinanced prior to its maturity.

The T15 is contracted for a five-year period with Chevron in Thailand at a dayrate of $115,500. The rig is currently undergoing acceptance testing in Singapore prior to mobilizing to its drilling location, which is expected to occur by mid-June. The rig is currently earning a standby dayrate until it arrives in Thailand and commences operations.

The transaction is expected to close prior to the end of May 2013.

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Forest Oil Partners with Schlumberger on Eagle Ford Shale Land

Forest Oil Corp. inked a strategic partnership with oil-fields services giant Schlumberger Ltd. to develop the energy producer's Eagle Ford Shale land in Gonzales County, Texas, allowing for accelerated production growth and improvement of the project's economics.

Forest's shares jumped 11% premarket to $5.55. As of Thursday's close, the stock was down 25% so far this year. Schlumberger's shares closed at $77.14 and were unchanged premarket.

Under the terms of the agreement, Schlumberger will pay a $90 million drilling carry in the form of future drilling and completion services and related development capital in order to earn a 50% working interest in Forest's Eagle Ford Shale acreage position. Forest and Schlumberger will then participate in future drilling on a 50/50 basis.

"We believe that our Eagle Ford position is a valuable oil asset and being aligned and working together cooperatively with a strategic partner such as Schlumberger will greatly enhance the value of this important asset," Forest Chief Executive Patrick R. McDonald said.

He added Schlumberger will provide the technology, integrated services and capital resources needed for Forest to retain and develop a substantial portion of its acreage position.

Forest will be the operator of the drilling program and currently expects the drilling carry will be fully realized by the end of 2014.

As natural gas prices have tumbled, Forest and other companies that focus on natural-gas production have seen revenue decline. Forest has been shedding some of its noncore assets, shifting its focus toward liquids, in an effort to improve its balance sheet. In January, the company sold properties in South Texas, excluding the Eagle Ford Shale, for about $307 million to raise cash to repay debt.

In February, Forest said it swung to a fourth-quarter loss as write-downs and debt extinguishment costs weighed on the company's results, though core earnings topped market expectations.

Copyright (c) 2013 Dow Jones & Company, Inc.

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