Posted this over on Fools, but just been told by a couple of good old friendly ex-Fools that everyone had buggered off. So am posting here - would appreciate your help...

Hi all,

Long time no post - been in hibernation mode for quite a while. Trust everyone's well :o)

Anyway, have a question about PSC offshore Vietnam (thus some of you SIA experts may provide some insights into this). PPP farmed into Vietnam Block 07/03 with Premier...

http://www.panpacpetroleum.com.au/pdf/Premier-Farm-in-Releas...

Today, it was announced that PetroVietnam has exercised its pre-emptive rights to farm back-in 15% - http://www.panpacpetroleum.com.au/pdf/PPP-Farm-in-Updates_13...

"...In May 2009 Pan Pacific Petroleum (Vietnam) Pty Ltd (“PPPV”) entered into a farmin agreement with Premier Oil Vietnam South B.V. (“Premier”) to earn a 15% interest in the Block 07/03 Production Sharing Contract, offshore, Vietnam, subject to waiver of pre-emption rights by PetroVietnam and approval by the Vietnamese Government.

PPP has now been advised that PetroVietnam Exploration Production Corporation Ltd (PVEP), intends to exercise the pre-emptive right on behalf of PetroVietnam, and is considering the acquisition of part of the Participating Interest from the assigning Contractor Party, Premier. A further update will be provided when the details of the PVEP position are confirmed..."


There seems to be a lot of confusion over whether this means PPP would lose its entire 15% farmin interest now that PetroVietnam has elected to exercise its pre-emptive rights? Normally, back-ins are spread across all parties in the block. It would seem strange that PPP would be happy to elect to farmin by paying for the cost of drills (in the event of a dryhole), but stand to lose their entire 15% interest should the drill hit the paydirt (which it did in this case).

Thanks in advance!

Cheers,
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