Vietnam Assets

Monday, Jul 20 2009 by

This thread has been created to discuss the Vietnam assets. These currently consist of:

a) CNV - an operating field in block 9-2 with 155mn boe of gross 2P reserves

b) TGT - a field which is about to enter development. Gross 2p recoverable reserves of 300+mn boe (management think it will ultimately be closer to 500mn) should be confirmed soon, as the final government approval for the development plan is now very close.

c) TGD and the rest of the HPHT appraisal area - huge exploration potential of over 1bn boe P50 recoverable

d) VT appraisal area - a small discovery area likely to be relinquished

I'll fill in more details in due course.



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SOCO International plc (SOCO) is an oil and gas exploration and production company. The Company's segments include South East Asia and Africa. It has field development and production interests in Vietnam, and exploration and appraisal interests in the Republic of Congo (Brazzaville) and Angola. In Vietnam, SOCO's Block 16-1 and Block 9-2 include the Te Giac Trang and Ca Ngu Vang Fields, which are located in shallow water in the Cuu Long Basin, near the Bach Ho Field. SOCO holds working interest in Block 16-1 and Block 9-2 through its subsidiaries, SOCO Vietnam Ltd and OPECO Vietnam Limited. SOCO holds its interests in the Marine XI Block, located offshore Congo (Brazzaville) in the shallow water Lower Congo Basin, through its subsidiary, SOCO EPC. SOCO holds working interest in the Mer Profonde Sud Block, offshore Congo (Brazzaville) through its subsidiary, SOCO Congo BEX Limited. SOCO's subsidiary, SOCO Cabinda Limited, holds participation interests in the Cabinda North Block. more »

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476 Posts on this Thread show/hide all

emptyend 25th Jun '12 217 of 476

On the matter of production rates at TGT, there are some interesting stats in this article arguing that Vietnam will have to explore in the deep water:

Forecasts indicate that Vietnam’s oil production will decline to only 313,000 barrels per day (bpd) by 2020.1 Oil consumption in Vietnam, however, is set to increase by 69 percent between 2011 and 2020, with annual growth of 5 percent to 7 percent.2  By 2020, Vietnam will consume about 554,000 bpd.........

Vietnam now ranks third in terms of proven oil reserves in the Asia-Pacific region, with 4.4 billion barrels.

Based on those figures, TGT could be producing 25-30% of all VN oil and perhaps account for 12% or so of reserves.........not the sort of asset that will be left under-developed in the context of the supply gap that is forecast......


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emptyend 25th Sep '12 218 of 476

There is an interesting BusinessWeek story out today quoting Ed Story:

“There are particular basins in deeper water offshore Vietnam that we think have very significant potential and could change the production decline rate,” Story said. “Some of them are in the claim areas,” he said, referring to parts of the South China Sea claimed by both Vietnam and China.....

Soco is in a better position than many other companies to target prospects in disputed Southeast Asian areas because it has “no interest” in going to China, said Story.

“Of the open areas, you’re talking deeper water and you’re talking claim issues vis-à-vis China,” said Story. “We’re willing to take measures of risk.”

I'm replying to Adam's comment here because the thread title he posted on isn't relevant.

That statement does not seem consistent with a near term takeover, or medium term either as would amount to a poison pill. I don't understand the logic behind this

It is impossible to say whether it is consistent or not, without knowing who might acquire SOCO VN.

The logic is simple - competitors for blocks in Vietnam are being deterred by their interests in China, so there is less competition for the blocks available. It is now clear that there are going to be no serious buyers being considered from China (unless this news is intended to provoke such a move) - but buyers from Europe (such as Perenco) or Japan, for example, are unlikely to be deterred.

More significantly, I think that SOCO are taking the view that a negotiated deal between Vietnam and China is now a realistic possibility (because the Chinese are plainly keen to resolve it and get on) - and there is an opportunity to get sensible assets locked up before there is a final resolution to China's claims. It is my understanding that they think that the recent Chinese moves indicate that the Chinese themselves won't be pushing their "9 dash" claims in all areas, so I'd guess that the blocks that they are mainly interested in won't come to be seen as especially'll note that Story left the exact location of the blocks ambiguous.

It'll be interesting to see - but I don't think we'll have long to wait......I suspect a deal is now quite close, because the potential disposal in Cabinda is IMO a move to reduce overall political risk in the portfolio to balance out the increased risks that may come with new offshore VN blocks.



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adam 25th Sep '12 219 of 476

OK. That would seem like a good bridge type finesse, except that a later comment in the interview got me thinking that they are getting a bit big for their boots....


“If they want to keep what is a very, very significant and current and historical contributor to the balance of payments and the economy, they’re going to have to step out, with people who can take the heat,” Story said. “It’s that simple.”

Following the tenor of your analysis, I would presume you would read that as refering to someone else, not Soco?


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emptyend 25th Sep '12 220 of 476

In reply to adam, post #219

Following the tenor of your analysis, I would presume you would read that as refering to someone else, not Soco?

Well I think what we have here is a developing situation in which very few of the cards being played are going to show up in public. SOCO are of course pretty well placed to ally with VN on these issues at this stage - and indeed discussions of this sort have been going on in a desultory fashion for a year or two, I believe. I'd guess the recent Chinese moves have pushed it up the agenda more quickly.

However, I certainly don't see SOCO taking deepwater assets very far into their lifecycle (even if no VN deal is done soon)......I see it much more as a sensible portfolio move to add upside potential to the VN portfolio.

It isn't beyond the bounds of possibility that a pretty clear resolution will have been obtained in relation to the blocks concerned before any significant explo spend is a buyer of SOCO  VN would likely view it as a useful option to have available (perhaps even if they had interests in China - though that may depend on the level of contentiousness of the location).

Anyway....not much to be said for now - lets see what turns up next..... ;-)

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emptyend 5th Nov '12 221 of 476

It seems that a deal has been done to sell a chunk of the H1 2013 production from TGT.

Three buyers this time at 10,000bopd each (reportedly) - and at a premium of $4.90 to Brent. IIRC only Shell has bought on a term basis for both periods.

The premium is lower than the H2 2012 contract and the amount is (on the face of it) also lower, meaning that a greater proportion of production will probably be sold spot.

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noidea 7th Nov '12 222 of 476

As a follower and an admirer of emptyends knowledge/wisdom I would appreciate advice as to sell now as I am now back in the black after too long in the red. IS THIS SHARE EVER WORTH HANGING ONTO?????

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noidea 7th Nov '12 223 of 476

As a follower and an admirer of emptyends knowledge/wisdom I would appreciate advice as to sell now as I am now back in the black after too long in the red. IS THIS SHARE WORTH HANGING ONTO?????

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MadDutch 7th Nov '12 224 of 476

In reply to noidea, post #223

I have been in Soco for nearly 13 years, know quite a lot about it and I am definitely not selling.

I am adding to my spreadbet position but do not recommend anyone to do the same, it is very high risk.


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kenobi 8th Nov '12 225 of 476

Lets just hope that the market is starting to see the value and the takeover potential. The market seems to have been spooked by the delays in ramping up production, by socos own forcasts we should be producing 90k per day now, hopefully the market is seeing that there are no production problems other than expanding capacity, which might take some arm twisting, but is much better than geological problems. If the market has started to think that there could be a major reserves upgrade in the pipeline, or a deal , or both, then it's logical that the price should start to creep up, I wonder if we'll see any rns's showing who's buying ?

cheers K

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tiswas 8th Nov '12 226 of 476


I would be very surprised if we see any RNS's, IMO the volume has just not been there.

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kenobi 8th Nov '12 227 of 476


I bow to your superior knowledge I haven't checked the volumes, although I suppose if its rising on small volumes thats a good indication that it's in a good position to rocket on positive news

cheers K

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tiswas 8th Nov '12 228 of 476


This is a good reference for historic trade volumes.

There is the question as to what volume is carried out on other exchanges, this information is just for the LSE.

So volumes could be a lot higher than we think, but I would be surprised if sufficient stock is available for the Insti's to pick up in any size at this late stage.

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emptyend 21st Jan '13 229 of 476

Previously I would have put reports like this one in the "incidental" thread, but frankly I think the news that ENI and Petrovietnam have signed a formal agreement is rather more relevant to the end game in Vietnam than it might seem on the face of it:

Rome, 21 January 2013 – The President and CEO of the Vietnamese national oil company PetroVietnam, Do Van Hau, and Eni CEO Paolo Scaroni signed a Memorandum of Understanding for the development of business opportunities in Vietnam and abroad, in Rome today. The agreement was signed after a meeting between Italian Prime Minister, Mario Monti, and the General Secretary of the Communist Party of Vietnam, Nguyen Phu Trong........

....Paolo Scaroni also discussed the development of Eni’s current operations in Vietnam and confirmed its favorable prospects due to the progressive strengthening of Eni's presence in the country, as well as its collaboration with the Vietnamese state company.

ps...well done to extrader for simultaneously covering the bases over on the incidental thread  ;-)

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extrader 21st Jan '13 230 of 476

In reply to emptyend, post #229

Hi ee,

Belated New Year greetings !

I can't help thinking that ENI's just set up a structure that would allow it to offer a quid-pro-quo or two that might prove useful in getting the VietNamese 'on side' in any local negotiations.....


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perro08 21st Jan '13 231 of 476

In reply to extrader, post #230

I am sorry if this is the wrong place for this message but I feel sure that you will excuse in the circumstances.

With great sadness I have to report that Davjo, your respected fellow contributor on these boards has passed away after a short illness.

The support and acknowledgement of his thoughtful and detailed appreciations echo'd here is a matter of some pride for his family.

If anyone feels moved to make personal reflections, please feel free to e-mail myself and I will make sure that the family are aware.


Peter Jones, Davids elder brother.

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jseth123 24th Jan '13 232 of 476

Hi Peter,

Very sorry for your loss. I'd never met him but Davjo had an amazing eye for investment and was only ever constructive to any discussion.

At a time when we all hope this investment that links many of us is about to come to fruition, it's a great shame he won't be here to see how it all pans out. But with the closing of the chapter there will be windfalls for many of us and I wonder if Davjo had a charity close to his heart that people could donate to in order to honour his contributions which may have shaped people's decision making and good fortune.

Just a thought.
My sympathies again,

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perro08 28th Jan '13 233 of 476

In reply to jseth123, post #232

On behalf of Davjo's family may I say a heartfelt thank you for the quite staggering tribute in the form of 'rec's' and in particular to those who sent personal messages.

Most of the family will not have been aware of the esteem in which he was so clearly held by his fellow contributors and your reactions to his passing will be expressed in his ' folder of remembrance'. Perhaps that section will be listed as a PSA (Prophesy Sharing Agreement), he did enjoy a little levity after all.

Best wishes to all, Peter

P.S. For those who very kindly expressed a wish to make a donation to Davids nominated charity, "Cancer Research", the funeral directors will be pleased to receive them at :-

Co-operative Funeralcare 233 London Rd, Hastings, St Leonards-on-sea, East Sussex TN37 6LU

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kenobi 13th Feb '13 234 of 476

operations update just out,

can't be great judging by the share price reaction, down nearly 5% as I write,


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anteos 13th Feb '13 235 of 476

looks like we'll still be here next year, waiting for the reserves update

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kenobi 13th Feb '13 236 of 476

Well I'm trying to understand these figures,

if we go with the most conservative figures, say 466 mb and recovery factor of 28% that would give, 130MB,
of which soco is entitled to 30% ish, so call it 40MB ? then we'd have to add on the cnv reserves, and adjust for whatever could be produced in the remaining licence time, and there is still uncertainty about the fill in drilling there.
(we need to consider other options, including the company's view that recovery factors might be upto 50%, however I'm just taking the lowest figures because I imagine that would be the starting point of anyone buying SOCO vietnam).
I don't suppose that the news about Angola is so terrible, but a little worrying that they are having to give extensions to the option to buy.

TGT production figures are sound, but we're only really getting to just under the 55k per day now, so doesn't appear that much progress has been made in increasing capacity of the fspo beyond it's boiler plate rating of 55k.

Maybe I've got it wrong, but this isn't the sort of result I was expecting based on what the management said at the last agm, I was expecting a somewhat better result (back in september for that matter). However it does say they will continue the monitoring work (unless I'm mistaken), so presumably they're thinking that with more data, and fill in/H5 drilling, the figures will increase.


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