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 20th Jul '09 1 of 476

First contract awarded on TGT, it seems, whilst I was away (reported 26th June):

Petroleum Technical Services Corporation (Petroleum Technical Services), a petroleum technical services provider, has entered into four contracts worth $450 million with four oil companies in Vietnam, Dowjones Business news reported. The first contract worth $240 million contract with Premier Oil Vietnam Offshore BV is to manufacture two oil rigs and pipeline systems for production at the Chim Sao and Dua fields in the Nam Con Son basin off the southern Vietnam coast.

The construction related work will be concluded by July 2010.

Petroleum Technical Services also entered into second contract with Hoang Long-Hoan Vu joint operating firms to construct an oil rig, an infield pipeline system and a gas export pipeline system. The contract is valued at $150 million. Te Giac Trang field in the block 16.1 off the southern Vietnam coast will utilize these systems, which are to be constructed within two years.

The Hoang Long group includes PetroVietnam Exploration & Production Co. (PVEP) holding 41% stake; Soco Vietnam with 28.5%; PTTEP Hoang Long Co. with 28.5%; and OPECO with 2%. The Hoan Vu joint venture contains Petrovietnam with a 50% stake; PTTEP with 25%; and Soco Vietnam with 25%

....presumably the basis for this is that  TGT is now effectively a "done deal". That being the case, final confirmations can't be far off!

Briefer report from 1st July in Hanoi Times here: 

The company also signed an Engineering, Procurement, Construction, Installation (EPCI) contract for the developing of Te Giac Trang Oilfield in the bloc 16.1 with the Hoang Long-Hoan Vu Joint Operating Company, a subsidiary of PetroVietnam.


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emptyend 24th Jul '09 2 of 476

News here on a new Vietnam gas project:

Chevron as operator, with PV, PTTEP and Mitsui....spending $4bn on a gas development in Blocks B, 48/95 and 52/97, to produce 500mn cu ft of gas per day.

Now, at first sight, that has nothing to do with SOCO - but those of us who attended recent AGMs will recall that Chevron were pushing for a particularly high price for their gas contract [$8-9 IIRC, albeit in a very different oil price environment]........ what this deal says to me is that they have finally agreed a figure with PV and the Vietnamese government - which ought to mean that there is ALSO some basis emerging for a final gas sales agreement for CNV. IMO.


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emptyend 24th Jul '09 3 of 476

In reply to emptyend (post #2)

what this deal says to me is that they have finally agreed a figure with PV and the Vietnamese government

It turns out I was wrong to guess this. Apparently no price has yet been agreed - and there seems to be a biggish gap. The FEED then looks merely symbolic......

...hey ho!



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emptyend 9th Aug '09 4 of 476

TGT press comments in the last few weeks:

The reserves of oil and gas in place of the field was approved and permitted by the Vietnamese Government for use of reserves data as a base to set up the plan for project development early. PetroVietnam agreed HLJOC to purchase equipment, materials for drilling and constructing offshore projects in order to exploit the oil first.

In the coming time, the exploitation of TGT field will be conducted through the WHP -1 and WHP-4 and is located at the H1/H2 and H3/H4. The full exploited flow of oil will be processed on the FPSO and the exported gas will be forwarded through Bach Ho (White Tiger) platform. According to the plan, HLJOC awards the entire tender package for the PTSC M & C as an EPC contractor: engineering, procurement and construction.

PTSC also signed ship-leasing contracts with Thang Long Joint Operating Co and Truong Son Joint Operating Co. The company also signed an Engineering, Procurement, Construction, Installation (EPCI) contract for the developing of Te Giac Trang Oilfield in the bloc 16.1 with the Hoang Long-Hoan Vu Joint Operating Company, a subsidiary of PetroVietnam.

Hoang Long – Hoan Vu JOC delivered Letter of Award to PTSC as EPCI Contractor. This package belongs to Te Giac Trang Field Project block 16.1 offshore Vung Tau. PTSC shall perform as EPCI Contractor fabricating Wellhead Platform for Hoang Long – Hoan Vu. The project includes 01 Drilling Rig H1 and 02 Jackets (H1 & H4) with the total weight of 6.500 tons along with infield pipeline and gas export pipeline. This is the challenging project with the timing schedule of 24 months and the value of 150M USD.

Not sure there is anything new there, though......


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emptyend 7th Sep '09 5 of 476

News of a contract in TGT:

Malaysia’s Bumi Armada is primed to supply the floating production, storage and offloading vessel for the Te Giac Trang (White Rhinoceros) oil project off Vietnam operated by the Hoang Long joint operating company.

Sources involved with the project told Upstreamonline that Bumi Armada landed the deal, for what is set to be the world’s shallowest water FPSO and is widely regarded to set a design precedent for shallow water FPSOs, particularly for the onerous conditions off Vietnam......

The production capacity of the Te Giac Trang FPSO is understood to be an initial 40,000 barrels of oil per day and 20 million cubic feet per day of gas, and the vessel will have oil storage of a maximum 1 million barrels.

You'll note that the article infers that the TGT development is some distance ahead of Talisman's HST/HSD development - though the PR balance over the last year might suggest the opposite. There is much to be said for simply getting on with it!


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emptyend 9th Sep '09 6 of 476

Worth watching the rig situation too:

PV Drilling now owns and operates three jack-ups, two are due for delivery from Singapore’s KeppelFels by mid-November.

Construction on the first unit, PV Drilling II, is expected to be completed as early as the end of next week, KeppelFels chief executive Tong Chong Heong said at the naming ceremony of the twins......

Both rigs are built to Keppel’s proprietary KFELS B Class design. Keppel has delivered 28 such rigs since 2000, excluding the two PV Drilling units....... 

Its sister rig, PV Drilling II is contracted for a one-well campaign, Kanh said. Talks are underway for a two-year charter on the new jack-up.

I suspect we might know who with? ;-)


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djpreston 21st Sep '09 7 of 476

Govt approval of TGT development finally announced.

Fund Management: European Wealth
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emptyend 21st Sep '09 8 of 476

Govt approval of TGT development finally announced.

Yes indeed....together with a spud announcement on Viodo, which finishes....

The spudding of the Viodo well is the second well in the most active drilling
programme in the Company's history
, which includes a 12 month drilling campaign
in the Cuu Long Basin
, offshore Vietnam, one exploration well on the Marine XIV
Block, offshore Republic of Congo, a further exploration well on Marine XI, and
two exploration wells on the Nganzi Block, located onshore the Democratic
Republic of Congo (Kinshasa).

Obviously a good slice of that is development drilling for TGT.......and it is also noted in the TGT announcement that

This positions the Company for significant production growth when this major field
comes on stream."

....whixh remains mid-2011.  The clock is truly ticking......


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emptyend 2nd Oct '09 9 of 476

More minor TGT contracts news

.......awarded international technical assurance and consulting company Germanischer Lloyd (GL) with both certification and quality assurance and quality control (QA/QC) services during all project phases from design and procurement to final documentation. "These two contracts are the largest ever awarded for inspection and certification services to GL Vietnam," Raymond Haveron, GL's Country Manager Vietnam for Industrial Services, said proudly.

Together with Dr.Ngo Huu Hai, General Manager of Hoang Long JOC, Raymond Haveron sealed the deal at an official signing ceremony in Ho Chi Minh City.The contracts concern the project's two wellheads (H1 & H4), in-field pipelines, flexible riser, pipeline end manifold (PLEM), and moorings.Amongst others, GL will perform design certification; source inspection; survellaince during fabrication, installation, hook-up and commissioning; issuance of Certificate of Safe Operation in conjunction with the Vietnam Register; as well as periodical inspections during operational life and a renewal of certificate every five years throughout the design life."Generally, we will provide all necessary inspection personnel and coordinate all inspection activities of the project," states Raymond Haveron.

....shows things continue to proceed.


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emptyend 31st Oct '09 10 of 476

There was a curious little column in Friday's Investors Chronicle, dealing exclusively with SOCO in Vietnam and tucked away in the section on takeovers (and there seems to be no website link either). I discovered it earlier today whilst out shopping.

The article's writer claims to have spoken to three sources "close to SOCO". One of these suggested that "progess" won't be made on takover discussions until towards the turn of the year. And another suggested that the drilling activity at TGD would commence in February.

Now this last point is clearly an important one and  I have to admit that the suggestion of February is entirely consistent with what I was given to understand on Friday (wholly a result of investigating the Citi note's errors). It is my belief that they will be doing the site survey for the well as soon as the weather clears (probably December, if I understand the weather picture correctly)  and they are expecting to be drilling TGD in Q1 or Q2. It is entirely likely, on my understanding, that February is the target for the spud...with the caveat over timing resulting from the usual potential for delays and unexpected issues.

Whatever turns out to be the case (and perhaps there will be more clarity in the IMS?) it is completely clear to me that Citi and others who were/are expecting no drilling action on TGD until Q3 2010 are going to be embarrassingly wrong.....and, though it would also now seem that the reprocessing cards will be kept very close to the chest until the wells are drilled (which I was not expecting), I would say that .....coupled with the expectation of a drilling start early in the New Year and the idea floated in the IC that the "process" may progress around the turn of the year..... this is non-negative for the near-term outlook. Quite the contrary, in fact, IMO.



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extrader 1st Nov '09 11 of 476

Hi ee,

Thanks for this 'nugget' - it's amazing what you can pick up when out shopping......;>

Now the clincher : did the 'Chronic Investor" reach any conclusion as to investment implications of these developments ? I ask as IC has an unfortunate rep as something of a contrarian indicator !

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emptyend 1st Nov '09 12 of 476

In reply to extrader (post #11)

Well.... I am extremely aware of IC's rep - which goes back at least 25 years to my personal knowledge!

I think the conclusion was simply "watch this space" - which seems fair enough to me in the circumstances! ;-)

Here's another space to be watched: 

....though other sources have it that Vietsovpetro might be taking PV Drilling II on the two-year contract mentioned (as well as PV Drilling III on the five-year contract).

Time will, as ever, tell.


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ArtNouveau 1st Nov '09 13 of 476

Just going through the Tristone and Bank of America buy notes of the summer. Both price targets were short term £16 but an allowance for significant upside with regard TGD. We did reach a £15 intraday high a few days back which is of course no interest to long-term investors.

Both notes emphasise seismic on TGD being revealed September/October. We are currently awaiting drilling news from outside Vietnam but with an upcoming IMS due are other investors also expecting the seismic data to be revealed? Am I right EE that you of the opinion that reprocessing data might be kept close to their chest now that drilling on TGD may be earlier than previously thought (ie February rather than Q2/Q3 '10)?


(purchased another 1000+ at £12.70 on Friday, order took 20 mins to fill, this is now my largest single holding)

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emptyend 1st Nov '09 14 of 476

In reply to ArtNouveau (post #13)

Both notes emphasise seismic on TGD being revealed September/October. We are currently awaiting drilling news from outside Vietnam but with an upcoming IMS due are other investors also expecting the seismic data to be revealed? Am I right EE that you of the opinion that reprocessing data might be kept close to their chest now that drilling on TGD may be earlier than previously thought (ie February rather than Q2/Q3 '10)?

Prior to Friday, my expectation was certainly that the same as indicated in the notes to which you refer - ie that the seismic would be revealed very shortly. It is indeed my view that there is not much point in doing so, now that TGD drilling would appear to be ......err.....more imminent than some have been expecting.

There is also a "need to know" aspect here. Shareholders (especially those who attended the AGM) are well aware of management's views on the potential of TGD. Doubtless any parties who have expressed an interest in SOCO's Vietnam assets are in a similar position. Why bother trying to convince people who remain sceptical and reluctant to be convinced, when one expects to be in a position to drill in the next few months and remove all doubt?.......especially if there is a strong confidence that management expectations will be fully justified by the outcome! There is no need to allow any "uncertainty discount" - nor to bother too much with what the City happens to think - if they are rapidly putting themselves in a position to prove their point via the drillbit!


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emptyend 15th Nov '09 15 of 476

I've been thinking, in recent days, that there are a few "odd things" happening. For example:

a) SOCO's recently appointed house broker hasn't published any note for some while, even after the IMS (AFAIAA)

b) The plan to drill TGD in February/March isn't being "bigged up" as one might expect. Indeed most analysts seem to have paid it no heed at all!

c) There has been no revelation of what the TGD seismic shows (contrary to my expectation)

d) There are no plans to brief analysts this year. However, there is a "US Roadshow" planned for next month.

e) Some fairly clued-in investors (both retail and institutional) are returning to the stock on the quiet, so I understand

f) I note the appearance of apparently-co-ordinated negative postings (based on CNV production issues that are well-known and acknowledged by the company) on second-tier discussion boards

....and I wonder why these things might be.

As someone who misread the signals a year ago, I am loth to raise the thought of M&A again.....but I DO wonder if something might be afoot prior to drilling. I also note, for example, that Chevron seem to have been making progress on their gas disussions in Vietnam (and am reminded that the gas sales price is due to be arbitrated on around now, I think).......

....I wonder (pretty idly, at this point) whether those who are looking to the east for bid prospects may be facing in the wrong direction? Certainly one should note that SOCO have never disclosed who it was that made the approach back in October 2008, so all options remain open.....

OTOH perhaps JPMC are merely waiting until the result on Viodo before writing a pre-roadshow note? Who knows?


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kobb33 15th Nov '09 16 of 476

I followed Emerald for a decade and noticed before the takeover an almost 'lock down' on news flow. So much so that several 'forum' groups ceased to exist.Yet the price very slowly and very quietly increased.

If you want to see ramping and deramping in action go to and watch the Tower forum. Prior to Iti 1 was the most disgraceful exhibition I've seen yet.

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