OREANDA-NEWS. Gazprom Neft and Vietnam Oil and Gas Group (Petrovietnam) have signed a series of agreements to extend their collaboration activity. The documents were signed in Hanoi (Vietnam), in the presence of the Prime Minister of the Russian Federation, Dmitry Medvedev and the Prime Minister of Vietnam, Nguyễn Tấn Dũng.

Alexander Dyukov, Chairman of the Management Board of Gazprom Neft, and Nguyen Xuan Son, Chairman of the Board of Directors of Petrovietnam, signed a memorandum to extend their collaboration on joint oil and gas exploration, production and development projects on the Pechora Sea shelf (at the Dolginskoye field and the Severo-Zapadnyi (North West) licensed block). The two parties have agreed to create a dedicated working group of experts from both companies. By the end of October 2015, the parties will form a list of priority oil and gas fields and agree the basic terms of the partnership before further agreements are signed. The projects will be implemented via joint ventures of Gazprom Neft and Petrovietnam, in which the stakes of each party will be negotiated.

In addition, Alexander Dyukov and Nguyen Xuan Son have signed a document outlining key provisions of an agreement allowing Gazprom Neft to acquire a share in the Vietnamese Dung Quat refinery. During the period set out by the agreement, Gazprom Neft will have exclusive rights to negotiate with Petrovietnam on acquiring its shares in the refinery.

In accordance with the agreement previously concluded between Gazprom Neft and Petrovietnam, Gazprom Neft plans to acquire a 49% stake in the plant which is owned and operated by Binh Son Refining and Petrochemical company. Plans to modernise the Dung Quat refinery will increase capacity from the existing 6.5m tonnes to 8.5m tonnes per year, and improve the efficiency of its technological processes enabling the plant to switch over to producing Euro-5 standard motor fuels. Gazprom Neft’s share of investment in the modernisation project will be proportionate to its share in the plant.

Vietnam Oil and Gas Group (Petrovietnam) is a Vietnamese state oil and gas company headquartered in Hanoi. The company operates oil & gas production, transportation and processing in Vietnam and abroad.

The Dung Quat oil and gas processing plant situated in central Vietnam is the only working refinery in Vietnam. Dung Quat’s existing capacity is 6.5 m tonnes. The refinery was commissioned in 2009.

The Dolginskoye oil field is located in the centre of the Pechora Sea, 120 kilometres south of the Novaya Zemlya archipelago and 110 kilometres north of the mainland coast. The field, discovered in 1999, lies at a depth of 35–55 metres below sea-level. 2D seismic surveys have been undertaken at the field extending more than 11,000 linear kilometres, as well as 3D seismic surveys covering an area of 1,600 square kilometres.  Four exploration wells have been drilled - three in the north and one in the south of the Dolginskoye field. The North West license block is situated in the Pechora Sea, relatively near to the Dolginskoye and Prirazlomnoye shelves where Gazprom Neft is also operating. The sea at the block has a depth of around 200 metres. 2D seismic surveys carried out on the block covered 11,500 linear kilometres in total at a relative density of 1.17 linear kilometres/cubic metres. The block has an area of 8.86 thousand square metres and its potential reserves (classified D1 according to Russian standards) are estimated at more than 105 million tonnes of oil and condensates, and 60 billion cubic metres of gas. Gazprom Neft holds a total of five licenses for the blocks on the Arctic shelf and approximately 70 licenses for exploration and development of onshore fields in different regions of the Russian Federation.