Oil and Gas Industry

Vietnam oil and gas industry is ranks the fourth in oil production among Southeast Asian countries. To date Vietnam’s oil and gas industry has produced almost 220 million tons of crude oil and 37 billion cubic meters of natural gas bringing a turn over of US$ 53 billion and contributing US$ 30 billion to the State’s budget. Till December 2007, the industry has attracted approx. US$ 5.8 billion of foreign capital for exploration and production.

Vietnam’s first downstream Dung Quat oil refinery in central Quang Ngai province has been operating since February 2009. In May 2008, the opening ceremony for second oil refinery to be operational by 2013, with attracting capital investment of US$ 6.2 billion, targeted capacity of up to 10 million tons per year, its located in Thanh Hoa province, this is the biggest project between PETROVIETNAM, Japan and Kuwait. PETROVIETNAM is now preparing for its third refinery project in Long Son district of Ba Ria-Vung Tau province.

The Vietnam Government, PETROVIETNAM together with foreign investors will actively invest in the infrastructure such as harbour, petroleum port system, gas pipeline, and gas consumption projects such as LPG, gas-fired power plants, fertilizer plants, etc. to develop the gas market, petroleum refining, petrochemical, petroleum trading and distribution, expansion and development of petroleum services to build an integrated petroleum industry. The total investment needs for 2006-2025 period for the petroleum sector are projected at US$ 30 billion, in which the investment from partners is about US$ 14 billion. (Source: Vietnam National Oil and Gas Group, “PETROVIETNAMs development strategy to 2015 and orientation toward 2025”).

Exploration success is on the rise in Vietnam, with a growing number of international oil companies (IOCs) teaming up with PetroVietnam and finding and developing hydrocarbon resources, particularly gas.

In Vietnam Oil And Gas Report Quarter 2, 2010 posted on the web, the research company with the same name forecasts that the country will account for 1.57 percent of Asia-Pacific regional oil demand by 2014, while providing 4.24 percent of supply. Regional oil production averaged an estimated 8.46 million barrels/day in 2009 and is set to increase to 8.77 million barrels/day by 2014.

In terms of natural gas, demand of 616 billion cubic metres is targeted for 2014 and production should reach 542 billion cubic metres in 2014. Vietnam's share of gas consumption is forecast to be 3.9 percent, with the country accounting for 4.43 percent of supply.

Overall the Vietnamese oil and gas industry is a promising potential. As indicated, there is a need for future investments in both upstream and downstream production in order to tap the country’s recourses effectively.