Nov. 21 (Bloomberg) -- TNK Vietnam, a subsidiary of TNK-BP Group, will next month start drilling two sub-sea wells in Vietnam’s Lan Do field, one of the assets purchased from shareholder BP Plc, as it seeks projects in Asia and South America.
First gas from the $400 million Lan Do project is scheduled to come on stream in the fourth quarter of 2012, and will help offset declining production at the nearby Lan Tay field, Hugh McIntosh, general director of TNK Vietnam, said at a press conference in Hanoi today. The company expects 2 billion cubic meters of natural gas output annually from Lan Do, according to a release issued at the press conference.
The company also plans to participate in the current licensing round for offshore oil and gas blocks being auctioned by Vietnam Oil & Gas Group, known as PetroVietnam, according to the press release. BP agreed last year to sell assets in Venezuela and Vietnam to TNK-BP for $1.8 billion as it raises money to help pay for the Gulf of Mexico oil spill.
“Vietnam is an attractive place to do business and TNK-BP is here for the long term,” Chris Einchcomb, vice president of international projects and upstream, said in the release. “As we focus on integrating these assets into the TNK-BP portfolio, we are seeking new opportunities to deepen our presence in the country.”
Gas from the Lan Do field will help compensate declining output from the nearby Lan Tay field, where one or more of the five wells may become “non-operational” from 2013 to late-2014, as gas is depleted and water levels rise, McIntosh said. The rig for use at Lan Do is due to arrive at the site in early December after a minor fitout, and will begin drilling on Dec. 6, he said, adding that the program is “on schedule and on budget.”
TNK-BP, half-owned by BP Plc, received an investment license on Oct. 19 from Vietnam’s Investment and Trade Ministry to operate offshore gas block 06.1, which contains the Lan Tay and Lan Do gas fields, the Russian oil venture said in a statement on that day. TNK-BP bought 35 percent of the block, part of the Nam Con Son gas-to-power project, from the U.K. explorer in April.
McIntosh said the company will participate in the latest oil block licensing round, which is due to receive final bids by Dec. 9, as well as exploring other opportunities within the marketplace. “I fully anticipate this will be part of our ongoing activities in 2012 and beyond,” he said.
PetroVietnam will offer nine offshore oil blocks in its 2011 licensing round, which runs from Aug. 1 until Jan. 5, according to advertisements placed by the company in local newspapers in August.
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