BP quits off Vietnam

BP has decided to withdraw from two operated exploration blocks offshore Vietnam that contain the Hai Thach and Moc Tinh gas and condensate fields.

The company said in a SEC filing that Block 5-2 (BP owns 55.9%) and Block 5-3 (BP has 75%) “do not fit” within BP’s current portfolio and that it “has decided to withdraw from them”. BP is currently in discussions with PetroVietnam, the Vietnamese government and joint venture partners to progress its withdrawal, and said it has taken an impairment loss of $210 million related to exploration costs on the two blocks. Co-venturers in the two permits are BP, ConocoPhillips and PetroVietnam. Three wells were drilled on Hai Thach between 1995 and 2002, and BP called the find potentially the largest single gas accumulation in the Nam Con Son basin with estimated gas volumes of 1.8 trillion cubic feet and about 90 million barrels of associated liquids. Moc Tinh was found in 1994 and has not been fully evaluated but contains about 0.5 Tcf of recoverable gas and 10 million barrels of liquids. BP’s efforts to develop the fields have been hampered in recent times by a maritime boundary dispute between Vietnam and China, while low gas prices in Vietnam are an issue too.

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