Energie

OIL
Vietnam has 600 million barrels of proven oil reserves, and further discoveries are likely. Crude oil production averaged over 288,000 bbl/d in 2000, and almost 357,000 bbl/d during the first nine months of 2001. Production has grown rapidly in recent years, from only 175,000 bbl/d as recently as 1996. The country has six operating oil fields, of which Back Ho (White Tiger), Rang Dong, Hang Ngoc, and Dai Hung (Big Bear) are the largest. Most oil exploration and production activities occur offshore in the Cuu Long and Nam Con Son Basin. Vietnam currently has no operating oil refineries - therefore almost all of its oil production is exported. Export markets include Japan (the largest importer of Vietnamese oil), Singapore, the United States, and South Korea. Vietnam had net exports of an estimated 133,000 bbl/d of oil in 2000, and oil exports are one of the country's largest foreign currency earners.

The Vietnamese government controls both the oil and gas upstream and downstream. For upstream activities, Vietnam Oil and Gas Corporation (PetroVietnam), a government-owned company, is the only firm authorized to conduct petroleum operations. Any petroleum exploration and production activities by foreign investors must be conducted in cooperation with PetroVietnam. For downstream activities, several government-owned companies, such as Petrolimex and Petec under the Ministry of Trade, PetroVietnam Trading Company (Petechim) under PetroVietnam, SaigonPetro under Ho Chi Minh City People's Committee, and Vinapco under Vietnam Airlines, have been licensed to import petroleum products. Petrolimex is the largest petroleum products importer. Vietnam has been considering an international public stock offering of a minority stake in PetroVietnam, similar to public stock offerings carried out by major Chinese oil and gas firms in recent years. The Vietnamese government also is considering the offering of greater tax incentives for foreign oil companies.

Vietnam has issued 41 investment licenses for oil and gas exploration since the industry was opened to foreign partners in 1998. About 30 companies, including American, European, Korean, and Japanese firms, now operate in offshore Vietnam. However, several foreign companies have withdrawn from their contracts. Reasons include problems with the Vietnamese regulatory framework and disappointment at recovering smaller quantities of oil and gas than anticipated. The most active foreign company in Vietnam is Zarubezhneft, a Russian oil company whose joint venture with PetroVietnam, called Vietsovpetro, is one of the largest actors in the sector.

Some of the new entrants to Vietnam's upstream have made substantial new finds. A recent major oil find in Block 15-1 of the Cuu Long Basin was announced in October 2000 by a consortium including Conoco, the Korean National Oil Company (KNOC), SK Corporation of South Korea, and the French firm Geopetrol. The first exploratory well drilled by the consortium tested at 12,600 bbl/d. After further exploratory drilling in early 2001, KNOC announced that Block 15-1 contained recoverable reserves of around 400 million barrels. The consortium plans to begin commercial production of 38,000 bbl/d in 2003, which is planned to increase to 70,000 bbl/d by 2005. Conoco also holds interests in some adjacent blocks, including Block 15-2, which contains the 40,000 bbl/d Rang Dong field.

Refining
Currently, Vietnam does not have a major refinery, but it is in the process of building its first. The $1.3 billion Dung Quat Refinery, which is located in Quang Ngai province, will have a capacity of about 140,000 bbl/d. The project is a joint venture between PetroVietnam and the Russian firm Zarubezhneft. Initial construction has begun, and the facility is scheduled to be completed by late 2002.

A second refinery project is under consideration. Mitsubishi and JGC Corporation signed a memorandum of understanding with PetroVietnam in October 2001 covering a feasibility study for the project. The location being considered is Ngai Son, in Thanh Hoa province.

NATURAL GAS
As with oil, Vietnam's natural gas consumption is rising, with further increases expected as additional fields come onstream. The Cuu Long basin is the largest Vietnamese natural gas production area, mostly associated gas from oil production. An existing 100-kilometer (62-mile) pipeline from the Bach Ho field is operating near peak capacity. The Ruby and Rang Dong oil fields, both of which have considerable amounts of associated natural gas, are near the pipeline. However, the Bach Ho pipeline has insufficient capacity to carry gas from these fields. Gas from these fields currently is flared.

BP, Conoco, and ONGC (India) have formed a joint venture with PetroVietnam to develop natural gas resources in the Nam Con Son basin, in the Lan Tay and Lan Do fields. Conoco purchased its stake from Norway's Statoil, which sold off its Vietnamese assets in October 2001. The fields contain an estimated 2 Tcf of natural gas. A new 370-kilometer (230-mile) pipeline will connect the fields to the Vietnamese mainland at Vung Tau. Pipeline capacity will exceed production from the fields, with extra pipeline capacity intended to transport gas from the nearby Hai Tach, Moc Tinh, and Rong Doi fields. The government of Vietnam agreed in September 2000 to a restructuring of the production sharing agreement on the project based on the 1998 foreign investment law, and construction of the $565 million pipeline began in June 2001. The pipeline will come ashore near the Dinh Co Gas Terminal, and an extension will take some of the gas inland about 20 miles to the Phu My power plant. The pipeline will have a capacity of 247 billion cubic feet (Bcf) per year once all phases of construction are completed. This exceeds the expected output of the Lan Tay and Lan Do natural gas fields, so excess capacity will be available for probable future gas finds in the area.

The Malay basin is another potentially hydrocarbon-rich area. TotalFinaElf and Unocal have both found natural gas in exploratory drilling in the area. The region is near the Mekong Delta, which is sparsely populated. Although companies are considering constructing a natural gas pipeline to the Delta, demand in the region might not be able to support the construction. A feasibility study for a pipeline to bring natural gas ashore from the PM3 Block, shared by Vietnam and Malaysia, was commisioned in July 2001. Construction may begin as early as 2003.

Liquefied Petroleum Gas
Vietnam is a growing consumer and exporter of liquefied petroleum gas (LPG). Japan is the major consumer of Vietnamese LPG exports, receiving the country's first export shipment in May of 1999. Domestic consumption is increasing rapidly, expected to reach up to 20% annual growth for the next few years. Vietnam consumed an estimated 250,000 tons of LPG in 2000.

Vietnam's LPG sector has been open to foreign companies since 1998. Saigon Petro, Elf Gas, Petrolimex, and Mobil Unique (a consortium of Mobil, Mitsui, and Unique Gas & Petrochemical), and PTT of Thailand are the major companies involved in the sector. Unique Gas & Petrochemical Plc (UGP), which is involved in the Thai LPG market, could enter the Vietnamese market in the near future. The country's first liquefaction plant at Dinh Co receives gas from the Bach Ho field. It is 100% foreign-owned and is now operating near capacity.

COAL
Vietnam contains coal reserves estimated at 165 million short tons (Mmst), the majority of which is anthracite. Production has increased dramatically in recent years, doubling between 1994 and 1998. This has resulted in an increase in exports (primarily to Japan) and an increase in coal stockpiles. Export markets have been shrinking, which has exacerbated Vietnam's oversupply problem. The state coal company, Vinacoal, cut back production in 1999 in response to the oversupply, but raised it again in 2000 as domestic demand increased.

The Vietnamese government is promoting the construction of coal-fired power plants. Vinacoal plans to build as many as seven new power plants over the next decade, with a capacity of 2,170 megawatts (MW). One 100-MW plant at Na Duong is under construction, scheduled for completion in 2003, and six more are under consideration. Vietnam's coal consumption is expected to increase as it becomes a larger electricity producer. Vietnam previously had focused much more on hydropower, and the shift to coal marks an important change in Vietnam's energy sector.

ELECTRICITY
Although per capita consumption of electricity in Vietnam is among the lowest in Southeast Asia, demand has been on the rise for the past several years, straining the country's generating capacity. As an emerging market, Vietnam has experienced rapid commercial growth, mass migration to major cities, and rising living standards, all of which have contributed to the country's growing demand for electricity. In 1999, Vietnam had a total electric generating capacity of 5 gigawatts (GW). In 1999, hydropower accounted for roughly 52% of electricity generation, while thermal power accounted for about 48%.

The state power company, Electricity of Vietnam (EVN), is working on a plan to develop a national electricity grid by 2020, patching together serveral regional grids. By 2005, EVN aims to build hydropower plants in the central and central highland regions. Three hydroelectric dams, with capacities of between 285 megawatts (MW) and 370 MW, are planned, and construction of the first at Dai Ninh began in 2001. EVN also plans to increase Vietnam's natural gas consumption, using gas from offshore fields to fuel new power plants. Two small gas-fired plants are currently in operation. Construction of Vietnam's first nuclear power plant is included in the plan, to be completed by 2020.

Foreign companies are becoming involved in the growing Vietnamese power market. EVN and a consortium including Tokyo Electric Power (TEPCO), Sumitomo, and Electricite de France (EdF) plan to construct a 715-MW plant ("Phu My 2-2") in the Mekong Delta. The facility is planned to begin commercial operation in 2004. The plant is intended to be fueled by gas from Nam Con Son Basin, which is planned to be tapped by the BP, Conoco, and ONGC consortium. BP also received approval for the 700-MW Phu My 3 project, located in the same area, in April 2001. Siemens will be undertaking the construction work for the facility.

Both of these projects are to be built as Build-Operate-Transfer (BOT) projects, where the foreign investors operate the plants for a set period of time. These projects were held up, though, by disagreements over pricing. The foreign investors considered the prices offered by EVN to be below the levels which would give them a sufficient rate of return on capital. The Vietnamese government eventually stepped in to resolve the issue, and the price was set at 4.09 cents per kilowatt hour (kWh).

A North-South power cable transmits electricity from Vietnam's largest generator, the Hoa Binh hydropower plant in the north, to large population centers in the south, linking the country into one electricity grid. The cable has helped to alleviate an electricity shortage in Ho Chi Minh City. The government currently is considering building more cables. Plans are underway to build an underground electric cable, an above-ground cable, and a transformer station in Tao Dan (in the Ho Chi Minh City area). Construction began in mid-2000 and is to finish in 2002. The $56-million project is being funded by the World Bank. The World Bank also is funding a $201-million project to extend distribution infrastructure into rural areas currently without electricity.

Renewable energy consumption is growing in Vietnam, and the country has great solar power potential. About 50% of Vietnamese in rural areas do not have access to electricity. A solar power cooperation program installed a "Vietnamese-French Friendship Solar Station" in Ho Chi Minh City and aims to bring electricity to the southern provinces of Gia Lai, Quang Nam, and Binh Phuoc. The program plans to include other kinds of renewable energy, such as small hydroelectric plants and wind power. The program is operated by Solarlab and is funded by the French Ministry of Foreign Affairs, Electricite de France, and the European Union.

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ENERGY OVERVIEW
Proven Oil Reserves (1/1/01E): 600 million barrels
Oil Production (Jan.-Aug. 2001E): 357,000 barrels per day (bbl/d), all of which is crude oil
Oil Consumption (Jan.-Aug. 2001E): 153,000 bbl/d
Net Oil Exports (Jan.-Aug. 2001E): 204,000 bbl/d
Natural Gas Reserves (1/1/01E): 6.8 trillion cubic feet (Tcf)
Natural Gas Production (1999E): 35.3 billion cubic feet (Bcf)
Natural Gas Consumption (1999E): 35.3 Bcf
Coal Reserves (12/31/96E): 165 million short tons (Mmst)
Coal Production (1999E): 11.9 Mmst
Coal Consumption (1999E): 5.4 Mmst
Net Coal Exports (1999E): 6.5 Mmst
Electric Generation Capacity (1/1/99E): 5 gigawatts (GW)
Electricity Generation (1999E): 23.0 billion kilowatthours (bkWh)

ENVIRONMENTAL OVERVIEW
Minister of Ministries of Science, Technology and Environment: Nha Tuan Chu
Total Energy Consumption (1999E): 0.6 quadrillion Btu* (0.16% of world total energy consumption)
Energy-Related Carbon Emissions (1999E): 9.8 million metric tons of carbon (0.16% of world total carbon emissions)
Per Capita Energy Consumption (1999E): 7.4 million Btu (vs. U.S. value of 355.8 million Btu)
Per Capita Carbon Emissions (1999E): 0.12 metric tons of carbon (vs. U.S. value of 5.5 metric tons of carbon)
Energy Intensity (1999E): 35,287 Btu/$1990 (vs U.S. value of 12,638 Btu/$1990)**
Carbon Intensity (1999E): 0.6 metric tons of carbon/thousand $1990 (vs U.S. value of 0.19 metric tons/thousand $1990)**
Sectoral Share of Energy Consumption (1998E): Residential (72.2%), Industrial (14.0%), Transportation (10.6%), Commercial (3.2%)
Sectoral Share of Carbon Emissions (1998E): Industrial (38.1%), Transportation (33.5%), Residential (19.6%), Commercial (8.8%)
Fuel Share of Energy Consumption (1999E): Oil (52.2%), Coal (19.9%), Natural Gas (6.3%)
Fuel Share of Carbon Emissions (1999E): Oil (60.4%), Coal (32.4%), Natural Gas (7.1%)
Renewable Energy Consumption (1998E): 1,020 trillion Btu* (5% decrease from 1997)
Status in Climate Change Negotiations: Non-Annex I country under the United Nations Framework Convention on Climate Change (ratified November 16th, 1994). Signatory to the Kyoto Protocol (signed December 3rd, 1998 - not yet ratified).
Major Environmental Issues: logging and slash-and-burn agricultural practices contribute to deforestation and soil degradation; water pollution and overfishing threaten marine life populations; groundwater contamination limits potable water supply; growing urban industrialization and population migration are rapidly degrading environment in Hanoi and Ho Chi Minh City.
Major International Environmental Agreements: A party to Conventions on Biodiversity, Climate Change, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Ozone Layer Protection, Ship Pollution and Wetlands. Has signed, but not ratified, the Nuclear Test Ban.

* The total energy consumption statistic includes petroleum, dry natural gas, coal, net hydro, nuclear, geothermal, solar, wind, wood and waste electric power. The renewable energy consumption statistic is based on International Energy Agency (IEA) data and includes hydropower, solar, wind, tide, geothermal, solid biomass and animal products, biomass gas and liquids, industrial and municipal wastes. Sectoral shares of energy consumption and carbon emissions are also based on IEA data.
**GDP based on EIA International Energy Annual 1999

OIL AND GAS INDUSTRIES
Organization: State-owned PetroVietnam reports directly to the Cabinet. The company was reorganized in 1990 and now oversees the activities of eight subsidiaries that control functions such as administration, exploration and production, marketing (PetroVietnam Processing and Distribution Company (PVPDC)), training, gas production and distribution (Vietgas), petrochemicals, and information collection.
Major Foreign Oil Company Involvement: BP Amoco, ARCO, BHP, CanOxy, Conoco, Enterprise, Fina, Idemitsu, IPL, Japan National Oil, Mitsubishi, Mobil, OMV, Occidental, Pedco, PetroCanada, Petronas Carigali, Statoil, Sumitomo, TotalFina

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Sources for this report include: Asia Pulse; CIA World Factbook 2001; Economist Intelligence Unit ViewsWire; Petroleum Intelligence Weekly; Petroleum Economist; U.S. Energy Information Administration; Vietnam Investment Review, WEFA World Economic Outlook
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http://www.eia.doe.gov/emeu/cabs/vietnam.html

Vietnam Year : 1999

Energy Production (Quads) = 1.0278 Energy Consumption (Quads) = 0.6433

Oil (Thousand Barrels per Day)

Natural Gas (Billion Cubic Feet and Quadrillion Btu)

Coal (Thousand Short Tons and Quadrillion Btu)

Electricity (Million Kilowatts, Billion Kilowatt Hours, and Quadrillion Btu)

Alstom participe à un contrat de 238 millions d'euros pour une centrale au Vietnam
Le groupe Alstom (énergie, transport, ingénierie) a remporté une commande pour une centrale à cycle combiné de 450 MW sur le site de Phu My, dans le sud du Vietnam. Alstom est le leader d'un consortium qui comprend la société japonaise Marubeni et la compagnie Vietnam Machinery Erection. Le contrat clefs en main est d'environ 238 millions d'euros, dont 165 millions d'euros pour Alstom. L'achèvement de cette centrale est prévu pour le printemps 2003.

Les échos - le 14 Juin 2002.

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