Viet Nam has proposed a program of cooperation with Malaysia and Indonesia on exploration and development in disputed territorial waters in the South China Sea and Gulf of Thailand.
The Vietnamese-Malay dispute has been complicated by both countries awarding concessions to different companies covering some of the same acreage in the Gulf of Thailand.
Meanwhile, Thailand and Cambodia have marked progress toward settling a dispute over territorial boundaries in the Gulf of Thailand.
TERRITORIAL DISPUTES
Oil and gas tracts in Indochina are becoming increasingly embroiled in territorial disputes as countries such as Laos, Myanmar, Cambodia, and Viet Nam seek to end years of war, civil strife, and geopolitical isolation and solicit foreign oil company investment in their offshore regions.
Settling the territorial disputes, some of which have been around for decades, will prove no easy task. Even long friendly neighbors such as Thailand and Malaysia have yet to come to terms on licensing arrangements for a disputed area of the Gulf of Thailand after signing a 1990 accord establishing a joint development area (JDA).
And China, which went to war with Viet Nam over a territorial dispute involving the highly petroleum prospective Spratly Islands, recently passed a law seeking to preserve its territorial claims.
The disputes threaten foreign E&D investment in countries that have attracted a flurry of interest recently because they have seen little exploration the past 2-3 decades.
DISPUTED AREA
The Vietnamese-Malay territorial dispute has grown hotter with Viet Nam's award of an exploration contract to Petrofina SA for what Hanoi calls Block 46 in the Gulf of Thailand (see map).
Malaysia awarded Block PM-3, which apparently straddles a disputed boundary fine with Viet Nam, to International Petroleum Corp. (IPC), Vancouver, B.C., in February 1989. Following various farmouts, BHP Holdings (USA) Inc. unit Hamilton Oil Co. became operator and drilled three sizable oil, gas, and condensate discoveries on the block (OGJ, May 20, 1991, p. 39, Sept. 23, 1991, p. 24, and Nov. 25, 1991, p. 34).
Other significant interest owners in addition to IPC 14.1% are Enterprise Oil plc, London, and Norcen Energy Resources Ltd., Calgary. IPC, BHP, and Enterprise also hold concessions off Viet Nam.
IPC estimates reserves potential in the first of the PM-3 strikes, Bunga Orkid, at 200-855 million bbl. IPC contends Bunga Orkid is on trend with Esso Petroleum Malaysia's 1990 1 Larut discovery and cites Petrofina's acquisition of a seismic option on blocks adjoining PM-3 in Vietnamese waters as evidence of the area's strong prospectiveness.
COOPERATION SOUGHT
Singapore's Business Times newspaper quoted Le Dinh Tham, deputy general director for state owned Petrovietnam, as saying Viet Nam wants to cooperate with Malaysia on the territorial issue but offered no details as to the form of that cooperation.
Another disputed tract, which Viet Nam calls Block 8, in the South China Sea has not been awarded by either country. Talks are under way between representatives of both governments, Tham was quoted as saving.
Talks also are under way between Hanoi and Jakarta over Vietnamese-Indonesian territorial disputes in the South China Sea.
Viet Nam has held off awarding some offshore concessions because parts of its outer continental shelf also are claimed by Malaysia, Indonesia, Philippines, Brunei, and China.
That further complicates the outlook for a country suddenly emerging as a potentially sizable crude exporter in the Asia-Pacific region (OGJ, July 15, 1991, p. 25). Hanoi recently had to soften production sharing contract terms seen as too stringent to support foreign E&D investment in a country with few commercial discoveries.
THAILAND-CAMBODIA
Thailand and Cambodia are poised to outline the process for negotiations to resolve boundary disputes in a portion of the Gulf of Thailand thought to hold substantial natural gas resources.
At a meeting in Bangkok last month, Cambodian Vice Minister of Industry Ith Praing proposed to Thai Industry Minister Sippanondha Ketudat that their governments begin talks. It is the first official response from Phnom Penh to the Thai government's efforts to end the two countries' long territorial disputes.
Thailand has suggested it and Cambodia resort to a type of joint development area similar to the one it has with Malaysia.
Praing also invited Petroleum Authority of Thailand to participate in Cambodia's upcoming bidding round for oil and gas concessions.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
