BHP GROUP WINS DAI HUNG PROJECT OFF VIET NAM

A group led by BHP Petroleum Pty. Ltd., Melbourne, plans a $1.5 billion project to develop a giant field off Viet Nam that could catapult that country into the ranks of significant oil exporters.

BHP and Petronas Carigali, upstream operating arm of Malaysia's state petroleum company Petroliam Nasional Shd. Bhd., last month signed a heads of agreement with Petrovietnam, Viet Nam's state oil company; and Vietsovpetro, a Russo-Viet joint venture; to develop Dai Hung (Big Bear) oil field off southern Viet Nam (OGJ, Jan. 4, Newsletter).

Viet Nam's government later will choose a third company or group to participate in the project.

Dai Hung could produce as much as 250,000 b/d by 2000, BHP said. Viet Nam currently produces more than 100,000 b/d of oil, all from a single offshore field, Bach Ho (White Tiger), most of which is exported.

Another field off Viet Nam, Rong, is thought to hold as much as 100 million bbl of oil. All three fields were discovered during the 1980s by Vietsovpetro, a joint venture established by Petrovietnam and an agency of the former U.S.S.R.

County NatWest WoodMac, Edinburgh, in 1991 predicted Viet Nam could produce as much as 500,000 b/d by 2000 from probable field developments and future discoveries (OGJ, Dec. 9, 1991, p. 30). In recent years, Viet Nam has moved aggressively to offer its entire offshore for licensing to foreign companies.

PSC, BIDDING DETAILS

The BHP group's agreement covers a production sharing contract under negotiation, with final signatures expected in March.

The BHP group is one of nine that originally bid for the project last year and later was shortlisted to five groups (OGJ, June 22, 1992, p. 38). Press reports earlier identified Germany's Deminex as part of the BHP-Petronas combine, but there was no explanation for its apparent exclusion from the winning bid or indication about whether it might be named as the undisclosed third participant.

BHP-Petronas won over other bidders that included British Petroleum Co plc, Royal Dutch/Shell Group, and Total, among others.

Under a final PSC, BHP as operator will hold a 43.75% interest in the project, the group or company to be chosen 21.25%, Petronas 20%, and Petrovietnam 15%.

FIELD DETAILS

Vietsovpetro found Dai Hung in 1988, in 115 m of water, about 250 km southeast of Vung Tau.

Two appraisal wells were drilled, one of which was too far downdip and produced water. The discovery well cut a gross hydrocarbon column 200 m thick.

Based on data accumulated so far, BHP believes Dai Hung could hold 400 million to 1 billion bbl of light, sweet crude reserves. Its best current estimate of reserves potential is 800 million bbl. The field also contains an estimated 2-3 tcf of gas, BHP said.

DEVELOPMENT DETAILS

BHP's development plan involves three phases.

The first calls for an early production system involving modification of a semisubmersible drilling rig for service as a floating production unit tied into subsea wells and a buoy loading system for shuttle tankers.

That scheme could place the field on stream at 25,000 b/d within 12 months of final signatures on the PSC.

The second phase involves installation of two platforms to boost productive capacity to 120,000 b/d. The third phase also involves installation of two platforms-one for oil and gas production and another for gas and water reinjection. Production then would build to a peak of about 250,000 b/d in 2000.

Total development would take about 4 years and begin with drilling of eight development wells under the first phase of the project. If Dai Hung reaches its peak, it could be the biggest producing field in Southeast Asia.