WATCHING THE WORLD IRONY IN RETURN TO VIET NAM

Mobil Oil Corp. has returned to Viet Nam after an absence of 18 years.

The company exhibited its technology Oct. 14 at an oil industry conference in Ho Chi Minh City.

Mobil also was there to display its credentials, backing up a bid for a production sharing contract on the Blue Dragon prospect.

Mobil's visit was tinged with irony.

As Ho Chi Minh City, then Saigon, fell to the Viet Cong in 1975, Mobil was drilling the discovery well for Dai Hung (Big Bear) field. With Mobil gone, early appraisal of Dai Hung fell to the Soviet/Vietnamese joint venture Vietsovpetro.

Proved and probable reserves in Dai Hung field are quoted by Wood Mackenzie Consultants Ltd., Edinburgh, as 400 million bbl of liquids and 1 tcf of gas.

Dai Hung development was awarded under operatorship of BHP Petroleum Pty. Ltd. in December 1992. BHP is completing delineation of the field. Start of production is slated for first quarter 1994 at about 30,000 b/d of oil.

OVERHYPED?

As Mobil waits for the U.S trade embargo on Viet Nam to be completely lifted, there is talk of Viet Nam's potential being overhyped.

Reporting on the Ho Chi Minh City exhibition, London's Financial Times said delegates from other companies were saying the potential for oil production in Viet Nam has been greatly exaggerated. Unless more evidence of major reserves emerges soon, they said, it is unlikely Viet Nam will ever fulfill its promise.

Only one oil field is on production off Viet Nam. Bach Ho field, operated by Vietsovpetro in Block 16, is yielding about 90,000 b/d of oil from reserves estimated at 200-300 million bbl, Wood Mackenzie said.

TOO EARLY

The only other oil discovery under development is Rong (Dragon) field on Vietsovpetro's Block 16. Wood Mackenzie estimates Rong reserves at 50-100 million bbl of oil. First production from Rong is expected in 1995.

The Blue Dragon prospect sought by Mobil lies on Block 5-1 immediately east of Dai Hung (see map, OGJ, July 12, p. 33). Wood Mackenzie said the prospect is undrilled but reputed to be structurally of similar size to Dai Hung.

Simon Frame, Wood Mackenzie analyst, said it is too early to write off Viet Nam's potential, although no commercial discoveries have been made on acreage awarded since Viet Nam reopened its doors in 1987.

"Companies are working on the principle that if a couple of 300-400 million bbl fields have been discovered, more oil can be expected," Frame said.

"Recent licenses cover a big area, and only 25-30 wells have been drilled to date. Fifty wells were drilled in the North Sea before a substantial discovery was made."