Rosneft has installed a new drilling platform in the waters of the South China Sea in the Lan Do gas field. The Russian company has been extracting gas in Vietnam for 16 years, but now, for the first time, it acts as an operator of an international offshore drilling project. The field has 23 billion cubic meters of natural gas reserves.
Mariya Kudryavtseva reports on the company's timeframe for receiving the first batch of gas and investigating new prospects for cooperation between the two countries in the energy sector.
This is an extraordinary flight; the destination — the Lan Do gas field off Vietnam's coast in the South China Sea. The new platform has been here for one week; it was towed here from the Russian Far East in order for Rosneft to begin drilling at a new production well. For starters, the drill reaches a sea depth of about 525 feet, then the drilling of the well begins with the target depth of about 4,000 feet. The entire process will take about 45 days; as estimated, the Lan Do field has initial gas reserves of 23 billion cubic meters. A special machine will be submerged along with the drilling rig in order to constantly monitor the process. Additionally, a blowout preventer will immediately react and stop the gas flow in case of an accident. Rescue vessels stand by the platform 24/7. Rosneft hasn't had any accidents during 16 years of drilling off the coast of Vietnam.
Chris Gordon, Rosneft Vietnam Senior Manager: "We've been preparing for drilling for two years: we've created the well's design, built infrastructure and now, our team's task is to drill and install a control system".
Once the drilling has been completed, industrial development of Lan Do's field deposits will begin. Processed gas will be delivered along a submerged pipeline to the nearby Lan Tai field, from which the wells are being remotely controlled.
Hoang Vu Nam, Director of Block 06.1.: "Now, the platform has the capacity to produce about 10 million cubic meters of gas per day and about 3,000 cubic meters of condensate".
Both gas fields — the Lan Tai and the Lan Do are located within Block 06.1. The Wild Orchid gas field is also located there. This gas field was discovered in 2016 and the plan is to start drilling this year. The entire Block 06.1 has initial gas reserves of about 70 billion cubic meters. The work of each platform is monitored from these network operations centers; for example, this facility has 16 cameras.
Hoang Vu Nam: "From here we can control all the processes and monitor the state of equipment which allows us to prevent possible accidents".
Over 53 billion cubic meters of gas have been produced off the shore of Vietnam. The Lan Tai gas field has 5 wells; there are 50 employees working here. Apart from equipment and pipes, the platform has bird cages, an aquarium, and even its own garden.
Processed gas and condensate are delivered from Block 06.1 to the onshore terminal by the Nam Con Son pipeline, which is 230 miles long. It's the longest pipeline in Southeast Asia. The area of this onshore terminal is 155 acres; gas and condensate are delivered here from the platform. Experts say that production offshore Vietnam is one of Rosneft's most profitable projects. By using oil equivalents, the cost of gas production is about 1.5 dollars per barrel. For comparison, the cost of offshore gas production in the Persian Gulf is about 2 dollars per barrel. Another advantage of Vietnam is the savings on transportation: The entire volume of offshore gas goes to the domestic market; now, Rosneft has a share of 9 percent here.
Hoan Ming, Director General at Nam Con Son Pipeline: "Gas and condensate are delivered to the onshore facility by this two-phase pipeline. Gas is used for the production of electricity and condensate is exported in order to produce motor fuel".
Currently, these three gas fields are the only international offshore drilling projects operated by Rosneft throughout the production phase. In the future, this experience will allow development of successful offshore projects in other countries.
Mervyn Goddings, Director for Offshore Production: "We will start producing gas from the new well in October. The advantage of Vietnam is that this country can consume everything we produce. As far as technological sanctions go, we just need a bit more strategic approach regarding how and where we make purchases. There are plenty of opportunities in this regard".
Meanwhile, the supply vessels line up at the dock of the supply base. 2-3 ships per week leave here during drilling days.
Nguen Hong Toan, Senior Manager: "The loads are various: cement, pipes, equipment and more. The lightest ships carry about 1,000 tons of cargo; A ship needs 20-24 hours to get from here to the platform".
Rosneft's bet on the Vietnamese market is easy to explain: in 2017, the country's economy grew by almost 7 percent; some American investment funds have already named Hanoi "a Tiger Cub economy". Based on forecasts, it could overtake Beijing in terms of GDP growth within the next three years. The consumption of hydrocarbons has been increasing by 10 percent per year on average and the number of cars and motorcycles in Vietnam has doubled in the last 10 years. Additionally, Hanoi could become Rosneft's platform for developing business in other countries of Southeast Asia.
Mariya Kudryavtseva, Aleksey Kalach, Vesti from Vietnam.
