Oil in Vietnam

Oil Production17.4million tonnes per year

Oil Recoverable Reserves595million tonnes

During the first half of the 1980s oil was discovered offshore in three fields (Bach Ho, Rong and Dai Hung), and further discoveries have since been made.

Published estimates of Vietnam’s oil reserves vary widely. Oil & Gas Journal  assumes entirely different figures compared to other assessments, quoting only 600 million barrels, which implies the very low R/P ratio of 5.5.  

Production of crude oil began in 1986 and rose steadily until 2004, but subsequently has fallen to only about 300 000 b/d, all of which is presently exported. Output of NGLs is of minor proportions, at around 15 000 b/d. According to Oil & Gas Journal (OGJ), Vietnam now ranks third in terms of proven oil reserves for the Asia-Pacific region. Vietnam held 4.4 billion barrels of proven oil reserves as of January 2012, which was significantly higher than 0.6 billion barrels of oil in 2011. This increase is in part a result of Vietnam’s efforts to intensify exploration and development of its offshore fields. Ongoing exploration activities could increase this figure in the future, as Vietnam’s waters remain relatively underexplored.

Vietnam’s oil production increased steadily until 2004, when it peaked above 400,000 barrels per day (bbl/d). Since 2004, oil production has slowly declined, reaching an estimated 326,000 bbl/d in 2011. EIA forecasts that the country’s oil production will rise by around 50,000 bbl/d within the next 2 years, based on several smaller fields anticipated to come online by 2015. These fields should offset declining production from mature basins, but Vietnam must accelerate exploration efforts to maintain current production levels in the longer term. A fraction of Vietnam’s oil production, almost 20 bbl/d in 2011, is in the form of natural gas liquids (NGLs).

In 2010, Vietnam consumed 320,000 bbl/d of oil, and EIA estimates demand to increase to more than 400,000 bbl/d in 2013, reflecting the economic growth and industrial developments within Southeast Asia. EIA estimates consumption surpassed production in 2011.  

One of the most active areas for ongoing exploration and production activities in Vietnam is the offshore Cuu Long Basin. Vietnam’s oil production has decreased over the last seven years primarily as a result of declining output at the Bach Ho (White Tiger) field, which accounts for about half of the country’s crude oil production. After reaching peak output of 263,000 bbl/d in 2003, the field’s production dropped to an average 92,000 bbl/d in early 2011. It is expected that Bach Ho’s production decline rate will range from 20,000 bbl/d to  25,000 bbl/d through 2014. Vietsovpetro intends to boost oil production by using water injection to stem declines of aging fields and by investing USD7 billion on exploration activities over the next five years.

Vietnam is currently a net exporter of crude oil but remains a net importer of oil products. According to EIA, oil demand has nearly doubled in the past decade from 175,000 bbl/d in 2000 to an estimated 320,000 bbl/d in 2010. Vietnam still needs to import about 70 percent of refined products and petrochemicals since the output from the Dung Quat refinery does not satisfy domestic demand. As more refineries are scheduled to come online, PetroVietnam anticipates meeting 50 to 60 percent of the domestic product demand by 2015. FACTS Global Energy forecasts that domestic petroleum product demand will more than double by 2030 to nearly over 830,000 bbl/d from around 375,000 bbl/d in 2011. The transportation sector, which uses gasoline, diesel, jet fuel, and fuel oil for rail, drives about 60 percent of petroleum product demand. The remaining oil product demand originates from liquefied petroleum gas (LPG) use in the residential sector and small amounts of products used in the industrial and power sectors.

Note

Oil data represents Crude Oil only, for extra-heavy oil and oil shale please refer to the WER 2013 report oil chapter.