Vietnam Assets

As I read it we have a very clear factual statement telling us that, with minor (non-material) variations against prognosis, the drilling campaign is confirming the extent of the oil in place, with additional upside of thicker pay in the central area.

Confirmation of August for first oil is welcome.

TGT is the reason I'm happy to maintain my (for me) very significant stake in SIA and this RNS confirms the value building process is in compliance with expectations.

fuiseog

Yep nice steady as she goes statement from Soco not that the market particularly cares - up inline with the FTSE 250 today by the looks of it. I think when production starts in August if the price of oil is anywhwere near $100 then surely a lot of people will sit up and take notice. 55K/bpd is not to be sniffed at at these prices especially given the cost recovery kick back Soco have in the early stages of production.

Log

Chinese whispers...

http://www.thisislondon.co.uk/markets/article-23928478-chinese-whispers-over-soco-as-ftse-breaks-losing-streak.do

regurge of old story no doubt. I sometimes think these journos just notice that the price has moved and then just reprint an old story. The rise was more likely due to the whole market being strong coupled with some encouraging development news on TGT.

Not that I particularlyl care why the price went up but I doubt it was on bid whispers.

Log

Just in case anyone spots this and starts to fret :-

http://www.docstoc.com/docs/63415916/05_2010_6
Circular guiding implementation of Decree 100-2009-ND-CP of the Government dated 3 November 2009 on collection of a surcharge from petroleum contractors on their share of profit oil when crude oil prices increase

Article 9:2 indicates the 30% surcharge does not apply to contracts signed before Jan 1 2010. Government business conducted with the utmost propriety if I may say so. I guess this surcharge may have been in the Trade Ministry’s mind when they recommended refusal to extend the TGD licence. If Soco actually manages to secure the extension, and the signs are not bad, that’ll be a valuable asset in the VN portfolio even if they sell it on in a wider sale without further drilling. Somebody somewhere is bound to want to drill TGD again and without doubt, drilling with the established contract terms is going to be a damned sight more attractive. Fingers crossed Soco pull it off.

Interesting PV Journal from 2009 (slow d/load)analysing the Cuu Long Miocene (second article) demonstrates how advanced their knowledge is in the Basin. Note TGT Porosity 18-20% with high NTG.
http://www.vpi.pvn.vn/download_documents/rjc1259203332.pdf

TGT First Oil !

NS Number : 7665M

Soco International PLC

22 August 2011

 



SOCO International plc

('SOCO' or 'the Company')

 

TGT Field Produces First Oil

 

SOCO is pleased to announce the first flow of crude oil and wet gas from the Te Giac Trang Field ('TGT'), which occurred at 0655 local time in Vietnam today. The block is operated on behalf of SOCO and its Partners, PetroVietnam and PTT Exploration and Production Public Company Limited, by the Hoang Long Joint Operating Company ('HLJOC'), which was established in 1999.

 

The TGT Field, discovered in August 2005, was approved for the initial development by the Government of Vietnam in September 2009. The development is comprised of a Floating, Production, Storage and Offloading vessel ('FPSO'), two Well Head Platforms (H1 and H4 areas), and a subsea pipeline system to transport hydrocarbons, gas export, gas lift and water for injection.

 

Crude oil from the TGT Field is transported via a subsea pipeline system to the FPSO 'Armada TGT 1', which has a name plate processing capacity of 55,000 barrels of oil per day ('BOPD'), where it is processed, stored and exported via tankers to regional oil refineries. Gas will be transported through a pipeline to the nearby Bach Ho Facilities for processing and transportation to shore via the existing pipeline infrastructure for further distribution to meet domestic demand. TGT oil output is expected to plateau at approximately 55,000 BOPD and gas production will be approximately 30 million cubic feet per day.

 

The development of the TGT Field marks a successful investment co-operation milestone in the Vietnam oil and gas industry with the delivery of production within two years of approval.

 

In addition to starting first production from the TGT Field H1 area, HLJOC continues drilling production wells in the H4 area of the TGT Field and fabricating Platform Topsides in preparation for its petroleum production start-up in August 2012.

 

 

Ed Story, President and Chief Executive of SOCO, commented:

'We are very pleased to announce first oil from the TGT Field in Vietnam, a key milestone for the Company demonstrating our ability to see our exploration successes through to the production stage. The project always had an ambitious delivery target and we are pleased to have achieved this.

 

Our strong partnerships have allowed this significant event at the TGT Field to be realised and we now look forward to targeting further exploration and development success, both in Vietnam and in Africa.'

 

22 August 2011

R

Market reaction to 55000bod production (although it doesn't quite say that would have been nice to get a production rate but I guess it is early days) is pretty muted!

Let's hope they can put it on the block and get a good price for it now.

In reply to loglorry, post #113

Hi,

They've only been producing for 14 hours - bit early to start talking about production rates I would have thought. :-)

StepOne

Interesting price actions to good news.

No real surprise there's been no reaction.

I think this will do an autonomy.

i.e. one day we'll wake up with a very nice surprise.

I have the champagne on ice waiting.

In reply to nigelpm, post #116

No real surprise there's been no reaction.

Nope - not as if it was unexpected. Just glad theres been no technical hitches...

I think this will do an autonomy.

i.e. one day we'll wake up with a very nice surprise.

Yep - me too, which is why weve been upping our exposure to SIA recently (Friday saw us execute a CEO to SIA switch. Both good companies but cant help but feel that maybe somethign will disappoint at CEO (see SLG etc) whereas SIA just looks bizarrely priced.

I have the champagne on ice waiting.

As do I (still have some on ice from waiting for Falcon...... hope thats not a bad sign.....)

http://www.pttep.com/en/newsDetail.aspx?ContentID=364
PTTEP, said that the production of crude oil from Te Giac Trang Field of Vietnam 16-1 Project commenced on 22 August 2011 with the initial rate of approximately 15,000 barrels per day (bpd). The production from the field is expected to reach approximately 40,000 bpd of crude oil and 30 million cubic feet per day of natural gas by the end of this year.

So they think 45,000 boepd then!

In reply to davjo, post #118

So they think 45,000 boepd then!

Early days - far too early to reach any definitive conclusions. They will bring the wells on slowly at varying rates, take bottom hole pressures, etc as they ramp up.  Not only are they collecting lots of data from the wells that indicate eventual production, but also from the FPSO as it is a new build.

AIUI they intend to test the maximum capacity of the FPSO before year-end. The rated capacity is 55,000 bopd (gas is on top, AIUI), but the actual operating capacity might be as much as 15% higher. They will only know by testing it. And, when that has been done and all the data examined, only then will they decide how much to try to produce and how........so the stabilised production rate might be anywhere between about 45,000 boepd and 65,000 boepd, depending on the data they collect over the coming months.

Perhaps there will be more clarification on the production outlook with the results tomorrow, though it may be too early for much more light to be shed on potential. I'll have to leave you and others to analyse the tea-leaves....I'm otherwise engaged again, as the mystery of E&P diary coordinations means I'm tied up all day!  ;-)

ee

So they think 45,000 boepd then!

yes, ok early days, but I've never seen this 45k figure quoted before, always 55k, and at the agm the posibility of more, so strange to see, just after the start of production a lower figure quoted, especially if it's too early to tell,

K

Is PTTEP's position on this the official line from the joint operating company, or their own take on the production data so far (2 days in)?

ET

In reply to ExTownie, post #121

Is PTTEP's position on this the official line from the joint operating company, or their own take on the production data so far (2 days in)?

I would put a great deal of money on it being neither of those - and being just their own (conservative) guesstimate based on nothing more than a finger in the air.

At the moment people can make whatever guesses they like - but they are likely to be wrong until the capacity of the wells and the FPSO have been properly tested over the next couple of months or so. Until then it is a complete and utter waste of time to be arguing the toss.

No doubt SOCO will come up with a different guess tomorrow - but it'll still be a guess.

ee

In reply to emptyend, post #119

Early days - far too early to reach any definitive conclusions

Indeed, but we’re at the projections stage and PTTEP is clearly advising more cautious numbers than SOCO. It could be of course that PTTEP are merely reciting the original numbers conceived during the development plan, since revised upwards according to SOCO. I also imagine PV will require a cautious build up as is their usual practice to ensure over-production does not damage future performance. Clearly, it will be some time before sustainable levels of production become known. I’d have thought also, since both PV and PTTEP are being cautious, potential purchasers would be too, hence that doesn’t seem to suggest an early divestment.

As you say though, there could be more enlightenment in the interims tomorrow.

OUTLOOK

TGT production has just begun and the ramp up to plateau production is expected to take a number of weeks.  During this period, it would not be unusual to experience some unexpected issues that would normally be associated with any start-up of a project of this size.

  

However, the Company's transition from one of limited production to expectations of substantial production bodes well for the future to support its exploration led strategy.  Whilst the upcoming exploration programme offshore Congo (Brazzaville) offers significant upside potential, it will be modest in terms of overall capital expenditure and activity when compared with past exploration programmes and those expected in the future. 

 

We expect to commence drilling TGT Phase II development wells in September, with planned production to commence in the summer of 2012.  Once there is a reasonable history of production performance on Phase I and some subsurface confirmation from Phase II, we anticipate revisiting the reserve numbers.

 

In the meantime, the Company looks to increase its exploration portfolio by focusing on expanding its footprint in areas where it can apply its significant technical experience and knowledge.

Sounds like Soco's very much OPEN for Business.......far from being taken over...

http://www.investegate.co.uk/Article.aspx?id=201108240700109135M

I wouldn`t want it any other way. After all, they are not forced sellers.

If they cant return cash to me for me to take advantage of current knock-down prices surely SIA spending my money on bargains is the next best thing? They might well do a better job of it than me anyway.....

The sale will come when someone decides to pay enough for the asset. We cant do much but wait and see when that is.

Leek

Hi leek,

Agree your take !

As to 'the asset', it looks as though we'll have to wait for some prod'n history at Ph. 1 TGT and some exploratory drilling at Ph 2 TGT before we/any buyer (?) will know WHAT the asset is.......

ATB