On the occasion of the 15th anniversary of the establishment of the Vietnam Association of DK, he gave us a very open and sincere exchange, not avoiding some issues that could be considered "sensitive".
PV: Sir, during your career in oil and gas, which projects are you most proud of?
Dr. Nguyen Quoc Thap: In my career in oil and gas exploration and exploitation, it is difficult to compare which is the best and which is the second best. However, it can be said that there are 3 projects that left good impressions and echoes.
My career in the oil and gas industry is a total of 36 years and 6 months. If the history of the oil and gas industry is 65 years, then I have been involved in the oil and gas industry for more than half of it. Of the 3 projects that left an impression and were very satisfying, the number one project is Bir Seba (Algeria). The second project was in the Nhenhetsky region during the Russian Federation and the third project in the most recent period is Sao Vang Dai Nguyet.
First of all, we have to remember the project in Algeria because this is the first foreign investment project that we (Vietnam/ Petrovietnam ) are the operator of. The press has written a lot about this project and I remember in 2013, New Energy Newspaper had a 3-part report “Finding oil in the desert of fire” and won a high prize at the National Press Award.
In the Sahara desert, the road to the mine is called a sports road. People scrape sand, pour plaster and compact it, it is called a hard road. After each sandstorm, the road can be completely covered, but people scrape away the sand and the road is still usable. In the snowy areas, they take advantage of the snow and ice to make roads. Even though these are two very different and opposite areas, the oil and gas people still adapt to each condition and each circumstance.
Regarding the Nhenhetsky project, the Exploitation License granted by the Government of the Russian Federation and the Contract for Establishment of the Rusvietpetro Joint Venture Company by Petrovietnam and Zarubesneft officially took effect on July 7, 2008. After an urgent process from design, procurement of equipment and materials, construction and drilling of development wells until September 2010, the Project welcomed the first oil flow witnessed by the two participating parties.
Our thinking was that from the time of signing the EPCI Contract, we would have the first line after 24 months. That was the logic of that time. My colleagues who reported to me all thought that the other side had “reported incorrectly” and could not do it. However, each side had a different approach or worked differently. When working directly with the partner, I completely trusted and convinced my own team because of their high professionalism and they reached the finish line to the surprise of our own staff and engineers.
I was quite lucky to be able to participate in a project in the hottest place in Bir Seba in the Sahara desert, and then in the coldest project in Nenhetxky.
PV: In your opinion, why did Russia allow you to do this joint venture? And it seems that this is the only project that Russia allows to do a joint venture with a foreign country on Russian soil?
Dr. Nguyen Quoc Thap: That issue is due to the behavior of the two countries. According to the Intergovernmental Agreement, Block 09.1 ended in 2010. At that time, the Russian partner wanted to extend it. The Vietnamese side was 50-50, meaning half supported the extension, half did not support it. And then, based on the proposal from Petrovietnam, the Government agreed. The Vietnamese Government raised the issue with the Russian side that the Government could consider extending it in Vietnam, if the Russian side agreed to establish a similar Joint Venture in Russia on the principle of symmetry. This proposal was supported and agreed by the Russian Government. And that is why the Rusvietpetro Joint Venture was born. However, the form of operation is different. That is, Vietsovpetro operates under the Intergovernmental Agreement. Rusvietpetro works and operates according to the following mechanism: two parties establish a company to sign and receive a license to explore and exploit oil and gas in a mine granted by the Russian Federation Government, almost by appointment.
Thus, Russia and Vietnam have entered into a joint venture to carry out this project in the Russian Federation due to the extension of the Intergovernmental Agreement and the extension of the Vietnam-Russia oil and gas joint venture in Vietnam. These are very successful negotiations and discussions between the two sides, and these are very valuable experiences in cooperation and investment. It must be said that the generations of leaders of Petrovietnam and the Government are very wise and have put forward conditions and constraints for the extension, as well as plans for implementing the expansion and new establishment.
At that time, I was the Deputy General Director of the Group, in charge of overseas projects. With the Nhenhetxky Project, Petrovietnam directly invested.
PV: Could you tell us how much money the Nhenhetxky Project has paid so far? And is this the project that brings in the highest profit?
Dr. Nguyen Quoc Thap: According to Petrovietnam's report, by the end of 2024, the total amount of money transferred back to the country from the Project will be more than 3 times the contribution of the Vietnamese side for investment, which is 533 million USD. Somewhere around 2016, the Vietnamese side has recovered all the capital. And from then on, it is completely the profit earned from the project. It is expected that by 2030, the Vietnamese side will continue to receive about 2 billion USD with the assumption that the oil price is about 70 USD/barrel.
If we calculate the ratio of profit to capital invested, the Nhenhetxky Project can be called very profitable. But Vietsovpetro may have a higher figure. The project in Algeria is currently still recovering capital.
PV: What about the Sao Vang Dai Nguyet Project, what do you think about this project?
Dr. Nguyen Quoc Thap: The Sao Vang Dai Nguyet project had many bottlenecks during its implementation that needed to be resolved and cleared. Looking back now, we can see that the decision to implement the project was very timely. If it had been delayed, the project would have been difficult to realize due to sensitive factors in the East Sea.
This project, I do not call it a joint venture project but a contractor consortium project. The two Japanese partners are Idemitsu Kosan and Teikoku Oil.
They signed the oil and gas contract, and Vietnam has the right to participate in the project when the project is announced to be commercial. We participate as part of the host country's management, the party that signed the oil and gas contract with the consortium; secondly, we have the right to participate in the project when it is announced to be commercial at 20%.
The project has several important points. The first is the final gas price milestone, the second is the time to approve the development plan. The project was implemented in the context of many contractors, including Vietsovpetro, PVEP, Petrovietnam, PV GAS. And the project suffered the entire Covid-19 period but was completed on schedule at the end of 2020. And if we had not implemented the project at that time, a little later, it would have been difficult for everything to become a reality.
PV: Are there any difficulties in implementing this project, sir?
Dr. Nguyen Quoc Thap: Each step of the project implementation, from the base to the topside installation, is a step to consider whether there will be any obstructions. Then, connecting the pipeline and infrastructure of Vietsovpetro at Thien Ung field, PVEP has Dai Hung field, and PV GAS's Nam Con Son 2 pipeline connects. A series of tasks were implemented at the time of Covid-19.
| The Vietnam Oil and Gas Association is and will continue to adhere to the motto: "Connection - Intelligence - Development", the Resolution of the 4th Congress (2022-2027), the entire working program, associated with the requirements of society and reality to propose specific and practical work content, contributing to promoting the strong development of the Oil and Gas industry. The 15-year milestone of building and developing the Vietnam Oil and Gas Association is an opportunity to look back on the past, evaluate the achievements, and at the same time draw lessons to bring the Association's activities into a new phase, expecting to improve the quality of all areas of operation, gradually reaching new heights. |
This project is also difficult to implement when there are many partners. The working habits, standards, and regulations of Vietsovpetro are one type, and Idemitsu is another type. I am in charge of how to make the project run.
When implementing with Idemitsu, I set a condition that they must do this and that. If the investment arises, the Vietnamese side supports and agrees to include it in the project costs and they will be reimbursed. Because if it is clear, they will not accept some costs, such as “hitchhiking” costs. But because there are two “hitchhiking” units, PVEP from Dai Hung gas and Thien Ung from Vietsovpetro, so costs must arise.
At that time, our side had to be flexible. We proposed that they need to agree to be included in the project cost and be recovered. And basically, this more or less affected the partner's profit, but once they were recovered and the progress of the Project, they accepted Petrovietnam's requests.
Our partners also “know themselves and others”, they also understand and share our approach and our approach is correct. In cases like this, if we are not polite enough, not willing enough, not experienced enough, it is difficult to reach a negotiated agreement.
Currently, this project has been and is being implemented very successfully. All the overall parameters of the project are better than expected when it was implemented. That is, the amount of condensate obtained from the project is higher than expected. And the price of crude oil and condensate since it was put into operation is now higher than in the previous construction scenario. That is why the Sao Vang mine alone has recovered all the capital.
Recently, the partner has invested more in Sao Vang mine. I think they will recover that additional investment in the near future.
PV: Could you tell us more about the element of luck in exploration?
Dr. Nguyen Quoc Thap: The exploration profession is a profession that contains too many risks. And if you encounter risks, you will definitely lose a lot of money. Foreign oil and gas companies have also lost in Vietnam, perhaps up to nearly 14 billion USD... But when you start exploiting oil and gas, you have to accept the risks.
However, in the search and exploration stage, there must be people with a “lucky hand” or “good fate”. Here, let’s just say it for easy visualization, like opening a pho restaurant, not everyone who opens a restaurant will have a lot of customers. In the oil and gas industry, there are many cases and situations like that. Some projects are not successful, not because their qualifications are poor, but because they are unlucky or not a lucky person.
PV: Thank you for this extremely interesting conversation. I wish you good health and continued intellectual contributions to the development of Petrovietnam!
Outstanding experts - intellectuals - scientists As an officer with expertise in geophysics, mining geology and exploitation and many years of experience participating in foreign projects, throughout his career up to now, Dr. Nguyen Quoc Thap has been assigned to participate in implementing, directing and managing Petrovietnam's oil and gas exploration and exploitation investment projects, managing and monitoring activities at domestic oil and gas contract blocks; directly directing key units of the industry, such as: Vietsovpetro Joint Venture, Rusvietpetro, Oil and Gas Exploration and Production Corporation (PVEP), Vietnam Gas Corporation - Joint Stock Company (PV GAS), Oil and Gas Drilling and Drilling Services Joint Stock Corporation (PV Drilling)... In his position, Dr. Nguyen Quoc Thap also directed the development of relationships with national oil and gas companies in countries with investment projects to maximize capacity, understanding of investment locations, advantages of the host country... to successfully implement projects; established long-term relationships with corporations such as Total (France), ExxonMobil (USA), PTT (Thailand), Salamander (UK), Petrofac (USA)... to take advantage of technological level, financial potential, management and operation experience, and with these partners to participate in investing in oil and gas projects in third countries, creating consortia to jointly carry out oil and gas exploration and exploitation. In the field of science and technology (S&T), Dr. Nguyen Quoc Thap has directed relevant departments of the Group and the Vietnam Petroleum Institute to promote S&T research and development, as a foundation for the Group's development acceleration strategy, with development in both breadth and depth, including enhancing the research capacity of leading experts, strengthening international coordination and integration, gradually enhancing the reputation and image of a number of S&T units in the industry, forming a team of experts and qualified scientific research personnel, capable of applying many advanced technologies and techniques of the world, which have been recognized by international friends and sent to conduct research and cooperation... With the topic "Application of advanced scientific and technological solutions to research, discover new oil and gas reservoirs and improve the exploitation efficiency of Dai Hung field, Block 05-1a Nam Con Son Basin, Vietnam's continental shelf", Dr. Nguyen Quoc Thap directed and participated with the PVEP research team to conduct a comprehensive economic and technical study to serve as a basis for selecting the optimal development plan for the field after the output of new wells has decreased, maintaining the future development of Dai Hung field. With his achievements, Dr. Nguyen Quoc Thap has made positive contributions to the construction and development of the Oil and Gas industry in general and Petrovietnam in particular. In recognition of these contributions, Dr. Nguyen Quoc Thap has been awarded the Emulation Fighter title by Petrovietnam for many consecutive years, the Emulation Fighter title by the Ministry of Industry and Trade and a Certificate of Merit, and the Ho Chi Minh Prize for Science and Technology and the Second Class Labor Medal by the President. |
Nguyen Nhu Phong
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