The signing of the KPA to extend the PSC of Block PM3 CAA for another 20 years is a specific and strong affirmation of the strong, effective and constantly developing relationship between Petrovietnam - Petronas.

In the development journey of Vietnam’s oil and gas industry, there have been cooperation milestones that have become symbols of strategic, effective and sustainable ties between national oil and gas corporations in the region. The cooperation over the past 3 decades between Petrovietnam and the Malaysian National Oil and Gas Group (Petronas) is one such relationship.

Block PM3 CAA is one of the iconic oil and gas projects in terms of regional cooperation in the Southeast Asian energy sector. The project is located in the overlapping area between Vietnam and Malaysia, where the two governments have established a special coordination mechanism based on the principle of equitable sharing and joint exploitation of common resources.

The Production Sharing Contract (PSC) for Block PM3 CAA was signed on February 16, 1989, based on the Commercial Agreement between the two countries. By 1992, oil and gas activities in this area were officially deployed with the participation of contractors.

The close coordination between contractors, especially between Petrovietnam and Petronas, not only ensures the efficient exploitation of resources, but also builds an exemplary model of cross-border cooperation. In particular, Block PM3 CAA has provided a stable gas source for the Ca Mau Gas - Power - Fertilizer Industrial Complex, one of the national key energy projects. The project not only makes an important contribution to the energy security of the Southwest region, but also contributes to the formation of a complete industrial ecosystem, from gas exploitation to electricity and fertilizer production.

The success of PM3 CAA is also reflected in its ability to flexibly coordinate seasonal gas volumes, optimize production output, and limit surplus or shortage, especially during peak production periods. In addition, the project's effectiveness has created favorable conditions for Petrovietnam and Petronas to share experience, techniques, and operating procedures for offshore gas exploitation and processing platforms, thereby improving localization capacity and developing high-quality human resources for the Vietnamese oil and gas industry.

While Block PM3 CAA was the initial foundation for cooperation between Petrovietnam and Petronas, in recent years, this relationship has been continuously consolidated and expanded, developing comprehensively and covering the entire oil and gas value chain, beyond the scope of traditional exploitation. In the upstream sector, Petronas Carigali has been participating in many other Production Sharing Contracts (PSCs) in Vietnam, besides Block PM3 CAA, such as Block 46/02, Block 01 & 02, as an investor with financial capacity, international operating experience and modern technology. Petronas has also been present in the exploration phase in a number of other blocks such as Ham Rong - Thai Binh area and Block 102-106, demonstrating its long-term interest in the Vietnamese oil and gas market.

Petronas is currently one of the world's largest LNG suppliers with an output of more than 33 million tons/year , a global network of partners and a modern liquefied gas ecosystem. Meanwhile, Vietnam is stepping up investment in LNG power projects such as Nhon Trach 3-4, Long An 1-2, Bac Lieu..., opening up great opportunities for the two sides to cooperate under medium- and long-term contracts, both ensuring energy security and controlling costs in the context of volatile global gas markets.

Not only stopping at the commercial aspect, Petronas also actively shares its experience in building gas infrastructure, floating and fixed LNG ports, as well as operational risk management methods, thereby contributing to helping Petrovietnam quickly complete the nascent gas - LNG value chain.

In the context of the global energy transition taking place strongly, both Petrovietnam and Petronas have identified the need to reposition their development strategies to adapt and stay ahead of the trend. That spirit was concretized by the two sides exchanging a Memorandum of Understanding on cooperation on renewable energy, within the framework of the official visit of the General Secretary of Vietnam to Malaysia - an event marking the official upgrading of the relationship between the two countries to a Comprehensive Strategic Partnership after more than 50 years of establishing diplomatic relations.

Based on the MoC in November 2023, Petrovietnam and Petronas have expanded their cooperation to areas such as wind energy, solar energy, carbon capture and storage (CCS), hydrogen production and CO2 emission reduction technology. Petrovietnam currently targets net zero emissions by 2050, in line with international commitments at COP26 and COP28, and to achieve this goal, it needs technology, investment capital and implementation models from strategic partners such as Petronas.

Petronas, with its advantage as one of the world's leading national energy corporations, with experience in transforming its model from traditional oil and gas to clean energy development, has become an ideal reference partner in Petrovietnam's transformation process. Not only that, the two sides also share the same view on energy security, considering it a key factor in ensuring socio-economic stability in the post-fossil fuel era. Therefore, the two corporations are actively promoting the establishment of regional cooperation alliances, technology joint ventures and green investment funds.

The vision and strategic partnership between Petrovietnam and Petronas is not only limited to bilateral scope, but also expanding to regional cooperation initiatives, such as promoting connectivity between national oil and gas corporations in ASEAN (PTT – Thailand, Pertamina – Indonesia), through sharing technical experience, coordinating to build green financial models and aiming at cooperation in developing LNG infrastructure, renewable energy and carbon storage. These are practical efforts to contribute to accelerating the sustainable energy transition process of the entire Southeast Asia region.

Not only is it a normal mining contract, it is also a legal and technical foundation for both parties to continue implementing investment and mine development activities, ensuring the optimization of resource value and enhancing the effectiveness of joint venture cooperation.

Petrovietnam and Petronas, from the early days of being companions in exploiting offshore resources, have now become comprehensive strategic partners, together creating a new energy future for the region. More than 30 years of cooperation is a testament to trust, respect and mutual development – core values that will continue to shape the bilateral relationship in the coming decades, not only for bilateral benefits, but also for a strong, connected and sustainable Southeast Asian energy sector./.

Truc Lam - Thanh Linh

Source: https://www.pvn.vn/magazine-petrovietnam-petronas-su-gan-bo-chien-luoc-hieu-qua-va-ben-vung-28188