Today in Hanoi, in the course of the official visit by Russian President Dmitry Medvedev to the Socialist Republic of Vietnam, a working meeting was held between Alexey Miller, Chairman of the Gazprom Management Committee and Phung Dinh Thuc, Director General of Petrovietnam, Vietnam National Oil and Gas Group.

The parties highly appreciated the performance results of Vietgazprom Joint Operating Company in developing Vietnam’s continental shelf. Among the issues addressed was the bilateral cooperation in the energy sector, including potential involvement of the Vietnamese side in the Eastern Gas Program.

Background:

On September 11, 2000 Gazprom and Petrovietnam signed the Contract to prospect for, explore, produce and market hydrocarbons at Block 112 of Vietnam’s continental shelf under the Product Sharing Agreement (PSA) terms. Geological exploration resulted in the discovery of the Bao Vang gas and condensate field in 2007.

In order to implement the Contract, Gazprom and Petrovietnam established Vietgazprom Joint Operating Company, which is currently performing geological exploration on the continental shelf of the Socialist Republic of Vietnam.

In November 2006 Gazprom and Petrovietnam signed the Agreement of Cooperation stipulating, inter alia, cooperation between the companies in hydrocarbon exploration, production, transportation and marketing, oil and gas processing, as well as oil and gas pipeline construction and operation.

In May 2008 Gazprom and Petrovietnam inked the Agreement for Further Cooperation. The Agreement provides for geological exploration and further development of four new blocks offshore Vietnam, as well as for the incorporation of Gazpromviet Joint Venture for operations in Russia and third countries with the shareholding structure as follows: Gazprom – 51 per cent and Petrovietnam – 49 per cent.

In October 2008 Gazprom and Petrovietnam signed the 30-year Oil and Gas Contract for blocks 129, 130, 131, 132 of Vietnam’s continental shelf. The document stipulates hydrocarbons exploration, development and production in these blocks. The Contract is implemented on the production sharing terms. The project operator is Vietgazprom. The geological exploration stage is financed by Gazprom. As part of the Contract, 2D seismic survey and geochemical research operations were performed, the data obtained are under processing and interpretation.

On December 15, 2009 Gazprom and Petrovietnam entered into the Strategic Partnership Agreement. Pursuant to the document, the parties will continue joint activities in the blocks of the Vietnamese continental shelf as part of the previously signed Oil and Gas Contracts and will explore possible ways of cooperation at free licensed blocks.

In addition, the Agreement provides for intensive interaction between Gazprom and Petrovietnam within oil and gas projects in Russia, Vietnam and third countries through Gazpromviet Joint Venture set up in September 2010.