Example of Matching Technological Needs and Seeds between Vietnam and Japan

JOGMEC Techno Forum 2013 Example of Matching Technological Needs and Seeds between Vietnam and Japan By Le Ngoc Son, Petrovietnam Tokyo, May 8, 2013

JOGMEC Techno Forum Tokyo, May 7-8, 2013 Agenda 1. Overview of Vietnam Oil & Gas 2. Collaboration between PVN and JOGMEC 3. GTL studies 4. CO2 EOR studies 5. Vietnam Technical Challenges & Expectation to Japanese technologies

Overview of Oil & Gas dev. in Vietnam TIỀN HẢI C, D14, ĐÔNG QUAN Lô 102&106: THÁI BÌNH, HÀM RỒNG Lô 103&107: HỒNG LONG, BẠCH LONG Lô 112&113: BÁO VÀNG 20 N 15 N 10 N Lô B, 48/95, 52/97: KIM LONG, ÁC QUỶ, CÁ VOI Lô 46/02: SÔNG ĐỐC, NĂM CĂN, NGỌC HIỂN PM3-CAA/46-CÁI NƯỚC THÁI LAN LÀO 52/97 Joint Historic Waters (1982) 48/95 (B) 46/0 2 46-Cai Nuoc CAM PU CHIA 41 42 43 44 45 0 100 K M 105 E HÀ NỘI 37 38 39 40 HANOI BASI N Tien Hai 31 32 33 34 35 36 103 108 104 109 105 107 112 114 V I Ệ T N A M 116 118-2 115 119-2 01/97 15-1 01 15-3 15-2 02 16- Bach 02/97 09-2 1 16-2 Ho 09-1 Ron 03 17 g 09-3 25 04-2 04-1 26 27 28 29 30 101 102 106 110 TP HO CHI MINH 18 19 10 11-1 20 12(W)11-2 06 Lan 21 12(E) Tay 22 23 24 111 113 13 14 05-1A 05-3 08 04-3 15-2 Lan 06-1 Do 07 110 E Hainan Isl. 117 118-1 119-1 Dai Hung TRUNG QUỐC 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 WAB- 21 Lô 11-2: RỒNG ĐÔI, RỒNG ĐÔI TÂY N Lô 15-1: SƯ TỬ ĐEN, SƯ TỬ VÀNG, SƯ TỬ TRẮNG, SƯ TỬ NÂU Lô 01&02: RUBY, PEARL, TOPAZ, DIAMOND Lô 01&02/97: THĂNG LONG, ĐÔNG ĐÔ Lô 15-2: RẠNG ĐÔNG, PHƯƠNG ĐÔNG Lô 15-2/01: HẢI SƯ ĐEN, HẢI SỬ TRẮNG Lô 16-1: TÊ GIÁC TRẮNG Lô 09-2: CÁ NGỪ VÀNG Lô 09-1: BẠCH HỔ, RỒNG Lô 09-3: ĐỒI MỒI Lô 05-1a: ĐẠI HÙNG Lô 05-2&05-3: HẢI THẠCH, MỘC TINH Lô 06-1: LAN TÂY, LAN ĐỎ Lô 12W: CHIM SÁO, DỪA 3

Vietnam Oil and Gas production Sale Gas, BSCM/year Oil Prod., MMTon/year 25 20 15 10 5 0 10 9 8 7 6 5 4 3 2 1 0 198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012 300 82 350 280 210 140 70 0 90 80 70 60 50 40 30 20 10 0 Cum. Oil Prod., MMTon Cum. Sale Gas, BSCM 4

PVN & JOGMEC 55 technical staffs were trained since 1992 MOU was signed in 2007 CO2 EOR: successful of Pilot Test in 2011 Japan GTL Study: screening conducted between JOGMEC and VPI. PVN appreciate the good co-operation & support from JOGMEC! 6

Japan GTL studies Screening studies conducted between JOGMEC & VPI, potential fields identified. Agreement for Phase 2 of study was signed on 4/2011. Japan GTL is potential solution for : High CO2 gas fields development Intergrationwith CO2 EOR Project JOGMEC Techno Forum Tokyo, May 7-8, 2013 8

Potential fields for Japan GTL Potential for developments - Block 102-106-103-107-104 - Block 117, 118, 119 (high CO2) - Block 04-3, Block 46-2 Japan GTL Demonstration Plant in Niigata

CO2 EOR studies 2008-2010 Rang Dong CO2 EOR MOU between PVN and JX-NOEX was signed on 9 th May, 2008 Phase 1 Study (Source: PVN, 2008) CO2 Huff&Puff Pilot Test Hydrocarbon Gas EOR Cuu Long Basin fields CO2 Potential Study 11

CO2 EOR Pilot Test (Huff'n'Puff) in 2011 17-days Test (May-June 2011) 111 tons of CO2 injected and flowed back (2.1 MMscf) Pumped CO2 from boat 7 hours CO2 Injection and 4-days flow back (Source: JOGMEC, 2011) 12

CO2 EOR Pilot Test (Huff'n'Puff) in 2011 (cont.) EOR effect is confirmed: Oil rate increased (up to 1500bpd) Water cut dropped Oil saturation changed CO2 utilization factor 9.8 Mscf/bbl (Source: JOGMEC, 2011) 13

01. CO2 Management Conventional Membrane System Two skids; Footprint = 257m 2 /ea Weight (w/elements) = 302 tons (Source: Talisman Energy, 2012) Difficulties: High CAPEX High frequency of maintenance jobs (every 6 months) Reduce production when doing maintenance Not commercial to develop very high CO2 reservoirs (70-80%) 15

01. CO2 Management (cont.) Current development in PM-3 CAA field shown many difficulties in CO2 management (removal): High CAPEX for CO2 removal facilities (membrane) Requires frequent maintenance (reduce prod. rate) Environment unfriendly (vent CO2 to the air) Middle Vietnam has many TCFs gas reservoirs with high CO2 content! How to develop these reservoir efficiently?! GTL/EOR/CSS? 16

02. EOR Big fields are mature & production declining <= the need of applying EOR to maintain production rate. EOR methods: Thermal: not applicable in Vietnam Chemical: limited studies, poor laboratory facilities. Gas injection: We have BIG CO2 sources (gas fields) + BIG potential to apply CO2 EOR (pilot test confirmed!) How to well match these two parts in one mega project?! 17

03. Mercury Content Treatment Difficulties: High CAPEX High frequency of maintenance jobs Reduce production when doing maintenance No technology available to remove Hg in Oil Service Companies: (Source: Talisman Energy, 2012) 18

03. Mercury Content Treatment (cont.) Difficulties in handling Hg content: High CAPEX for removal facilities Requires frequent maintenance (reduce prod. rate) No technology available to remove Hg in Oil Transport, Storage & Disposal of Mercury Big project (KL-AQ-CV) in development phase, is going to face with this problem! How to resolve this issue efficiently?! 19

04. Marginal Fields Development Traditional offshore field development schematic: WHPs + FPSO + Pipeline + Conventional wells - Heavy (topside around 2000 tons) - High CAPEX - Mostly not reusable - Not commercial for marginal fields (ie. <100 mmstbo) We have many marginal offshore oil and gas fields, with: - Strictly metocean conditions (storm, high wave) - Scatteringly distributed How to develop these field commercially?! 20

05. FracturedBasementReservoir Management The development of Halo model Many other technologies applied (Artificial Neural Network, DFN, dual porosity, ) but yet not to achieve good result. Need more studies and new Initiatives to successful model fractured basement reservoirs!

Summary The co-operation between PVN & JOGMEC in the past has demonstrated beneficial for both sides. Japan technologies have been successfully applied in Vietnam. In alignment with New Initiative of JOGMEC, we (PVN) would like to introduce our current focusing topics and our expectation to your technology in solving them, including: High CO2 reservoir development, application of GTL, CSS EOR utilizing CO2 Mercury content treatment Marginal fields development Fractured basement reservoir management

Arigato Gozaimasu! ありがとう! Thank you for your attention! Xin cảmơn! JOGMEC Techno Forum 2013 Tokyo, May 7-8, 2013