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Vietnamese oil firm still on track to drill in 2017

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Vietnamese oil firm still on track to drill in 2017

A government official yesterday denied local media reports that it had received a request from Vietnamese state-owned PetroVietnam Exploration Production Corporation (PVEP) to extend the exploratory drilling contract for Block XV in Kampong Thom province for another year.

Meng Saktheara, secretary of state at the Ministry of Mines and Energy, said PVEP’s current timeline was intact with the company set to enter the third phase of its exploration campaign by January 2017. The new stage would see the company begin drilling test wells after years of seismic and geological surveys.

“There has been no formal announcement of an extension and the company has not approached the ministry asking for one,” he said.

In April, the government approved a request by PVEP to extend its exploratory third-phase drilling contract until January 2017, a year after it was scheduled to commence drilling. The company, which has held exclusive rights to the onshore block since 2010, was granted two years for each phase to be completed, and an additional two years to create a viable business plan for extraction. Its licence is set to expire in 2018.

Local media claimed this week that PVEP was seeking a further extension on test drilling due to the prolonged slump in global oil prices, ongoing negotiations with Cambodian authorities and a shakeup within the company’s upper management.

Saktheara expressed optimism that the company was on track to fulfill its agreement to explore the 6,900-square-kilometre onshore block, but said that there were still technical hurdles that needed to be overcome.

“The company still has to submit a new drilling campaign study after we found that their previous campaign fell below the 20 percent success rate,” he said. “So we required them to conduct a new seismic survey to enhance their rate of success.”

Saktheara explained that once the results of the survey were submitted to the government, they would be reviewed and approved, providing the company discovered an ample amount of oil to warrant drilling. “We are currently working with the technical team from the company and are awaiting the new data to see the commercial viability,” he said.

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