Vietnam Oil and Gas Upstream Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Vietnam Oil and Gas Upstream Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Vietnam oil and gas upstream market is expected to grow at a CAGR of less than 2% during the forecast period of 2020-2025. Factor such as the reduction in the cost of the drilling in offshore by 40% is likely to drive the Vietnam oil and gas upstream market during the forecast period. However, volatile oil prices are expected to have some amount of negative impact on the Vietnam oil and gas upstream market.

Key Highlights

• Due to the majority of the oil reserves offshore it held a significant market share in 2018, and it is likely to dominate the market during the forecast period.
• Vietnam due to its increasing population is net importer of oil and gas, for future vietnam has planned to achieve the target of producing oil and gas in the country only. This is likely to create several opportunities for the oil and gas upstream market.
• Constant hindrance from China in the South China Sea is likely to restrain the Vietnam oil and gas upstream market.

Key Market TrendsOffshore Segment to Dominate the Market

• In 2018, Vietnam had the second largest reserves in east Asia with 4.4 billion barrels. Recent activities to increase oil and gas production from offshore has attracted investments from various companies.
• In December 2018, Exxon Mobil Corporation opened a front-end engineering design (FEED) contract for the Co Voi Xanh field, also known as Blue Whale Project. Co Voi Xanh, after its exploration and appraisal phase, came out to be the as largest gas field in Vietnam.
• In 2018, Russian oil major Rosneft started drilling of the Lan Do field. The target depth of the well was 1200 meters, and the water depth was 160 meters. From the exploration, it was estimated that the reserves of natural gas in the Lan Do field were 23 billion cubic meters. Such foreign investments from an oil major in the offshore segment is expected to create a positive impact on Vietnam oil and gas upstream market.
• In July 2019, Eni S.p.A, an Italian oil major announced that its exploration well in Song Hong Basin, offshore Vietnam, has encountered gas and condensate in Ken Bau prospect. Exploration well Ken Bau X1 was drilled at a water depth of 95 meters and a total depth of 3606 meters.
• In October 2019, Jadestone Energy submitted its plan for the development of its Nam Du and U Minh gas fields in offshore south-western Vietnam. Further approval from the government was expected later in 2019.
• In December 2019, KS Energy subsidiary KS Drilling got a contract extension for its KS Java Star 2 jack-up rig. This was the third extension of the rig after it was awarded contract December in 2018.
• Therefore, owing to the above points, activities in offshore are likely to dominate the Vietnam oil and gas upstream market during the forecast period.

China's Hindrance Expected to Restrain the Market

• China in the past years has created hindrance in the offshore activities done by Vietnam. It claims all the oil and gas-rich zone as part of Chinese territory in the South China Sea. Though the South China Sea border of China ends way before the Vietnam exploration and production sites, yet China had created problems for the companies in offshore Vietnam.
• In 2018, Repsol, a Spanish oil and gas major, second time stopped all its operations in Vietnam offshore in the South China Sea, because of the pressure from China on the Vietnam government to halt all the exploration work in the south China Sea.
• In 2019, China warned Vietnam on the Co Voi Xanh field in which Exxon Mobil has a significant share. According to China, the field is planned to produce oil from the same reservoir, which extends to the China region also.
• Hence, the above points clearly suggest that China is likely to create hindrance in any offshore activity done by Vietnam and is expected to restrain Vietnam oil and gas upstream market during the forecast period.

Competitive Landscape

The Vietnam oil and gas upstream market is moderately consolidated. Some of key players in this market include Exxon Mobil Corporation, Eni S.p.A, Vietnam Oil and Gas Group (Petrovietnam), NK Rosneft' PAO, Jadestone Energy Inc, amongst others.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
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Companies Mentioned

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