Essar hopes Vietnam success where Shell failed

Vol 14, PW 26 (30 Jun 11) People & Policy
     

UK-listed Essar Energy is hoping to succeed where Shell failed in Vietnam.

Mumbai-based Essar is reprocessing approximately 3000-lkm of old 2D from offshore Block 114, where it holds 100%, and which was abandoned by Shell in the 1990s. “We’ve hired a Singapore-based company for this work,” Essar tells us.

“Reprocessing should be completed in two months.” After this the data will be interpreted in-house by Essar in Mumbai.

Block 114, measuring 5924-sq km block sits in water depths of up to 90 metres in the Song Hong basin, the largest tertiary basin on Vietnam’s continental shelf, containing an estimated 15% of the country’s hydrocarbon resources. Two years ago Essar signed a PSC that commits it to shoot, process and interpret 1000-sq km of fresh 3D in Phase-I, and drill two exploration wells.

“No commitment was made about the depths to which we should drill these wells,” adds Essar. Phase-I lasting six years began in March last year, giving the company ample time to complete its work programme, says Essar.

After interpreting the old 3000-lkm 2D at this block, Essar will decide whether to shoot 3D or immediately start drilling its Phase-I wells. But for now, Essar is confident about the block’s prospects, even though Shell walked away believing the block wasn’t worth either time or money.

Before abandoning Block 114, we hear, Shell drilled one exploration well which recorded oil and gas shows. “But Shell didn’t consider these shows commercially viable.

” Essar will be hoping Shell made a mistake, just as it did when it walked away from block RJ-ON-90/1 in Rajasthan, where Cairn Energy later discovered the Mangala and allied fields, today yielding 150,000 b/d.