Repsol to Revive Ca Rong Do off Vietnam

Friday 8 July 2016

Repsol is breathing fresh life into its Ca Rong Do (Red Emperor) oil and gas project in Vietnam after receiving updated contractor submissions and having reset the first oil date.

The project has been in hibernation for the last six months given the prevailing tough economic conditions.

However, sources said that major services providers have now re-submitted their proposals and these are being evaluated by the Spanish operator. “Repsol has decided to activate the project again,” said a well-placed source, adding that it would bring a much-needed boost to the oil and gas sector in Vietnam.

The proposed date for first oil has been reset to 2019, from the previous target of the third quarter of 2018.

The project’s development concept has not changed, added the source, which means a tension-leg wellhead platform will be tied back to a floating production, storage and offloading vessel. Three companies are understood to be competing for the leased FPSO — Yinson Holdings of Malaysia, UK-listed Petrofac and Bumi Armada, also of Malaysia.

The floater will have processing capacity of between 25,000 barrels per day of oil and 30,000 bpd, plus 60 million cubic feet per day of natural gas.

It will be capable of storing about 500,000 barrels of oil, and be moored to the seabed by a fixed internal or external turret system.

A fixed-term lease is up for grabs of between eight years and 10 years, with operations and maintenance to be carried out by PetroVietnam Technical Services Corporation’s (PTSC) production services division.

The bidding contest for the tension-leg wellhead platform had been seen as a two-horse race between Japan’s Modec and Floatec. However, the status of that race is less clear given the closure of most of Floatec’s operations earlier this year.

There was talk then that the Keppel-McDermott venture would continue to pursue Ca Rong Do despite the end of most of its operations, but that could not be confirmed.

The TLP for Ca Rong Do is planned to be connected via a subsea flowline to the FPSO, which will provide full oil and gas processing capability.

The TLP contractor will partner with PTSC in the construction of the platform, which will be the first of its kind in Vietnam.

The platform will float in water depths of up to 350 metres, and host up to 12 wells including oil producers, a water injector and a gas injector. Repsol has previously spoken enthusiastically about its Vietnam position, which it inherited as part of the acquisition of Talisman Energy.

The company has indicated Ca Rong Do is a “quite strong” project, and it had modelled the project “perfectly well” at $55 per barrel, $65 per barrel and $75 per barrel.

Its most recent guidance was that Ca Rong Do sits within “an extensive pipeline of organic opportunities” and is one of the projects being progressed in 2016.

Repsol has said its net investment devoted to the project between 2015 and 2019 is $630 million, meaning a total commitment of just over $1.1 billion for the joint venture.

The co-owners of Block 07-03 are operator Repsol on 55%, Pearl Energy (Mubadala Petroleum) on 25%, PetroVietnam E&P on 15% and Pan Pacific Petroleum on 5%.

According to joint venture partner Pan Pacific, the gross best estimate of potential recovery from Ca Rong Do is 45.3 million barrels of oil, 172 billion cubic feet of gas and 2.3 million barrels of condensate.

Pan Pacific has indicated there are undrilled near-field prospects that, if successful, could be tied back to the FPSO.