Premier, Santos produce first oil from Chim Sao in Vietnam

Santos Ltd (STO.AU) said Monday that oil production has begun at the $800 million Chim Sao project offshore southern Vietnam.
It said the project, operated by joint venture partner Premier Oil PLC. (PMO.LN), was completed on time and under budget.Oil production will commence from six wells, and the gross production rate is expected to level out at around 25,000 barrels per day, Santos said in a statement.

The development includes a platform and floating processing, storage and offloading vessel.

The company didn’t disclose the cost of the project but partner Premier has said it would cost $800 million to develop.

Premier has a 53 percent stake in Chim Sao, Santos holds 32 percent and PetroVietnam has a 15 percent stake.

Vietnam is one of Asia’s hotspots for oil and gas exploration, as the government offers attractive investment terms to foreign companies capable of drilling offshore and sharing technology that state-owned PetroVietnam, doesn’t own.

Vietnam’s economy grew 6.8 percent last year, and commercial oil and gas discoveries will help meet its growing energy demand.

Santos said oil from Chim Sao, located about 310 kilometers off Vietnam’s southern coast, will be exported via shuttle tanker and its gas will connect into the existing infrastructure via a subsea pipeline.

The group plans to undertake further exploration and appraisal drilling next year and Santos said it expects to add “significant resources to the project in the near future”. -By Ross Kelly.
Wall Street Journal

Tags: Chim Sao, Premier, Santos