Vietnam to start production at Chim Sao end-Sept

Vietnam has offered Chim Sao crude for loading in October, its second new grade in two months, as it reverses a slide in exports with new and expanded production that could make it Southeast Asia’s second-largest exporter by 2012.

Chim Sao is the first crude that will be priced on the dated Brent marker at the start of production, in line with a gradual shift by Asia-Pacific producers toward the global benchmark and away from regional ones.

“Principals of the crude were strong on this issue,” a source familiar with the matter said, referring to equity holders of the oilfield.

Petrovietnam was also keen to try pricing its crude on dated Brent, the source said.

Vietnam prices all its crudes, except Bunga Orkid, Kekwa and Rong Doi condensate, on the Minas formula, an average of the price assessments from Platts and RIM.

It was mulling a change in the pricing formula for its crude to partly dated Brent, following Malaysia, as both nations seek a more liquid benchmark in line with international crude prices.

FIRST OIL IN END-SEPT

Field operator Britain’s Premier Oil holds a 53.125 percent equity stake in Chim Sao, or Block 12W in Nam Con Son Basin, about 400 kilometres southeast of Ho Chi Minh City. The offshore field is expected to see first oil at the end of September, trade sources said.

Chim Sao, which has reserves of more than 50 million barrels, will produce around 25,000 barrels per day of crude at its peak. Australian energy firm Santos holds a 31.875 percent share while PetroVietnam has 15 percent.

Premier Oil could not be immediately reached for comment.

Vietnam’s state oil marketer PV Oil issued a tender offering the first two cargoes of Chim Sao crude for October loading, trade sources said.

PV Oil plans to sell two 250,000-300,000-barrel cargoes for loading on Oct. 17-29, they said.

The tender will close on Sept. 13 with bids remaining valid until Sept. 15. – Reuters