Natural Gas Deposit Found in South China Sea

The Russian-Vietnamese joint venture Vietgazprom has discovered a natural gas deposit on the continental shelf of Vietnam. After five years of unsuccessfully searches and an estimated investment of $50 million, Gazprom will be able to produce at least 10 billion cu. m. of gas to sell in Vietnam and China.

Gazprom's development strategy includes completing full chains, from production to sales, in areas outside Russia, on the continental shelves of Venezuela, Vietnam, India and in the Caspian Sea. Gazprom and Petrovietnam signed an agreement in September of 2000 for the 25-year exploration of Block 112 of the Vietnamese continental shelf. The deposit was discovered in Block 113, however. Gazprom received the right to explore that block in 2005. The second test well it drilled there yielded "an industrial flow of natural gas."

The gas flow from the well amounts to up to 400,000 cu. m. per day. Gas condensate has also been detected in the flow. Spokesmen of Zarubezhneftegaz, which represents Gazprom's interests in Vietnam, said that the discovery of the deposit marks the end of the first of the three phases of the geological exploration project, adding that the deposit contains predicted reserves of 300 billion cu. m., but that number would probably grow.