Russia and Vietnam to jointly develop energy in Arctic, Siberia

Russia and Vietnam to jointly develop energy in Arctic, Siberia
Russia’s Gazprom and its oil arm Gazprom Neft have agreed with the Vietnamese energy company Petrovietnam to jointly develop Russia’s Arctic offshore oil and gas in Siberia, as well as supply the country’s ESPO blend crude to Vietnam.

The world’s largest gas producer Gazprom and Petrovietnam agreed Tuesday on the joint exploration of gas deposits in western and southern Siberia.

"Today's agreement will strengthen our partnership in the production of gas in Russia. It’s the first time a company from the Asia-Pacific will act as a partner and co-investor in the development of Gazprom’s promising Russian deposits,” Gazprom CEO Alexey Miller said in a statement.

Gazprom’s oil arm, Gazprom Neft, signed a separate deal with Petrovietnam to develop Russia’s Dolginskoye oil field that has reserves estimated at more than 200 million tons (1.5 billion barrels). It is located in Russia’s Prirazlomnoye field on the Pechora Sea shelf, part of the country’s first offshore Arctic field which opened last year.

The companies have also signed a deal under which Gazprom Neft will supply ESPO blend crude oil to Vietnam, said Reuters.

The Russian oil market saw the introduction of the new ESPO blend in 2009, when the first branch of the Pacific Ocean pipeline was commissioned. ESPO was created especially for the pipeline and now ranks as the best Russia’s blend. ESPO is lighter and contains less salt.

The deals come at a time when Russia’s oil majors including Gazprom Neft, the oil arm of the world’s biggest gas company Gazprom, are being hit by Western sanctions that cap cooperation in offshore drilling.

"Today's agreement will strengthen our partnership in the production of gas in Russian territory. It’s the first time a company from the Asia-Pacific will act as a partner and co-investor in the development of Gazprom’s promising Russian deposits,” Aleksey Miller, Gazprom CEO said in a statement.

Russia and Vietnam also agreed to boost bilateral trade to $10 billion by 2020. In 2013 trade turnover between Russia and Vietnam grew 8.5 percent to $4 billion.

"We have real opportunities and necessary mechanisms for this," said Russian President Vladimir Putin, adding that a high-level ad hoc working group is now negotiating the implementation of 17 investment projects worth more than $20 billion.

Putin stressed that relations between the two countries can be characterized as a comprehensive strategic partnership, and the joint statement adopted Tuesday reflects the prospect of further strengthening.