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Vietnam's industry ministry proposes export tax cut for small oil field

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Staff Writer | October 20, 2017
PetroVietnam
Asia   The Truong Son JOC

Vietnam's Ministry of Industry and Trade has proposed that the export tax on crude oil produced from the Song Doc oil field be abolished, state-owned PetroVietnam said.

Production from the field will incur losses if the 10% export tax is not removed, PetroVietnam added.

Song Doc is a small field with high operating costs, where production is difficult due to water and sand, it said.

The field produced 164,300 barrels or 1,786 b/d of crude oil in the third quarter and is expected to pump 154,860 barrels in Q4, according to PetroVietnam.

If the export tax is not removed, Song Doc is likely to incur a loss of Dong 6 billion ($262,000) in Q1 2018, PetroVietnam said.

PetroVietnam's upstream unit PVEP took over as owner and operator of the oil field in block 46-02 in November 2013 after two foreign partners in the joint venture project withdrew.

The field, in the Malay-Tho Chu Basin offshore southern Vietnam, was formerly owned by Truong Son Joint Operating Company, a joint venture between Canada's Talisman Energy (30%), Malaysia's Petronas (30%) and PVEP (40%).

The Truong Son JOC pumped first oil from the Song Doc field in November 2008, with initial output at 23,000 b/d.

Talisman and Petronas then viewed Song Doc as difficult and ineffective and decided to exit.

But Vietnam tried to maintain production at the field to add more crude oil to the country's output and help ensure national sovereignty rights at sea, according to PetroVietnam.


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