Block B-Ô Môn project benefits oil and gas businesses

HÀ NỘI — As the US$10 billion Block B-Ô Môn gas power project chain is expected to start construction in the second half, businesses in the oil and gas value chain in Việt Nam will benefit.

With a total investment of about US$ 10 billion, the project located in the Malay-Thổ Chu basin, southwest Việt Nam, and comprises the development of a gas field and pipeline, was announced in April 2016 and is one of the most significant gas exploitation projects in the country.

Besides benefiting from world oil prices continuing to stay high due to concerns surrounding Russia-Ukraine relations, the project will become a new growth engine for businesses in the oil and gas value chain in Việt Nam, said experts.

According to the VNDIRECT Securities Joint Stock Company, oil and gas production in Việt Nam has continuously decreased since 2015 due to the absence of critical upstream projects. The Block B gas power project chain includes component projects upstream to downstream. 

Experts said after years of delay due to problems at Ô ​​Môn III power plant project; there have been positive signals for the project after the Government issued Decree 144/2021/ND-CP dated December 16, 2021, on the management and use of official development assistance and concessional loans from foreign investors, creating a legal basis for approving the investment policy of Ô ​​Môn III power plant.

As a result, the upstream project is expected to have a final investment decision at the end of the second quarter of 2022, creating a premise for the project. The entire chain of Block B- Ô ​​Môn projects starts construction in the second half of 2022. 

The project investor, the Vietnam Oil and Gas Group, estimated at $19.23 billion will be added to the state budget over the project’s 20-year life from the upstream project and the gas pipeline. 

In addition, four gas-fired power plants in the project with a total capacity of 3,810 MW will supplement the power supply in the southern region.

On this basis, VNDIRECT assesses that the groundbreaking project will be a growth engine for businesses in the country’s oil and gas value chain, strengthening the industry’s foundation and profit growth of oil and gas enterprises.

Specifically, leading companies in the industry have more opportunities to participate and benefit from the project, including upstream service providers such as PetroVietnam Technical Services Corporation and PetroVietnam Drilling and Drilling Services Corporation. 

They are drilling as one of the first steps of upstream mining projects, so the construction of more than 700 exploitation wells in the Block B-Ô Môn project could bring lots of job opportunities for a drilling service provider in the coming years.

Besides, as a key investor for the Block B-Ô ​​Môn gas pipeline, with 51 per cent of the total investment, Vietnam Gas Corporation JSC will be the beneficiary.

The main benefit from this project comes from the additional gas source from Block B and gas transportation charges.

At the same time, the additional gas after this project is completed from 2026 will offset the rapid depletion at long-term gas fields, contributing to maintaining the growth of GAS in the long term.

At the same time, an analyst at SSI Securities Joint Stock Company said that in addition to the Block B-Ô ​​Môn project, GAS will also benefit from much liquefied natural gas energy complex projects. 

With the Government making the construction of liquefied natural gas infrastructure a focus to solve the problem of gas supply shortage and increased electricity demand, GAS led the market with Thị Vải liquefied natural gas port, which will start operating at the end of 2022, supplying LNG for Nhơn Trạch 3 and 4 power plants.

Regarding the development of the LNG market, PVS will benefit as it can participate in gas field development general contractor and contracts in joint ventures with foreign contractors. PVS is currently a joint venture contractor with Samsung E&C for liquefied natural gas in Thị Vải.

World oil prices continue to stay anchored at high levels in the face of instability between Russia and the West over Ukraine, which will help exploration and investment activities, especially the implementation of large projects. — VnExpress News