Vietnam oil find to boost BP run of success

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The Independent Online
BRITISH PETROLEUM, the oil giant, is believed to have made a big oil and gas discovery off Vietnam, one of the world's most promising oil regions.

BP has been carrying out a massive drilling programme in the region since last year. Industry sources suggest that the company struck a large oil-bearing structure in the Nam Con Son (Saigon) basin earlier this year.

The news has emerged from the Far East in the past few days and there is a growing belief within the industry that the find is an important one. Although assessing the structure's commercial potential will take many months, geologists guess it may contain 200 million barrels of oil, equivalent to a medium- sized North Sea field.

The find continues BP's remarkable run of exploration successes under John Browne, chief executive of BP Exploration, at a time when the group is struggling under a pounds 10bn debt burden and difficult trading conditions.

In Colombia, the company has discovered the giant Cusiana field, which has estimated oil reserves of about three billion barrels and 2,000 billion cubic feet of gas. Earlier this year, the company made an important oil discovery off the Shetlands, initial estimates putting the field at up to 500 million barrels. It was the biggest find in the British sector of the North Sea in the past five years and opens up an entirely new oil province, which will require substantial fresh investment.

Meanwhile, BP is likely to receive a substantial boost from proposed changes to petroleum revenue tax. The Government is planning to cut PRT from 75 per cent to 50 per cent on existing fields and to abolish it for new ones.

Analysts believe the changes could boost BP's profits by pounds 150m a year.

Hopes concerning the Vietnamese find were first raised by a 'blow out' after BP struck gas at very high pressure. Sources said that since then there has been further drilling work which has revealed a large gas column situated above a big oil-bearing structure. BP declined to comment on the reports.

The group owns stakes in three exploration blocks in Vietnam in partnership with Statoil, the Norwegian state oil company.

BP acquired a 45 per cent stake in block 6 - where it reportedly made the new find - through a 'farm-in' arrangement with ONGC, the Indian oil company.

Last week, BP reported a better- than-expected first-quarter result, turning round a net loss of pounds 66m into a net profit of pounds 325m for the three months to 31 March. The shares, which have outperformed the market this year thanks to heavy US buying, closed at 306.5p on Friday.