Block 07/03

Offshore Nam Con Son Basin

PPP equity
5% through wholly owned subsidiary Pan Pacific Petroleum (Vietnam) Pty Ltd

Talisman Energy Inc., who through a wholly owned subsidiary, recently acquired the interests of Premier Oil Vietnam South (30%) and Vamex (25%).

Other partners
PearlOil (Ophiolite) Ltd 25% (a wholly owned subsidiary of Mubadala), and PetroVietnam Exploration and Production Corporation 15%.


3932 km2

Block 07/03

Early in July 2010, PPP Vietnam Pty Limited (PPPV), a wholly owned subsidiary of the Company, received the requisite approvals to acquire a 5% interest in the Block 07/03 Production Sharing Contract from Premier Oil Vietnam South BV (Premier). Under the terms of the original farmout agreement, PPPV agreed to acquire a 15% equity in Block 07/03 subject to PetroVietnam and Vietnamese Government approvals. PetroVietnam subsequently exercised its right of pre-emption to the extent of 10% of the proposed 15% farmout interest.

Block 07/03 is located in the prospective Nam Con Son Basin, adjacent to block 12W which contains the Chim Sao and Dua Oil Field developments operated by Premier Oil. Gas was discovered by BP in the Lan Tay and Lan Do Fields in Block 06-1 to the north. These gas fields have been developed as part of the Nam Con Son Gas Project, an integrated gas-to-power project that delivers natural gas supplies from the offshore fields via a 370km subsea pipeline.

The main objective in Block 07/03 is oil in Miocene sandstone reservoirs in fault traps.

Safety meeting

The Company participated in the first commitment exploration well, Cá Rồng Đỏ, CRD-1X , which was completed in June 2009. The well encountered both oil and gas pay within multiple stacked reservoir layers in Miocene and Oligocene sands. Two of these reservoir zones in the Miocene section were tested and flowed oil at a combined rate of 3,265.4 bbls of oil per day plus 8.1 MMscf of gas per day, through a 48/64” choke. No water was produced from either zone. It was not possible to flow test the Oligocene sands at that time.

The second commitment exploration well, Cá Rồng Vàng CRV-1X, spudded in November 2009 did not encounter any significant hydrocarbons, and the well was plugged and abandoned as planned. Cá Rồng Vàng well did, however, provide important pressure data which has been used in assessing the CRD discovery.

The Cá Rồng Đỏ discovery of 2009 was further delineated in early 2011 by the drilling of the CRD-2X appraisal well which evaluated the Oligocene sands and found 72m net condensate/gas pay, a significant increase compared with the 17m of net pay found in the Oligocene section in the up dip CRD-1X well. Two zones were tested and the first zone tested flowed gas and condensate at rates of 9.7 MMscf/d and 870 bopd respectively through a 40/64” choke. The second zone tested flowed gas and condensate at rates of 17 MMscf/d and 1730 bopd respectively through a 56/64” choke. CRD-2X was subsequently sidetracked to further evaluate the distribution of hydrocarbons in the Miocene and intersected 18.3m of net oil pay in the Miocene sands. This compares with 34.4m of net oil pay found in the Miocene section in the up dip CRD-1X well, and 3.8m in the down dip CRD-2X well.

The CRD Miocene reservoirs have recently been further appraised by CRD-3X, which found 28.6m net oil pay and 12.3m net gas pay and the subsequent sidetrack which found 46.1m net oil pay and 49.5m net gas pay. Three cores totalling ~150m were obtained in the CRD-3X well for detailed reservoir analysis.

DSTs were conducted in CRD-3X for three Miocene sandstones reservoirs, which had not previously been flow tested, with the following results;

First test: 4100 barrels of 31.8 deg. API oil per day plus 1.93 million standard cubic feet of gas per day, through a 40/64” choke.

Second test: 2750 barrels of 26.4 deg. API oil per day plus 0.75 million standard cubic feet of gas per day, through a 40/64” choke.

Third test: 1161 barrels of 17.6 deg. API oil per day plus 0.07 million standard cubic feet of gas per day, through a 32/64” choke.

No water was produced in any of the tests.

The operator Talisman has subsequently undertaken and concluded studies related to the potential development of CRD. These included a review of facilities concepts and costing, simulation modelling to optimise recovery and economic analysis. Once the preferred development concept has been approved by partners and Petrovietnam, the joint venture partners will work towards a decision on declaration of CRD commerciality expect in Q4 2014. Petrovietnam has a “back-in” option at declaration of commerciality which, if exercised, would reduce PPP’s participating interest from 5% to 4.25%.

The Production Sharing Contract has been extended to August 2015 to enable time for the completion of the CRD Field Development Plan and for the partners to make a final investment decision, subject to the approval of the Vietnam Government. Assuming that the ongoing studies and approvals support the commercialisation of CRD, the evaluation and development program is currently targeting first oil in 2018.

Talisman estimates a gross 2C Contingent resource of 67 MMboe.

The final commitment wildcat exploration well, CD-1X, was drilled in 2014 to evaluate the hydrocarbon potential of the Silver Sillago prospect, a tilted fault trap targeting Miocene clastic reservoirs located about 55 km to the west of CRD in Block 07/03. The well encountered sandstones in the main objective sequence as prognosed, but no hydrocarbons were present and the well was subsequently plugged and abandoned.