SK Innovation has officially become the operator of Block 16-2 off southern Vietnam after completing the acquisition of 70% equity stake on July 21st. In order to reach this operatorship, previously SK Innovation had signed a Farmout Agreement (FOA) with the Vietnamese state-run company PetroVietnam Exploration Production Corporation (PVEP) in October last year, and received government approval recently.
▲ Locations of the oil blocks that SK Innovation are participating in Vietnam
Block 16-2 is situated in the Cuu Long Basin(1), the most promising oilfield in Vietnam. In 1998, SK Innovation obtained the exploration license of Block 15-1 as a partner in Vietnam, and later on additionally expanded their exploration that includes Block 15-1/05 and 15-2/17.
(1) Cuu Long Basin (Mekong Basin): a rift basin off southeastern coast on Vietnam, outboard of the Mekong Delta
Especially in the case of Block 15-1, ever since SK Innovation started crude oil production at this block since 2003, it still has been producing actively for 17 years to present. In 2015, SK Innovation verified the commercial viability of the Lac Da Vang(2) oil field in Block 15-1/05 after a pilot production of up to 2,450 barrels a day. Afterward, SK Innovation declared the commercial viability of the Lac Da Vang field in January 2019 and is currently preparing its development to start producing in 2023. Moreover, in May last year SK Innovation additionally discovered crude oil with commercial viability at the Lac Da Trang(3) field on the same block.
(2)(3) Lac Da Vang means Yellow Camel, Lac Da Trang means White Camel
▲ SK Innovation and PVEP at the Signing ceremony to Handover Data and Documents in respect of Block 12 on July 21st in Hanoi, Vietnam
Block 16-2, which SK Innovation has taken over the operatorship this time, is the area where oil conservation was confirmed in the past through the acquisition of 3-dimensional seismic data and exploration. SK Innovation plans to execute exploratory drilling in 2021 by selecting the most promising region within the sector through integrated analysis of the new 3-dimensional seismic data to be acquired in the western region of the field and reprocessing of the existing data for the central and eastern regions.
Through the securing of the 16-2 mining sector, SK Innovation has established itself as a major E&P Player and key collaborative partner for projects in Vietnam. An official of SK Innovation E&P Business disclosed: “Through the acquisition of the operatorship of Block 16-2, along with Block 15-1 (production), Block 15-1/05 (development), and Block 15-2/17 (exploration), we have laid the foundation for the strategy to establish and expand each project by stages.”
SK Innovation’s E&P Business dates back to 1983, and it has been participating in 13 oil blocks, 4 LNG projects in 8 countries according to the data up to the end of 2nd quarter of 2020.