PETROVIETNAM PETROVIETNAM - JOURNAL VOL 10/2011 99 PETROVIETNAM PETROVIETNAM - JOURNAL VOL 10/2011 PETROLEUM EXPLORATION & PRODUCTION PETROVIETNAM - JOURNAL VOL 10/2011 PETROVIETNAM Petrovietnam’s leaders accompanied President Truong Tan Sang visited the Asian countries The mission of The Vietnam National Oil and Gas Group (Petrovietnam) led by Dr.Sc Phung Dinh Thuc - Chairman of Petrovietnam accompanied President Truong Tan Sang, has visited and worked in India and Sri Lanka from Oct 11 to Oct 15 to promote cooperation in the field of energy Before that, Dr Do Van Hau - President & CEO of Petrovietnam accompanied President Truong Tan Sang had visited and worked in Singapore and Malaysia from Sept 26 to Sept 30 President Truong Tan Sang and Prime Minister of the Republic of India Mamohan Singh witnessed the signing of the agreement between Petrovietnam and ONGC Videsh Limited (ONGC-VL) Photo: PVN Petrovietnam and ONGC Videsh Limited signed an agreement of cooperation In India, both sides agreed to further enhance highlevel visits and meetings between the two countries At the Vietnam - India Business Forum, President Truong Tan Sang noted that there still remains considerable potential for cooperation and agreed to strongly enhance the comprehensive strategic partnership between the two countries based on key pillars of politic, defense, security, economic, cultural and human resource development cooperation On Oct.12, President Truong Tan Sang and Prime Minister of the Republic of India Mamohan Singh witnessed the signing of the agreement between Petrovietnam and ONGC Videsh Limited (ONGC-VL) The agreement was signed by Dr.Sc Phung Dinh Thuc, Chairman of Petrovietnam and Mr D.K Sarraf, CEO and Managing Director, ONGC-VL The agreement is intended for developing long term cooperation in oil and gas industry and shall be in force and effect for three years Two sides will exchange information on the petroleum industry, exchange of working visits of authorities and specialists in various domains of the petroleum industry, new investments, expansion and operations of oil and gas exploration and production including refining, transportation and supply in Vietnam, India, and third countries according to the laws and regulations of their countries In Sri Lanka, President Truong Tan Sang and Sri Lanka’s leaders witnessed the signing of memoranda of understanding on bilateral political consultations, machinery manufacturing, investment promotion, cooperation in education, finance, defense and oil and gas… PETROVIETNAM - JOURNAL VOL 10/2011 FOCUS PV Drilling V - the first TAD rig of Vietnam On Sept 26, President Truong Tan Sang, Deputy Prime Minister Nguyen Thien Nhan and a high-level delegation visited the first TAD rig of Vietnam (named PV Drilling V that was constructed at the Keppel FELS shipyard - Singapore) According to Dr Do Van Hau - President & CEO of Petrovietnam, this is a large project with investment worth over VND 5,000 billion, is designed with modern technology and will be first used in Vietnam PV Drilling held a naming ceremony for PV Drilling V on Oct Photo: PVD Developed by Keppel Offshore & Marine’s (Keppel O&M) Deepwater Technology Group (DTG), PV Drilling V design has revolutionised the way in which drilling tenders work, allowing them to be deployed next to deepwater floating platforms for the first time This ground breaking series, with their enhanced capabilities, can operate and maintain station position in deep waters of up to 5,000ft alongside Spars and Tension Leg Platforms Highly suitable for offshore Vietnam’s harsh environment, PV Drilling V features an 8-point mooring system, which allows the rig to maintain its position amidst currents of up to knots Under the plan, PV Drilling V will drill the first contract for the drilling campaign of the Bien Dong Petroleum Operating Company (Bien Dong POC) At the same time, a delegation comprising leaders of member units of Petrovietnam (PVEP, PV Drilling, PTSC, PV GAS…) led by the Dr Do Van Hau attended the Vietnam - Singapore Business Forum be held on Sept 26 Establish a Joint Venture Company investing in a FSO During his visit to Malaysia, on Sept 29, President Truong Tan Sang visited Malaysia’s National Oil and Gas group (Petronas), in which he appreciated the strict, effective and practical cooperation between Petrovietnam and Petronas He spoke highly of the close, effective and practical co-operation between Petrovietnam and PETROVIETNAM - JOURNAL VOL 10/2011 Petronas over the past 20 years, which brought great economic benefits to each country The Vietnamese State leader suggested that the two groups strengthen cooperation, especially in exploration and production in new oil and gas fields in both Vietnam and Malaysia On the occasion, President Sang received USD 50,000 from Petronas for Vietnamese Agent Orange victims On the same day, Petrovietnam Technical Services Corporation (PTSC) and Yinson Holdings Berhad signed a joint-venture company investing in a Floating Storage & Offloading (FSO) Facility The signing was held at the Malaysia - Vietnam Business Forum under the witnessed of President Truong Tan Sang, Deputy Prime Minister Nguyen Thien Nhan, Dr Do Van Hau - President & CEO of Petrovietnam and officials from the Malaysian Government FSO “PTSC Bien Dong 01” is the first condensate FSO which has the break-up mooring & subsea systems This project is totally performed by PTSC, ranging from engineering, new-building, to pre-commissioning, hookup, offshore installation, and operation and maintenance during the period of some 20 years The total investment of the project is around 150 million USD Viet Ha PETROVIETNAM In the first nine months of 2011: Petrovietnam earned total revenue of VND 493 trillion On Oct 11, The Vietnam National Oil and Gas Group (Petrovietnam) held a press conference to announce business result of the third quater of 2011 Petrovietnam earned total revenue of VND 493 trillion (USD 23.48 billion) in the first nine months of the year, an increase of 47 percent over the same period last year The Group had completed three business goals for the year ahead of schedule, which are revenue, contributions to the State budget and acceleration of oil and gas reserves G ross revenue was now equivalent to 98 percent of Petrovietnam’s yearly target and would likely reach its goal later this month Petrovietnam estimates to gain a total revenue of VND 678 trillion for the whole year, surpassing its initial target set for this year by VND 178 trillion The Group’s contribution to the State budget totalled VND 116 trillion so far this year, a surge of 14 percent over its target for the whole year and 32 percent over the same period last year The Group also succeeded in accelerating recoverable oil and gas reserves in 2011, following the discovery Dr Do Van Hau, President & CEO of Petrovietnam chaired the third quater press of three new oil and gas fields and conference Photo: Duc Chinh the signing of five new oil and gas the Group shall maintain safe operation of the oil and agreements, including four domestic gas pipeline system, the Dung Quat Refinery, the Power deals and one overseas contract In the past nine months, Plants Ca Mau & 2, Nhon Trach & and the Phu My with oil prices ranging from USD 100 - 115 per barrel, fertilizer plant The Group contributed 10.23 billion Petrovietnam’s oil sales reached USD 9.3 billion, a yearkWh to the national grid so far this year, up 3.5 percent on-year increase of 49 percent, beating the Group’s yearly year-on-year and equivalent to 83 percent of its yearly plan by percent goal “Petrovietnam will aggressively carry out its power Meanwhile, the oil and gas services contributed projects with the target of contributing up to 25 percent 28.6 percent to the Group’s total revenue, worth VND of the country’s energy production by 2015”, Dr Hau said 141 trillion, up 16 percent against the same period Dr Do Van Hau also said the Group had co-operated last year Petrovietnam’s profit during the January to with foreign partners in the exploration and production of September period reached VND 27 trillion Petrovietnam oil and gas overseas, with projects deployed in 13 countries, had disbursed nearly VND 60 trillion and postponed and including Russia, Nigeria, Malaysia and Venezuela With rescheduled 56 projects worth VND 7.25 trillion In the regard to the Group’s divestment from non-core business last quarter, Petrovietnam aimed to begin the tapping lines, Hau confirmed Petrovietnam would continue its onof three new gas and oil fields, including two in Viet Nam going investments in core businesses including oil and gas and one in Malaysia exploration and production, gas and power industry and Dr Do Van Hau, President & CEO of Petrovietnam said oil and gas services, and re-consider other investments in that to help ensure national energy and food security, minor industries Mai Huong PETROVIETNAM - JOURNAL VOL 10/2011 FOCUS Vietnam, Netherlands, Uzbekistan: Boost energy cooperation Vietnam and Netherlands are expected to further their energy cooperation after a series of agreements were signed Photo: Nhat Bac O n September 29, Prime Minister Nguyen Tan Dung attended the Netherlands - Vietnam Energy, Oil and Gas Cooperation Forum in the Netherlands At the forum, the two sides touched upon issues helping to ensure Vietnam’s energy security, including advanced energy technologies, bilateral energy cooperation mechanisms, facilitation of environmentally friendly energy usage, development of energy-saving programs, and sharing of information on oil supplies… Speaking at the forum, Prime Minister Nguyen Tan Dung stressed that Vietnam considers energy a key economic sector which contributes to realising the country’s Millennium Development Goals (MDGs) and shortens the national industrialization and modernization process He said that Vietnam’s total energy demand for commercial purposes is forecast to increase by over percent each year in the 2010 - 2025 period, with electricity demand rising some 15% annually The Vietnamese Government is actively taking various measures to ensure energy security, such as putting forth suitable policies to attract investment, especially foreign PETROVIETNAM - JOURNAL VOL 10/2011 investment in the energy sector, and create favorable conditions for implementing energy projects in the country Vietnam is also diversifying energy sources, giving priority to the development of renewable energy, liquefied natural gas-fuelled power and atomic energy Meanwhile, it is fostering energy-saving programs, building up energy price roadmaps Dutch Deputy Prime Minister Maxime Verhagen said the Netherlands - Vietnam cooperative ties have developed vigorously in various spheres, including energy The Netherlands will continue to closely cooperate with Vietnam in technology transfer, scientific research and oil and gas training Deputy Prime Minister added that it will also encourage and support the two countries’ enterprises, especially those operating in the fields of energy and oil and gas Vietnam and Netherlands are expected to further their energy cooperation after a series of agreements were signed At the forum, Prime Minister Nguyen Tan Dung witnessed the signing of memoranda of understanding (MoU) on energy cooperation along with an agreement PETROVIETNAM discussed with his Uzbekistani counterpart, Shavkat Mirziyoyev, a wide range of measures to boost the multifaceted cooperation between the two countries, focusing on economic trade and investment ties in Tashkent on October Both Prime Ministers spoke highly of the effective oil and gas exploration and production of Vietnam National Oil and Gas Group (Petrovietnam) in Uzbekistan, stressing that oil and gas is a spearhead cooperative area between the two nations Prime Minister Nguyen Tan Dung proposed Uzbekistan soon finalise procedures for the signing of a Minister of Industry and Trade Vu Huy Hoang and Minister of Foreign Economic Relations, contract between Petrovietnam and Investments and Trade of the Republic of Uzbekistan witnessed the signing of MoU between Vietnam Petroleum Institute and Uzbekistan’s Institute of Geology and Exploration of Oil and the Uzbekistani Oil and Gas National Gas Fields Photo: VPI Holding Company in Bukhara Khiva, Uzbekistan The Vietnamese on oil and gas cooperation between Vietnam National Oil Government is ready to facilitate the Uzbekistani Oil and and Gas Group (Petrovietnam) and the Netherland’s Royal Gas National Holding Company’s involvement in oil and Dutch Shell Group A letter of intent between Petrovietnam gas exploration and exploitation projects on Vietnam’s and companies and organisations which join in Advanced continental shelf Energy Technologies International (AETIN) programme For his part, Prime Minister Shavkat Mirziyoyev on promoting cooperation - investment - technology affirmed that the Uzbekistani Government always transfer and training, and an MoU on training cooperation supports and creates favourable conditions for oil and between the Petrovietnam University (PVU) and the Delft gas projects with Vietnam, which, he said, is an important University of Technology were also signed cooperative field The two PMs assigned leaders of On the same day, Prime Minister Nguyen Tan Dung ministries and branches to meet and implement specific received the leaders of the Royal Dutch Shell Group, cooperative measures affirming that the Vietnamese Government will support On the same day, Minister of Industry and Trade Vu and create favourable conditions for the Group to continue Huy Hoang and Minister of Foreign Economic Relations, doing business in Vietnam Prime Minister Nguyen Tan Investments and Trade of the Republic of Uzbekistan Dung emphasized that, during 20 years of operations in witnessed the signing of memoranda of understanding Vietnam, Shell has made great contributions to Vietnam’s (MoU) on cooperation in scientific research (joint study oil and gas sector, helping meet the country’s increasing on the issues of the petroleum industry in Vietnam and energy demand Prime Minister Nguyen Tan Dung Uzbekistan which are of interests for both parties), training suggested the Group attaches importance to developing activities to share expertise and technology transfer… new, safe and environmentally friendly energy resources between Vietnam Petroleum Institute (VPI) and Uzbekistan’s as it is a focus of the Vietnamese Government’s attention Institute of Geology and Exploration of Oil and Gas Fields; to ensure the country’s sustainable growth cooperative agreement between PV Engineering and a After the successful visit to Netherlands, Prime member unit of Uzbekneftegaz; a cooperative agreement Minister Nguyen Tan Dung continued his trip to Uzbekistan between PVI Holdings and Alfa Invest… from Oct to Oct Prime Minister Nguyen Tan Dung Huy Hoang PETROVIETNAM - JOURNAL VOL 10/2011 FOCUS The 50th Anniversary of the Traditional Day of the Vietnam Petroleum Industry: Achievements and Development Strategy Scientific and technological activities always play an important role in the development strategy of the Vietnam National Oil and Gas Group The 2011 Science - Technology Conference titled “The 50th Anniversary of the Traditional Day of the Vietnam Petroleum Industry: Achievements and Development Strategy” is a forum to introduce achievements and development orientation of the core business of Petrovietnam Besides the Conference, the 9th “Vietnam Oil and Gas Expo 2011” will be one of the meaningful activities marking the contribution and determination of the Vietnam petroleum industry in fulfilling the aspirations of respectful President Ho Chi Minh T he 2011 Science - Technology Conference titled “The 50th Anniversary of the Traditional Day of the Vietnam Petroleum Industry: Achievements and Development Strategy” will take place on Oct 28, 2011 on the 4th floor, VPI Tower, 173 Trung Kinh, Hanoi The Conference is a forum for introducing the achievements and the development orientation of the core business of Petrovietnam including exploration and production, refineries and petrochemistry, gas and power industries, advanced petroleum technical services as well as EOR solutions, maintaining petroleum productivity and oversea investments In the Conference, 13 reports will present the successful achievements of the last 50 years and major development orientations for successfully realizing the Strategy for Accelerating the Developments to 2015 and towards 2025 of Petrovietnam including the topics such as exploration and production in Vietnam and overseas, refineries, processing and petro chemistry, gas and power industries, market development for petroleum products, advanced petroleum technical services, infrastructure construction, PETROVIETNAM - JOURNAL VOL 10/2011 Fig.1 Oil and gas production and crude oll export (source: PVN) Fig.2 Revenue and contribution to state budget (source: PVN) PETROVIETNAM scientific - technological and human resource development measures Scientific and technological activities always play an important role in the development strategy of the Vietnam National Oil and Gas Group Petrovietnam’s policy is to intensively invest on scientific and technological R&D, and innovation As a result, The Vietnam Petroleum Science and Technology has remarkably contributed to Petrovietnam’s achievements sofar on its 50 years of development Among the commendable scientific and technological achievements, the scientific complex on prospecting discovering and effectively exploiting oil reservoirs in the pre-tertiary granitoid basement of Cuu Long basin in the continental shelf of Vietnam is an outstanding one With a series of the patents granted by the National Office of Intellectual Property of Vietnam (NOIP) and the Intellectual Property Agency of the Russian Federation, this scientific complex had changed the traditional concept on hydrocarbon exploration, enriched the petroleum system theory and made a turning-point for the development of the Vietnam Petroleum Industry Besides the above mentioned Conference, the 9th “Vietnam Oil and Gas Expo 2011” will be held on Oct 27 - Oct 29, 2011 in Giang Vo Exhibition Center (Hanoi) Participating in the Expo are on pavilions of France, Russia, Singapore, Norway and Vietnam and about 190 exhibitors from 19 countries and territories around the world The 9th Vietnam Oil and Gas Expo will be the largest one so far The expo takes place at a critical time when the whole industry is implementing the strategy of accelerating developments, making great efforts in exploration and production in the overall continental shelf of Vietnam as well as in other parts of the world Advanced technologies, equipment and technical services that are displayed at the expo by different international and local groups and companies can be applied to the implementation of investment projects in Vietnam in the coming years Compared to the previous ones, the expo this year will appeal even more to the interests of international and local investors and companies in the Vietnam petroleum industry This is represented by the increasing number of exhibitors and larger space required by national pavilions and companies; particularly by the presence of some big companies marking their return after a period of absence Being a biennial event from 1991 to date, Vietnam Oil and Gas EXPO is growing in size and gradually becoming an exhibition brand name in the region, attracting international and domestic oil and gas companies, equipment manufacturers, services suppliers and product retails in the petroleum and energy sector With the theme “Vietnam petroleum industry - 50 years of fulfilling the aspiration of President Ho Chi Minh” the booth of Petrovietnam - the mother company - focuses on milestones in all its operations during the last 50 years of development, particularly the exploration and production success in fractured basement, one of the meaningful achievements of Vietnam’s petroleum industry; adding 17 separated booths of member corporations display their most outstanding successes on their development The expo will be one of the meaningful activities marking the contribution and determination of the Vietnam petroleum industry in fulfilling the aspiration of respectful President Ho Chi Minh Ngoc Linh Dung Quat Refinery Photo: BSR PETROVIETNAM - JOURNAL VOL 10/2011 PETROLEUM PROJECT TECHNOLOGY + Subsea gas/liquid separation with single production lines: Gas/liquid separation had been investigated at the early stages, and the conclusion was that it would be a good alternative, with single lines replacing conventional production loops SPS contractors were therefore consulted to develop a technical solution for Pazflor based on subsea G/L separation All technical, reliability, maturity and risk aspects were investigated, and in particular DNV conducted reliability studies (FMECA Failure Mode, Effect and Criticality Analysis and FMIRR Failure Mode Identification and Risk Ranking) As the outcome of these different studies, subsea gas/liquid separation with single production lines was selected as the development concept for the Miocene fields 2.2 Features and benefits of the pazflor subsea separation concept Three Subsea Separation Units, with related umbilical and topside equipment will be installed in the Miocene area shut-down The multiphase part of the system, upstream of the separator, is preserved by depressurization, thereby ruling out the need for a pigging loop - The crude is not waxy, so again, regular pigging is unnecessary - All the flowlines slope down towards the FPSO, meaning that they will naturally empty into the separator by gravity effect during a shut-down; this also favors the restart operations (during cold restart, the system can be maintained at a reasonably low pressure, outside the hydrate zone) - Easier preservation sequence, more stabilized production (smoother flow in the risers, slug catching methods not required) 2.2.2 Cost reduction impacts On the flowlines, umbilicals and risers: With subsea production and water injection wells which ‘tee’ into infield flowlines, and flow into a seabed separation unit, meaning: 2.2.1 Operating features + Shorter flowline length, no manifolds, fewer spool pieces, no pigging loops - The activation system (separator + pumps) provides the additional energy required to sustain the upper Miocene production profile, which would be less efficient with gas lift injected at the riser base + Reduced insulation requirements on the flowline due to less stringent cooldown requirements and lower methanol demand - Liquids and gas leaving the separator are produced outside the hydrate formation region, even in the event of + Additional in line tees (ILT) with ROV-operated valves + Fewer risers: x 10” + x 6” instead of x 10” + x 4” for gas-lift On drilling: With an overall reduction in drilling trajectory length, due to wells being “teed” into flowlines, additional flexibility for reservoir in terms of target well implantation On the FPSO: + With a lower compression capacity requirement (gas-lift unnecessary) + Removal of dead oil circulation (pump + heaters) Fig Schematic representation of flow in a Subsea Separation Unit 82 PETROVIETNAM - JOURNAL VOL 10/2011 + Smaller sized first stage separator (no slug catcher required) PETROVIETNAM + Lower power generation requirements (compared with RBGL + MPP) due to the overall efficiency of the artificial lifts means 2.3 Subsea separation and production system layout Pazflor involves the simultaneous production of two very different types of crudes, one heavy (17 - 22°API), highly viscous crude (ranging from - 10cP in reservoir conditions), to be extracted from three Upper Miocene reservoirs (Perpetua, Hortensia and Zinia), and a light crude (35 - 38°API) that will be produced from Acacia, a reservoir in the Oligocene layer Two different subsea development schemes were designed: - “Conventional” flow loop with manifolds on Oligocene (similar to developments like Girassol and Dalia): + The preservation strategy is based on live oil displacement with stabilised oil + Reservoir pressure is maintained by combined water and gas injection: Water in most Oligocene horizons, and gas in Oligocene upper sands - Subsea gas/liquid separation and liquid boosting pumps on Miocene (World First): + Production wells are “teed” individually or by pair on a single production flowline, connected to the separator of the Subsea Separation Unit from where the liquids are then boosted by pumps up to the FPSO, while the gas flows naturally to surface + There is one SSU per Miocene production line The Miocene fields are developed with three lines The SSU are located close to the first production well, to ensure quick heat-up during a cold restart Each SSU has its own power and control umbilical The multiphase line is preserved against hydrate formation by depressurisation after the “no touch time” of hours The entire subsea network is depressurised from the Christmas tree choke to the separator, via the gas lines of the SSU The liquid line of the SSU is naturally outside the hydrate formation zone, since most of the light ends have been flashed off ; no hydrate preservation measures are required On the Miocene reservoirs, pressure is maintained by water injection only Each production line has its own injection line Subsea umbilicals risers and flowlines (SURF) The size of the Pazflor field, about 600km², has a huge impact on all SURF equipment, pipeline, umbilical, risers 180km of pipelines (rigid and flexible lines) and 84km of umbilicals will be installed Separator liquid treatment capacity: 110 kblpd each Separator Gas treatment capacity: MSm3/d each SSU weight: ~1,000 tonnes Two subsea pumps per SSU: - Power requirement per pump: 2.3MW - Design capacity per pump: 70,000 blpd - with 80/100 bar delta p Compared with Dalia, which was already in its time, a gigantic field, Pazflor will install double the length of pipelines Pazflor has two different production systems and consequently requires two different flowline systems But, one of the main technical challenges will be the installation of the three subsea separation units 3.1 Surf on the Miocene area Pazflor’s three Miocene fields - Hortensia, Perpetua, and Zinia - will be developed under an identical scheme designed around the concept of subsea gas/liquid separation The fluid from the production wells flows via 6-inch jumpers to the single or double In-Line Tees (ILT) that connect to a 10-inch multiphase flowline Fig Pazflor SSU - Miocene fields - (artist’s impression) This rigid line, thermally insulated with 45mm of polypropylene, transports the production to a Subsea Separation Unit (SSU) where the liquids PETROVIETNAM - JOURNAL VOL 10/2011 83 PETROLEUM PROJECT TECHNOLOGY are separated from the gas The gas rises naturally to the surface, travelling through two 6-inch flexible lines, then two 6-inch flexible risers linked to the FPSO The liquids are pumped to the surface via a flexible 10-inch line and a flexible 10-inch riser The multiphase production lines are connected to their respective SSUs by flexible spools dubbed “flextails,” another innovation for Pazflor These elements, which replace conventional rigid spools, considerably simplify the manufacturing schedule There will be 18 producers feeding into these subsea lines Eight of these will be operational for the start-up of Pazflor Production and injection umbilicals are controlled from the surface by umbilicals channeling power supply cables and hydraulic and chemical injection lines 3.2 Surf on the Oligocene area Acacia’s light oil is produced using a production loop with pipe-in-pipe design: The 10-inch internal line is inserted into an external 16-inch carrier pipe, with a rock wool layer of about 20mm in the annulus Feeding into the loop are producers (5 by first oil) Each producer is linked to one of the three manifolds by a 6-inch jumper The manifolds are connected to the production loop by 10-inch flextails The choice of the pipe-in-pipe solution for the production loop was based on several factors, one being the need for thermal insulation to meet flow assurance criteria (incl the risk of hydrate formation on production shutdown) The fluids reach the surface through two flexible production risers using IPB (Integrated Production Bundle) state-of-the-art technology, already being utilized on the Dalia project These risers are connected to the loop, and moored on the seabed with a suction anchor The central 10-inch production line in each riser is surrounded by a crown of eighteen 1-inch tubes for gas lift injection at the foot of the risers Production and injection umbilicals Fig Pazflor 3D Cross-section - IPB riser the central 10-inch production line in each riser is surrounded by a crown of 18 1-inch tubes for gas lift injection at the foot of the risers The main production umbilical has a dynamic section between the FPSO and the first manifold, and two static sections from that first manifold on to the second and the third manifolds On leaving the manifolds, it divides into five secondary umbilicals that serve to control water and gas injections The end modules, called UTHI (for Umbilical Termination Head Injection) modules, are linked to the injection wells by flying leads FPSO, a dual processing onboard a single FPSO Fig Pazflor FPSO 84 PETROVIETNAM - JOURNAL VOL 10/2011 The Pazflor FPSO (Floating Production, Storage and Offloading), 325m long and 61m wide, has a storage capacity of 1.9 million barrels The topsides facilities installed in two parallel trains on its extensive deck are sized to process up to 220,000 barrels of crude and treat 311,000 barrels of water daily, with an injection capacity of 382,000 barrels of water and a PETROVIETNAM gas handling capacity of 4.3 million cubic metres per day The living quarters are installed on five levels and sized to accommodate up to 240 people The Pazflor FPSO is the third one on Block 17 (with Girassol and Dalia), but it will be the first to process two types of oils of very different qualities simultaneously - the heavy crude from the Miocene fields and the light crude from the Oligocene structure This specific function explains its record weight of 121,000 tonnes, with 15 topsides modules weighing in at an aggregate approximate of 39,000 tonnes, in addition to the 82,000 tonnes hull To lighten the topsides, Pazflor innovates by having the oil desalting process in the hull, using desalting tanks with a total capacity of 450,000 barrels, and the decanting of produced water from the Miocene reservoirs using two decantation tanks Two features are noteworthy contributors to the FPSO’s imposing size: + Record-breaking power-generating capacity of 120MW (versus 66MW for Dalia) required to feed the Pazflor surface and subsea installations and supplied by five 24-MW turbogenerators + The blend of Miocene and Oligocene crudes, heavier and more viscous than the Dalia oil and therefore more challenging to process, requiring more topsides capacity, notably to allow longer residence times in the separators Sustainable development 5.1 Respecting the environment 5.1.1 Greenhouse gas emissions control + Recycling vent gases from the cargo tanks using a vent gas recovery unit (VGRU) 5.1.2 Water management Although most of the produced water will be reinjected into the reservoirs, the water from Acacia, the Oligocene field (which accounts for 11% of total produced water from the Pazflor reservoirs) will be treated to lower the hydrocarbon content to less than 30ppm then discharged to the sea Because of the high barium content of the Oligocene/Acacia water, and the sulphate content of the water from the Miocene reservoirs, mixing the two would result in the formation of a barium sulphate precipitate that could clog the subsea pipes and wells Drill cuttings will also be treated before discharge to ensure they contain less than 5ppm of hydrocarbons 5.2 Developing a sustainable partnership to maximise benefits to the local community 5.2.1 Fabricating components on Angolan sites Angolan yards are making a significant contribution to the construction of project equipment For the subsea production installations, all three manifolds for the Oligocene field, including their supporting structures and closed caisson foundations, as well as the foundations for the three separation units for the Miocene fields, are being manufactured and assembled at the Sonamet Angolan yard Some components of the post first oil Christmas trees (such as upper tree frames and ROV panels) are also made in Angola The Christmas trees to be installed after first oil will be assembled and tested at the FMC base in Luanda prior to being installed offshore + Recovering heat from turbine exhaust gases via waste heat recovery units installed on three of the FPSO’s five turbogenerators Manufacturing the equipment for the Pazflor network of flowlines and umbilicals will mobilise a range of facilities: The Dande spool base (a joint venture between Sonangol and Technip); the Angoflex yard in Lobito (another Sonangol-Technip joint venture) and Sonils, the logistics base in Luanda These sites are handling the construction and assembly of Pazflor’s subsea pipelines, flowline end terminations (FLETs), in-line tees (ILTs), thermal insulation of the Miocene production flowlines, fabrication of the riser anchor piles, jumpers and virtually all of the umbilicals The offloading buoy is also being made in Angola + Using aero-derivative turbines for power generation, yielding fuel savings (natural gas or diesel) compared to conventional industrial units Several components of the FPSO - the helideck, anchors, boat landings, riser protection structures and mooring lines - are manufactured at the Sonamet yard in Project design has been tailored to the most stringent standards of air quality control, considerable efforts were directed especially at: + Eliminating flaring during normal operating conditions with reinjection of associated gas into the formation, or export to Angola LNG PETROVIETNAM - JOURNAL VOL 10/2011 85 PETROLEUM PROJECT TECHNOLOGY Lobito, contributing to the portfolio of contracts awarded to local entities in connection with the Pazflor project 5.2.2 Transferring Know-How and competencies to Angolan personnel Conclusion The Project is well under execution phase: + The offshore installation phase will start in July + The FPSO is due to sail away in early 2011 Angolan nationals will make up the vast majority of the personnel operating the Pazflor FPSO In addition to the operating personnel, Angolan engineers from TEPA and Sonangol experience this knowledge transfer through secondments to project teams, often at high leve ls of responsibility 5.2.3 Contributing to Social Development Consistent with the sustainable development policy pursued by Total E&P Angola, Pazflor supports a program that will generate progress over the long term by reducing infant and maternal mortality in Angola In partnership with the World Bank and the Angolan Ministry of Health, the Pazflor project will deploy training for 650 nurses and midwives and build or upgrade maternity clinics This fiveyear initiative is focusing on the Bengo, Malanje, Lunda Norte, Moxico and Uige provinces representing a population of 1.9 million, and has been approved by the Board of the World Bank on 8th June 2010 + The subsea separation system is undergoing an exhaustive integration and shallow water testing before the Subsea Separation Units (SSU) are transported to Angola for offshore installation By adopting the innovative concept of subsea gas/ liquids separation, Total sets a new global benchmark allowing development of new prospects in many areas of the world, while developing the local content fabrications in Angola and further committing to sustainable development actions and local communities support Pazflor confirms Total’s capacity to successfully meet the challenge of cost-effective production of highly viscous oil from low-energy reservoirs and pushes back the technological boundaries of deepwater development even further It also further highlights Total’s expertise in managing giant international projects, while fostering sustainable development actions FPSO Ruby II Photo: PV 86 PETROVIETNAM - JOURNAL VOL 10/2011 PETROVIETNAM Prospects of new energy development I nternational energy experts have generally assumed that it is difficult to imagine the world energy picture for the duration of the first half of XXI century The supply of fossil fuels is being rapily depleted, renewable energy sources have not been widely produced and used, while the world economy is experiencing “hot and cold” development Therefore, ‘new energy’ should be the energy for the century This, however, remains a dilemma for the contemporary world Wind and solar power cost too much For a long time, policy makers have realized that new energy sources are essential to compensate for depletion of existing energy resources and also to reduce greenhouse gas emissions affecting the global climate In fact, solar and wind energy now have important positions in socioeconomy in some regions of the world Some other new energy solutions have been rapidly developed or tested According to the report of the Council of Global Wind Energy (GWEC), in 2008 the world’s wind power industry grew by 28.8% Power from wind accounts for about 1.5% of global electricity production There are 80 countries tapping the wind for commercial purposes America is the leader in wind power capacity with 8,545MW, followed by China with 6,300MW The two countries account for about 30% of the total global output of 120.8MW in 2008, wind power accounting for 42% of the alternatives in the US and one-third in Asia On 03 May 2010, the Asian Development Bank (ADB) announced a Solar Energy Initiative in Asia (ASEI), which PETROVIETNAM - JOURNAL VOL 10/2011 87 NEW ENERGY aims to identify and develop massive Solar energy projects to produce around 3,000 MW within the next three years The ADB plans to offer 2.25 billion US dollars to fund the initiative and hopes this amount will increase to 6.75 billion USD in 2012 However, high cost is significantly hindering the growth of this clean energy Biofuels are in conflict with food security Experts forecast that in 2030, biofuels could account for 7% of the global demand The markets for biofuels and alternative fuels tend to thrive in many countries around the world In the context of the earth’s climate heating up due to the excessive use of fossil fuels, production of biofuels has doubled in the period 2000 to 2005 Brazil, the largest economy in South America, can produce enough ethanol to replace 10% of the world oil demand in 20 years, compared with billion gallons now Meanwhile, the EU implemented the policy to encourage use of biofuels and aims to have biofuels accounting for 5.75% of total gasoline sales in 2010 The British Government asked the oil companies Shell and BP to produce a volume of biofuels accounting for 5% of the volume of fuel they sell by the end of 2010 In Asia, Malaysia and Indonesia produce biofuels from crops of maize, sugarcane, soybean, rapeseed, palm trees, wood chips and even animal droppings Japan, the world’s third largest in energy consumption after the U.S and China, could become the leader in the import of biofuels The new generation of biofuels may bring about greater benefits than the current biofuel production due to productivity and non-food raw materials, but there is still research needed and this answer is still open to question because the expansion of plantations to provide raw materials for bio-energy production means reducing the area of agricultural land available for food production and food security is one of the hottest global issues Also, if the land is cleared to plant trees to supply raw materials for biofuel production, increasing concerns about the environment may be triggered and biodiversity may also be affected 88 PETROVIETNAM - JOURNAL VOL 10/2011 According to scientists, biofuel emits less CO2 to the atmosphere than oil, gas or coal, all of which are currently being exploited to exhaustion However, the balance will be also broken when deforestation significantly increases the amount of CO2 in the atmosphere, which will accumulate in soils and plants, causing catastrophic consequences So, after the recent global economic crisis and especially in the current circumstances, the risk of food insecurity is always imminent; and the development of biofuels derived from food crops is triggering a new contradiction which needs to be seriously considered Green technologies and energy saving In Asia, according to an annual study of economic and social conditions of Asia - Pacific, the Socio - Economic Commission of the United Nations announced on 06 May 2010, “China is playing the increasing role in promoting green technologies” In 2009, China has invested 34.6 billion USD for clean energy, up 50% over 2008, bringing the country to become the world’s largest investor in energy saving technology Meanwhile, South Korea plans to inject 84 billion into the environment- friendly industries According to the economists, in order to meet the growing global energy demand, the world needs to rapidly develop alternative energy sources This would mean that trillions of dollars of investment have to be spent to quickly bring the latest research results from the laboratories into production on a commercial scale But this is not done as much as is desired because the big energy companies are using the huge profits earned due to rising energy prices on their plans to exploit petroleum resources in the Alaska, Arctic, Gulf of Mexico, and Atlantic Ocean Thus, although the science and technology is continuing to develop, the search for alternative energy sources will take at least from 20 to 25 years As a result, oil disputes will be complicated and volatile oil prices will continue to affect the global economy Nguyen Nham PETROVIETNAM PETROVIETNAM NEWS Vietnam investment opportunities - energy and finance of Petrovietnam Nguyen Tien Dung and Nguyen Quoc Khanh, Vice President of VCCI Pham Gia Tuc and nearly 100 participants representing the US private sector and the Vietnamese Government Dr Nguyen Tien Dung - Vice President of Petrovietnam spoke at the Investment Promotion Conference entitled “Vietnam Investment Opportunities - Energy and Finance” Photo: PVN P etrovietnam, the Chamber of Commerce and Industry (VCCI) and the United States Chamber of Commerce (USCC) co-organized an investment promotion Conference entitled “Vietnam Investment Opportunities energy and finance” in Washington D.C., on September 15, 2011 This is the first time Petrovietnam has conducted an investment road-show in the US and expects to establish a great network with the US business community as well as to develop a long term business partnership with US companies The conference was chaired by the Minister of Industry and Trade Vu Huy Hoang Present at this conference were the Vietnam Ambassador to the US Nguyen Quoc Cuong, Vice President of USCC Tami Overby, President of US Asean Business Council Alex Feldman, Vice Presidents The main subject of the conference was to introduce the investment opportunities in Energy and Finance in Vietnam generally and with Petrovietnam particularly This conference introduced 26 Petrovietnam’s projects in the fields of down/midstream, power generation, infrastructure and equity These include key national level projects such as Dung Quat and Long Son refineries, Nam Con Son gas pipelines, Quang Trach and Long Phu coal - fired power plants, and other important projects such as Binh Thuan wind farm, Van Phong Petroleum industry service base, Phuoc An port, Dung Quat shipyard, Petrovietnam Tower, equity investment in Petrovietnam Gas and Petrovietnam Finance Corporation The conference witnessed the signing ceremony of a cooperation agreement between Mc Kinsey & Company and Petrovietnam In addition, Petrovietnam organized roundtable meetings in New York City and Houston to exchange ideas and discuss the above projects with interested US companies, amongst which were some institutions and business groups such as the US Exim bank, Overseas Private Investment Corporation (OPIC), New York Stock Exchange (NYSE), Houston Port Authority, Goldman Sachs, TPG Capital, Morgan Stanley and Mc Kinsey & Company Ngoc Linh PTSC signed loan agreement for FSO “PTSC Bien Dong 01” project O n September 27th, 2011, in Singapore, Petrovietnam Technical Services Corporation (PTSC) and its partners, Yinson Holdings Berhad, United Oversea Bank Limited (UOB), Oversea-Chinese Banking Corporation Limited (OCBC), signed the Mandate Letter for USD 105 million Loan Agreement for the new building project of FSO “PTSC Bien Dong 01” President Truong Tan Sang and Singapore’s leaders witnessed the signing FSO “PTSC Bien Dong 01” with a storage capacity of 350,000 barrels per day will be installed and operated at the Hai Thach & Moc Tinh fields in Blocks 05.2 and 05.3 offshore Vietnam This is the first FSO project that PTSC will undertake as EPC Contractor and perform all project phases of new-building, commissioning, towing to site, offshore installation, hook-up, and operation & maintenance during some 20 years Kien Pham PETROVIETNAM - JOURNAL VOL 10/2011 89 NEWS Petrovietnam launches drilling rig, oil platform The first 90m water-depth jack-up drilling rig of Vietnam Photo: N Duc O n September 10th, the Vietnam National Oil and Gas Group (Petrovietnam) launched the first 90m water-depth, jack-up drilling rig and the Moc Tinh production platform at the Vung Tau Petroleum Port President Truong Tan Sang joined leaders of ministries and agencies and representatives from the Russian Embassy and the Russian Consulate General in Vietnam at the launching ceremony, which was held on the occasion of The 50th Anniversary of the Traditional Day of the Vietnam Petroleum Industry (Nov 27) The drilling rig is a key national mechanical project with Petrovietnam as the investor and Petrovietnam Marine Shipyard (PV Shipyard) as the EPC contractor After a 26-month fabrication period, PV Shipyard announced its successful load-out of the first “fabricated in Vietnam” 90m jack-up rig The rig will weigh almost 12,000 tons when fully finished, in which 9,685 tons is of structural materials, 950 tons of piping system and 1,748 tons of electrical, electronic devices Vietnam has become one of the three countries in Asia and of the ten nations worldwide to build jack-up drilling rigs of international standards recognised by the American Bureau of Shipping (ABS) At the ceremony, Vietsovpetro signed a contract with PV Shipyards, under which another 90m jack-up drilling rig will be built by them later As one of the key national projects, the Moc Tinh production platform is designed and manufactured by Petroleum Equipment Assembly and Metal Structure JSC (PVC-MS) This is the largest oil platform in Vietnam with a total weight of over 14,000 tons Kim Minh Agreement signing with 13 Trade and Industry Departments in Mekong Delta region O n October 3rd 2011, a delegation of Sojitz Corporation visited and worked at the headquarter of Petrovietnam Fertilizer and Chemicals Corporation (PVFCCo) At the meeting, both parties had open discussion to promote further cooperation and exchange of experience in sales and export of urea, NPK fertilizer in foreign markets Sojitz offered an invitation to PVFCCo to visit NPK fertilizer production technology and technical assistance cooperation in the construction and operation of NPK plant PVFCCo just signed a cooperation agreement with the Trade and Industry Department in 13 provinces/cities in the Mekong Delta region in order to strengthen the cooperation in products transport to rural areas Beside Petrovietnam Fertilizer and Chemicals Corporation, the agreement was jointly signed by one group, three corporations, one cooperative union and one Trade and Industry association Under this agreement, all the parties undertook to strengthen the cooperation in Vietnamese products transport to rural areas, industrial parks, export 90 PETROVIETNAM - JOURNAL VOL 10/2011 The Ca Mau Fertilizer Plant Photo: DPM processing zones in 13 provinces and cities in Mekong Delta region This agreement was signed in the spirit of voluntary cooperation with the witness of the Trade and Industry Ministry’s leaders and People’s Committee of Hau Giang province Prior to this event, in the framework of this program, on May 8th 2011, Petrovietnam Fertilizer and Chemicals Corporation signed the cooperation agreement with the Trade and Industry Department in 13 provinces and cities in the Red River Delta and North Central region Thuy Nguyen PETROVIETNAM PVEP and partners sign EPC-1 contract in Algeria Field Development Phase I (EPC-1) with Japan’s JGC Corporation/JGC Spa Algeria Within 31 months, Groupement Bir Seba will build an oil processing centre with a capacity of 20,000 barrels per day, a compressing plant to transfer fuel from the Bir Seba oil field to Hassi Messaoud city with a daily capacity of million cubic metres, two 130km-oil pipelines, a water separating plant and a power plant at the oil field in the south of Algeria PVEP and two partners sign EPC-1 contract in Algeria Photo: PVEP Groupement Bir Seba (GBRS), a joint venture company between Algerian National Oil Company (Sonatrach), Petrovietnam Exploration Production Corporation (PVEP) and Thailand’s PTT Exploration Production Corporation Pcl (PTTEP) signed an EPC Contract for the installation of oil processing facilities, oil and gas export pipelines and industrial base infrastructure for Bir Seba Bir Seba field belongs to blocks 433a & 416b, Touggourt, Algeria, for which a Production Sharing Contract was signed in July 2007 between PVEP and SONATRACH At present, the parties to the contract has been extended to PTTEP, apart from the initial partners This is the first overseas venture that PVEP has played the role of an operator In February 2009, a joint venture Groupement Bir Seba was established by the contract parties to implement field development work This is an important step in the partners’ joint efforts to speed up the production of Bir Seba to the first quarter of 2014 Thu Huong PVFC successfully arranged a USD 32 million project of Dung Quat Refinery P etrovietn am Fi n an ce Cor p o t i o n ( P V F C ) h a s successfully arranged USD 32 million for the additional project of crude oil pumping system No and two crude oil storage tanks and at Dung Quat Refinery In the afternoon of Sept 29th, 2011, in Quang Ngai city, the credit contract was signed between the investor Binh Son Refinery and Petrochemical Company (BSR) and Vietcombank’ Quang Ngai branch - the finance sponsor This successful arrangement confirmed the role of PVFC in funding arrangements for Petrovietnam projects in general and BSR in particular Earlier, PVFC has committed a credit of USD 60 million of working capital for BSR PVFC will also, quickly and timely, arrange finance and credit for BSR to meet BSR’ demand for working capital and capital investment Ngoc Anh Dung Quat Refinery Photo: BSR PV Drilling signed the contract for the provision of jack rig services to PVEP POC Petrovietnam Drilling and Well Services Corporation (PV Drilling) officially signed a contract for the provision of jack up rig Key Hawaii to PVEP POC’s drilling campaigns Along with efficiently operating the drilling rigs that are wholly owned, PV Drilling is intensifying cooperation and joint venturing with international oil contractors to provide the services for oil companies that are operating in Vietnam This is a new opportunity for PV Drilling to enhance its professionalism in drilling rig services provision and increase the market share for this type of service in Vietnam Thai Hoa PETROVIETNAM - JOURNAL VOL 10/2011 91 PETROLEUM MARKET ANALYSIS AND FORECAST EMC petroleum market analysis and forecast EMC provides detailed methodology and forecasts for crude oil, LPG and Urea prices by quarter and months remaining in 2011 The forecast trend of crude oil prices is down from the previous quarter, but those for LPG international price and Urea domestic retail prices increased slightly for the next three months Crude oil price forecast 1.3 Forecast result 1.1 Forecast methodology The estimated outcomes showed that Minas and Tapis prices will continue the declining trend in the first half of 2012 and slightly bounce back in Q3/2012, and decrease again in Q4/2012 Essentially, the prices of crude oil types in the world are related intimately to each other Crude oil pricing is commonly based on the distinguishing specfications (heavy/light, sweet/sour ), or geographic differences… - World oil demand growth in Q4/2011 and 2012 is forecast to weaken significantly as global economy growth is expected to be low, and there are not many optimistic signals from the U.S economy In addition the sovereign debt crisis in Europe continues to worsen and may turn into a comprehensive crisis The historical oil price during more than 150 years showed a close relationship of different oil types regardless of which pricing mechanisms were used Recently, the Research Center for Petroleum Economics and Management - Vietnam Petroleum Institute (EMC - VPI) has gathered statistics on average quarterly prices of some benchmarks (Brent, Dubai, WTI, Minas, Tapis) over the period of QI/2006 to QIII/2011 (a total of 23 observervations) to undertake research on the relationship between the oil prices (Fig 1) - Oil supply, especially sweet oil supply, is more likely to stabilize with the return of production in Libya (Production is estimated at 600,000 barrels/day in the first half of 2012 and million barrels/day in the second half ) 1.2 Model analysis EMC uses regression analysis to forecast the Minas and Tapis crude oil price for the fourth quarter of 2011 and the quarters in 2012 The estimation results suggest that: - For the Minas crude price forecast: Dubai and Brent crude oil prices have the greatest impact If Dubai and Brent crude rose USD/ barrel, the Minas oil prices would increase by about 0,66 and 0,34 USD/ barrel - For the Tapis crude oil price: Brent crude oil prices have a direct impact If the price of Brent crude oil rose USD/ barrel, the price of Tapis oil would go up about 0,98 USD/barrel 92 PETROVIETNAM - JOURNAL VOL 10/2011 (Sources: WM, EIA) Fig Oil prices over the period of QI/2006 - QIII/2011 Table Minas and Tapis price forecast 2011 - 2012 (USD/barrel) (Source: EMC - 2011) PETROVIETNAM However, the forecast results may lose accuracy in the presence of some factors such as geopolitical risks (increasing political instability in the Middle East-North Africa ); weather (natural disasters ) - LPG price in the past: from analysis of data series of LPG prices in the past, EMC realizes that the LPG price in any month considerably affects that of following months, the correlation level is calculated to be approximately 0.92 LPG - The above input data for forecasting were collected monthly (from January 2006 to August 2011) from Purvin & Gertz organization Based on model analysis and checking for the accuracy of forecast result, a multiple regression model with lagged variable of input factors was chosen 2.1 Forecast methodology Based on the theory of supply - demand relationship in LPG market and energy-economic constraints in reality, some quantitative factors are chosen to be put in the forecast model - Crude oil price: Survey on the basis of real data shows that changes in crude oil and LPG prices are similar (Fig 2); the correlation test of these two factors also shows that the correlation level is approximately 0.9 - LPG Supply in Middle East: The LPG price has a close connection with available supply: whenever LPG supply from the Middle East decreases, the LPG price increases and vice versa (Fig 3) Fig Relation between LPG price and crude oil price 2.2 Model analysis From the historical data set, EMC uses Eviews software to estimate multiple regression model to forecast price of propane and butane Results are presented as following: - The factors having the greatest impact on LPG price is the crude oil price According to the forecast model, if the crude oil price increases (or decreases) by USD/ barrel, in the following month the propane price will correspondingly increase (or decrease) by 5.78 USD/ ton and the butane price will increase (or decrease) by 5.82 USD/ton The relationship between oil price and LPG price is covariant, which is totally suitable to the reality - The second factor having impact on the propane and butane prices are their own prices in one preceding month For propane, if its price last month increased (decreased) by USD/ton, the propane price in the current month would increase (decrease) by 0.91 USD/ton; for butane, that number would be 0.81 USD/ton As a result, if we only take into account the impact of the LPG price on its own price in the future, without consideration of other factors, the relationship would be covariant - Although according to the model, the factor of supply only has little impact on the propane and butane price, according to economic theory, this is an important factor Therefore, it is retained in the model by EMC The sign of coefficient of the LPG supply variable is negative; this means the relationship between supply and price is contravariant As a result, it is totally suitable to both the theory and reality 2.3 Forecast result Fig Relation between LPG price aand exported amount On the basis of the estimated model, in order to forecast LPG contract price (including butane PETROVIETNAM - JOURNAL VOL 10/2011 93 PETROLEUM MARKET ANALYSIS AND FORECAST Fig Scenario of crude oil price and exported amount of LPG from Middle East Kton 4.000 USD/barrel 130 120 3.500 110 3.000 100 2.500 90 80 2.000 70 1.500 60 Middle East Export Volume Forecast (High Case) Arab light Oil Price forecast (High case) Middle East Export Volume Forecast (Low Case) Arab light Oil Price forecast (Low case) StaƟsƟc StaƟsƟc Fig Forecast result of LPG price according to scenarios and propane), it is necessary to have input data (oil price, supply) in the future, therefore an intermediate forecast is needed to identify those input scenarios For crude oil price, EMC referred Arab light oil price of Purvin & Gertz: In which, from September to December 2011, the price fluctuated in the range of 104.5 - 107.15 USD/barrel; in 2012, the price would fluctuate from 107.65 - 111.54 USD/barrel For supply amount, depending on reality and historical data, EMC constructed a monthly forecast model in which monthly exported amount fluctuates from 2,370 to 3,264 thousand ton (Fig 4) The forecast result of LPG price is presented in Fig.5 according to the two scenarios identified above According to the forecast result, the average propane contract price in the fourth quarter of 2011 would fluctuate in the range of USD 848 - 951/ton, that of butane would be 877 - 981 USD/ton 2.4 Evaluation of forecast result The above forecast result indicates that changes in 94 PETROVIETNAM - JOURNAL VOL 10/2011 LPG price depend on the crude oil price and the supply amount from the Middle East At the same time, it also reflects the seasonality being comparable to the reality in the past However, due to the dependency on the Arab Light crude oil price, as forecast by Purvin & Gertz, the range of fluctuation of the LPG price is large In addition, the LPG contract price also depends on other factors which have not been measured yet or are not measurable to be included in the model such as political conditions, global financial conditions, disasters and etc Therefore, our forecast has a minor error as compared with the actual prices Table Forecast result of LPG contract price in the fourth quarter 2011 according to scenarios PETROVIETNAM Urea 3.2 Model analysis 3.1 Forecast methodology With R2 = 90%, the result of analysis model indicated that almost all input factors have a significant statistical effect However, the seasonal factor was not meaningful statistically because the lag of price included the seasonal factor EMC chose some factors that impact on the urea retail price based on the relationship of supply, demand and price These include: - Urea import price: the domestic price is much impacted by import prices, even domestic producers value their products also based on import price Import price and retail price therefore have a very high correlation (approximately 80%) by correlation test - Lag of price (past price): Survey of past retail price data in Vietnam indicates the prices have a huge impact on the prices in the next period, the result of correlation test approximates to 98% - Seasonal factor: retail price is impacted by the agricultural seasonability By survey on price data of three regions, EMC identified that the retail price was highest in June and lowest in January and February - Other factors such as farm product price, cultivated area and etc… However, these were not put in the model because of lack of statistical data The statistical data of the 2005 - 2011 period were collected from various sources such as monthly reports of the Ministry of Industry and Trade, data of customs offices and the Ministry of Agriculture EMC identified that the most appropriate model is the multiple regression model to forecast the retail price of urea product The lag of price is the strongest factor impacting on the retail price In the case of the other factors being unchanged, if the price of the previous month increases (or decrease) 1VND/kg, the price of the succeeding month will increase (or decrease) 0.92 VND/kg in the North, 0.83 VND/kg in the Middle and 0.88 VND/Kg in the South The second factor impacting on the retail price is import price In the case of the other factors being unchanged, if the import price increases (or decreases) VND/Kg, the retail price will increase (or decrease) 4.1 VND/kg in the North, 5.6 VND/kg in the Middle and 6.1 VND/kg in the South The relationship of the import price and retail price is covariant and consistent with the theory and practice 3.3 Forecast result According to the analysis model above, to forecast the retail price of urea in the future, the prediction of import prices is needed as input data Therefore, it is necessary to make an intermediate forecast: prices based on import prices of Urea in international markets (especially the Chinese market) with data collected from datum of Fertecon organization The results of intermediate prediction are shown in the figures below According to the figures, the average import price in the fourth quarter of 2011 ranges from 387 to 401 USD/ton while in 2012 the average import price in the fourth quarter fluctuates with the minimum at 398 and the maximum at 406 USD/ton, the price in the second quarter is from 388 to 397 USD/ton Fig Intermediate forecast results of urea import price The results from forecast model for urea retail price in regions are shown below (Fig 7) with the low and high scenarios corresponding to the input scenarios As a result, the urea retail price in the Northern region’s average in Q4/2011 range from 9,000 - 9,200 PETROVIETNAM - JOURNAL VOL 10/2011 95 PETROLEUM MARKET ANALYSIS AND FORECAST Fig Urea forecast results for regions VND/kg, for the Central region 8,600 - 8,800 VND/kg and in the South 8000 - 9,000 VND/kg The average price for every quarter in 2012 of the North - Central South respectively ranged from 9,400 - 10,000 VND/kg; from 8,800 - 9,400 VND/kg; from 8,800 - 9,700 VND/kg Table Urea forecast results for scenarios and regions in Vietnam (Unit: VND/kg) 3.4 Evaluation of forecast result The forecast results closely reflect the increasing price trend because of rising inputs price (for instance, electricity price, gas price… and higher urea import price) However, the forecast results depend on a 96 PETROVIETNAM - JOURNAL VOL 10/2011 lot of factors such as weather and the production of agricultural products and these are factors that cannot be measured and are not included in the model, so the error for urea retail price may be quite large if the above factors are unfavorable Thanh Luan, Thanh Hoa Tien Quyet, Thu Ha ... (9: Fe-MFI A-1, 10: Fe-MFI A-2, 11: Fe-MFI B-1, 12: Fe-MFI B-2, 13: Fe-MFI C-1, 14: Fe-MFI C-2, 15: Fe-MFI D-1, 16: Fe-MFI D-2) Fig SEM images of i) Cogel B, ii) Fe-MFI B-2 PETROVIETNAM - JOURNAL... Molecular physics 28(3): p 66 5-6 82 37 http://www.ifp.fr/actualites/communiquesde-presse/prosim-et-l-ifp-signent-un-accord-pour-lavalorisation-du-modele-thermodynamique-pc-saft cited 38 Danesh, A.,.. .PETROVIETNAM PETROVIETNAM - JOURNAL VOL 10/ 2011 PETROLEUM EXPLORATION & PRODUCTION PETROVIETNAM - JOURNAL VOL 10/ 2011 PETROVIETNAM Petrovietnam’s leaders accompanied