Italian energy giant
) has farmed in two exploration blocks, in the Song Hong and Phu
Khanh basins in the Gulf of Tonkin, offshore Vietnam -- an emerging
southeast Asian market.
Eni's wholly owned subsidiary, Eni Vietnam, has acquired a 50%
interest in Block 105-110/4 and Block 120 from Australia's Neon
Energy Ltd. and Singapore-based KrisEnergy Ltd. Both Neon and
KrisEnergy have sold their 25% stakes to Eni. Subsequent to the
farm out, Eni will hold 50%, while Neon and KrisEnergy will hold
25% each, in both the blocks.
Eni, in return has agreed to fund the expenses for gathering 800
square kilometers of 3D seismic in Block 105 and a 155 mile (250
square kilometer) shoot over Block 120.
Per market sources, Eni will be responsible for performing the
initial technical job and pay the full cost of the first
exploration well in each of the two blocks. The drilling time of
the wells, expected to start after the seismic tests and rig
availability, has not been disclosed.
Spanning across 5,262 miles (8,469 square kilometers) in
Vietnam's offshore Phu Khanh basin, Block 120 is identified as
having 12 oil leads with prospective resources of 633 million to
7.9 billion barrels.
Block 105 spreads over 4,468 miles (7192 square kilometers) in
the Song Hong basin, off north-central Vietnam, and it is estimated
to comprise seven gas and condensate leads with risk-free
prospective gas in the range of 1.7 trillion to 21.4 trillion cubic
The government of Vietnam is offering investment incentives to
foreign companies capable of drilling offshore and to those keen on
sharing technology with state-owned PetroVietnam, which lacks these
Vietnam is on the threshold of becoming the next exploration hub
in Asia. The region's focus on finding commercial oil and gas would
aid in meeting future energy demands. The companies holding in the
high quality exploration blocks with immense potential that remain
largely unexplored bode well going forward.
Eni, which faces competitive threats from
), holds a Zacks #3 Rank that translates into a Hold rating for a
period of one to three months. Longer term, we maintain our Neutral
recommendation on the stock.
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