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Feb 27, 2018 / 13:51

PTSC enters US$100-million joint venture with Yinson

Ngoc Thuy

PetroVietnam Technical Services Corporation (PTSC) and Yinson Clover Ltd. (YCL), a subsidiary of Malaysia`s Yinson Holdings, have entered an agreement to establish a joint venture, PTSC Ca Rong Do Ltd. (Red Dragon Fish), with the total investment capital of US$111.62 million.

According to a statement, PTSC will own 51% of the JV (US$56.93 million), while YCL will hold the remaining US$54.69 million. The JV will be headquartered on the Marshall Islands. 
 
Illustration photo.
Illustration photo.
Both companies will jointly undertake the execution and performance of the bareboat scope of the work, including the bareboat charter of the Floating, Production, Storage and Offloading services (FPSO) under the time charter contract. 

The Ca Rong Do Field project has been approved by the Vietnamese government in April 2017. Malaysia's Yinson earlier secured an FPSO contract with Talisman Vietnam, a subsidiary of Spanish oil company Repsol, and is currently the operator of the Ca Rong Do Field. 

The project is located at block 07/03 of Nam Con Son Basin. The development concept includes a tension-leg wellhead platform tied back to a floating production, storage, and offloading vessel.

The floater will have a processing capacity of 25-30,000 barrels of oil per day, plus 60 million cubic feet of natural gas per day. It will be capable of storing about 500,000 barrels of oil and be moored to the seabed by a fixed internal or external turret system.

The platform will float in water depths of up to 350 meters and host up to 12 wells, including oil producers, a water injector, and a gas injector.

The contract is for 10 years with five extension options. According to Yinson, the total value of the bareboat charter is approximately US$1 billion. The other partners in the field are PetroVietnam, Mubadala Petroleum, and Pan Pacific Petroleum.

The gross best estimate of potential recovery from Ca Rong Do is 45.3 million barrels of oil, 172 billion cubic feet of gas, and 2.3 million barrels of condensate, according to Pan Pacific Petroleum.

That said, the Ca Rong Do project is expected to generate a steady stream of revenue from the first quarter of 2020, with an after-tax profit of VND180 billion (US$7.9 million) per year, according to a report by KIS Vietnam Securities. 

2017 was the third consecutive year that PTSC saw declining revenue and profit due to decreasing work volume and contract value. However, the company still reported an after-tax profit of VND801 billion (US$35 million), exceeding the target set by the shareholders, according to PTSC's financial statement.  

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