Kuwait says poised to nab Vietnam oil deal
CAIRO - CAIRO (AP) — Kuwait's oil minister said Thursday he expected the country's state-run foreign oil exploration company to win another offshore license in Vietnam by the end of the year, in what would mark the energy rich Gulf state's latest push into Asia.
Sheik Ahmad Al Abdullah Al Sabah told the official KUNA news agency that Petrovietnam had proposed the licensing agreement, but provided no further details about the expected deal with the Kuwait Foreign Petroleum Exploration Company, a subsidiary of the state-run Kuwait Petroleum Corp.
Al Sabah is in Vietnam on a six-day visit aimed at boosting energy links between the two countries.
His comments come less than a month after Malaysia-based independent oil company Mitra Energy Ltd. announced that it, along with partners KFPEC and Singapore Petroleum Corp., had completed a seismic survey of Blocks 19 and 20 off Vietnam's coast.
KFPEC has already signed a pair of production sharing agreements with two companies for the blocks and owns a 40 percent stake, according to Mitra.
If the new deal with Petrovietnam goes through, it would mark an expansion in Kuwait's presence in Asia.
Arab OPEC members from the Gulf have pledged billions in investments in the region to expand their presence in a market where crude demand has been relatively robust — at least compared to the West — despite the global economic recession.
Kuwait, which is an OPEC member, has already teamed up with Petrovietnam and two Japanese firms for a planned $6 billion, 200,000 barrel per day refinery and petrochemical venture in the Southeast Asian nation. Under the terms of the refinery joint venture set up in April 2008, Kuwait and Japan's Idemitsu Kosan Co. each retain a 35.1 percent stake, while Petrovietnam holds a 25.1 percent share and Japan's Mitsui holds the remaining 4.7 percent.
Al Sabah pledged earlier in his trip that Kuwait — which sits atop roughly 10 percent of the world's proven oil reserves — would provide a stable, long-term supply of his country's crude for the planned refinery, which is expected to be built about 180 kilometers (112 miles) south of the capital, Hanoi.
The plant is expected to be operational by 2013, and its capacity could be doubled to 400,000 barrels per day down the line if demand is enough, according to KUNA.
In May, Al Sabah signed a long-awaited agreement with china to build a $9 billion oil refinery in southern China's Guangdong province.
OPEC powerhouse Saudi Arabia has also been heavily involved in the region. The state-run Saudi Aramco, U.S. giant Exxon Mobil and China Petroleum & Chemical Corp. have both a refining and ethylene joint venture in Quanzhou, a city in Fujian province, south of Shanghai.
Separately on Thursday, the drilling arm of the United Arab Emirates' main state oil company awarded a contract for drilling rigs to a Chinese oil patch equipment provider.
The Gulf state's National Drilling Co., part of the government-run Abu Dhabi National Oil Co., said the 800 million dirham ($218 million) deal with Baoji Oil Field Machinery Co. covered the construction of multiple onshore drilling rigs, according to a statement released to the press by state news agency WAM.
Baoji is part of the state-run China National Petroleum Corp.
ADNOC's production accounts for nearly all of the Emirates' oil exports, which the government is working to increase.
The Gulf state is home to the world's fifth largest reserves of conventional crude oil and ranks among OPEC's top five exporters.
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AP Business Writer Adam Schreck in Dubai, United Arab Emirates
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