Oil and gas to Vietnam

Trends and opportunities

The market

Oil and gas is the top priority sector for economic growth and energy security for Vietnam and the country has great potential in production reserves. Vietnam is ranked 28th of the 52 countries that have proven oil and gas reserves (Source: BP Statistical Review of World Energy, 2016).

At the end of 2015:

  • The total proven oil reserve of Vietnam was 4,400 million barrels, amongst the highest in Southeast Asia.
  • Vietnam’s natural gas reserves was 707 billion cubic meters, ranked third in Southeast Asia after Indonesia and Malaysia (Source: BMI Research, Vietnam Oil and Gas Report Q4 2016).
  • In terms of oil production capability, Vietnam was ranked fourth in Southeast Asia with 336 thousand barrels/day after Indonesia, Malaysia, and Thailand.
  • The country is ranked fifth in Southeast Asia in term of gas production capability with 10.7 billion cubic meters/day, after Indonesia, Malaysia, Thailand, and Myanmar (Source: BP Statistical Review of World Energy, 2016).

The majority of Vietnam's oil and gas reserves are located offshore in the Cuu Long and Nam Con Son basins, in the south of Vietnam. The government has been trying to attract investment into exploration and production in new deepwater blocks as oil and gas consumption growth continues to run ahead of production.

Vietnam’s crude oil production capability is forecast to decline significantly from 2019 as this is the natural decline at aging fields such as White Tiger, and will subsequently impact the Vietnam crude oil export revenue. The White Tiger field has been explored for thirty years, and since 2005 it reached declining stages. Although PetroVietnam (PVN) has explored and exploited fourteen small and marginal fields during 2006-10, these new fields cannot offset the declining output from the White Tiger. Crude oil export will steadily decrease over 2016-2017 and swing into deficit from 2018, an average crude import of 155,000 barrels per day is expected over the 2018-2025 period (Source: BMI Research, Vietnam Oil and Gas Report Q4 2016).

Similar to oil production, Vietnam will see considerable shortage of gas supply in 2020. The country has been  producing as much natural gas as it consumes, and in the near future while demand for gas continues rising steadily, production will drop gradually from 2018 (Source: BMI Research, Vietnam Oil and Gas Report Q4 2016). PetroVietnam Gas estimates gas shortage will reach six billion cubic meters in 2020 and rise to 15 billion cubic meters in 2025.

The government plans to import Liquefied Natural Gas (LNG) to meet the increasing energy demand of the country. Due to its cleaner attributes, LNG holds a bright prospect when Vietnam is committed to cutting down on greenhouse emission. Importation of LNG also requires development of LNG receiving terminals, a pipeline distribution network, and associated facilities.

The Government of Vietnam controls the upstream segment and the downstream has been opened to foreign companies. PVN is the national oil company and consistently ranks as one of the country's top five tax payers. In the upstream segment, international oil companies (IOCs) are allowed to independently explore for oil and gas. While the presence of PVN is required in all producing projects, IOCs are allowed to hold majority stakes and receive a share of output. The downstream segment is also dominated by PVN’s subsidiaries such as PV Oil, PV Gas, and Binh Son Refinery and Petrochemical as the first refinery under operation and has now been opened to private sector and foreign companies for equity participation.

Fuel wholesaling is carried out by government run companies, besides PV Oil, all of which have been licensed to import petroleum products, such as:

  • Petrolimex, the country's largest fuel importer and distributor, under the Ministry of Industry and Trade
  • PetroVietnam Trading Company (Petechim) and PETEC, PV Oil’s subsidiaries
  • Military Petroleum Company under the Ministry of Defence
  • Saigon Petro covering the South Central Vietnam and Mekong Delta market.

The refinery and petrochemical industry is a growing sector in Vietnam The government ambitiously aims to develop Vietnam into a refinery hub of choice in the region, and sets the refinery capacity to treble over the next five years with Vung Ro and Nghi Son refinery projects coming online.

The second refinery - Nghi Son project, a joint venture between PVN, Kuwait Petroleum International, Idemitsu and Mitsui Chemicals is in the construction stage with expectation to be in operation by 2017 at a design capacity of 10 million tons of crude oil per year with possibility to increase the capacity to 20 million tons. The refinery project will also include a petrochemical complex, energy facilities, pipeline and storage systems. In addition to LPG, unleaded gasoline, kerosene, jet fuel, diesel and fuel oil, the refinery is projected to produce bitumen, propylene and BTX as a raw material for the petrochemical industry.

Gas fired power generation is also becoming an important contribution to Vietnam energy market.


Under its World Trade Organization commitments, the Vietnamese government has opened its oil and gas sector to foreign companies, which it hopes will bring in capital, expertise and technologies to help achieve the country’s major industry goals.

In its restructuring scheme PVN plans to focus on five crucial areas including:

  1. exploration and production
  2. refinery and petrochemical
  3. gas industry
  4. power generation
  5. oil and gas technical services.

Vietnam’s expanding offshore exploration and production has created a steadily growing market for oil and gas equipment and services. Opportunities exist in the following areas:

  • search, survey and exploit in deep offshore water
  • EOR: boost oil recovery from mature fields through advanced technologies
  • technologies to optimise E&P in deep-water fields, processing of natural gas
  • EPC, consulting services for deep-water field development.

In the downstream sector, opportunities can be found in a number of areas including:

  • consulting services to establish competitive gas market
  • investment in LNG terminal, power plant, and refinery projects
  • EPC, consulting services for LNG terminal development, gas pipeline system, and combi-cycle power plants
  • services and equipment supplies for the aforementioned projects
  • supplying LNG
  • technical training, corporate and executive training across upstream and downstream sectors.

Competitive environment

There are international interests in the Vietnam oil and gas market, with existing international players in both upstream and downstream. In the upstream, there are more than 30 international stakeholders operating through production sharing contract, business cooperation contract, joint venture, joint operating contract with PVN and its subsidiaries (PetroVietnam Exploration and Production).

In the upstream, foreign businesses with a presence in the oil and gas market include:

  • Australia: Santos, Pan Pacific Petroleum
  • Italy: Eni
  • Japan: MOECO, JX Nippon
  • Korea: SK Energy
  • Malaysia: Petronas, SapuraKencana
  • Russia: Rosnesf, Gazprom
  • Spain: Repsol
  • United Kingdom (UK): Premier Oil, Soco
  • United States (US): Murphy Oil, ExxonMobil.

In the downstream, companies from Japan, Kuwait, Russia, Thailand, UK and US have interests in the refinery and petrochemical sector. PVN is calling for more foreign investment into the segment.

Tariffs, regulations and customs


Permits are awarded on a bilateral basis, with no regular upstream bidding rounds. Vietnam's Petroleum Law offers a more open and transparent licensing round scheme, through which exploration and production projects are offered to international investors.

Marketing your products and services

Market entry

Australian companies need to keep regular contact with key market players in Vietnam and identify projects at an early stage. Companies should also maintain good relations with end-users to help identify the right distribution channels.

A complicated transaction system and strong competition are the main barriers to doing business within the sector in Vietnam. Language can also be a barrier to market entry.

Links and industry contacts

Government, business and trade

Ministry on Industry and Trade (MoIT)
Oil and Gas Vietnam Exhibition – OGAV
Vietnam Oil and Gas Group – PVN

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