JOGMEC to fund exploration in two blocks offshore Vietnam
Japan Oil, Gas, and Metals National Corporation (JOGMEC) will provide equity financing to Special Purpose Companies (SPC), to be established by Japanese companies Idemitsu Kosan Co., Ltd. and Sumitomo Corporation respectively, which acquired participating interests in the exploration Blocks 39 and 40/02, offshore Vietnam.
Idemitsu’s participating interest as the operator of the blocks is 75%, and Sumitomo has 25% interest.
According to JOGMEC, Idemitsu and Sumitomo signed the Production Sharing Contract (PSC) with Vietnam Oil and Gas Group (Petrovietnam), a state enterprise of Vietnam, for offshore South West Vietnam Blocks 39 and 40/02 on August 11, 2015. The blocks lie in water depths of 50-60 meters and comprise area of approximately 11,620km².
JOGMEC will provide equity capital up to 50% covering the exploration expenditures incurred by the subsidiaries of Idemitsu and Sumitomo for the project. JOGMEC said that estimated amount of equity financing of Idemitsu and Sumitomo is approximately JPY 5.7 billion ($45 million).
Within the framework of JOGMEC’s Cooperative Overseas Surveys and Studies Program, under the Joint Study Agreement between JOGMEC and Petrovietnam, Idemitsu and JOGMEC carried out recording of 2D seismic data and geochemical studies in offshore southwest Vietnam from October 2011 to August 2013. As a result, Idemitsu exercised the exclusive right to negotiate with Petrovietnam regarding the PSC with receiving Sumitomo as a partner. Finally, both Japanese companies and Petrovietnam concluded the PSC, JOGMEC said.
“It is a significant achievement and outcome of JOGMEC activities that the Cooperative Program has immediately contributed to the acquisition of exploration acreage, where, furthermore, JOGMEC continues to be involved through its equity financing. Through the support of JOGMEC, it is expected to enhance upstream activities for Idemitsu and Sumitomo in Vietnam as well as reinforce Japan’s energy security when successful,” JOGMEC said in its press release.