HANOI -- A Vietnamese-Russian joint venture has begun crude oil production at a new site in the South China Sea, a project expected to contribute more than $1 billion to Hanoi's coffers by 2032.
Vietsovpetro, controlled by state-owned PetroVietnam Exploration Production and its Russian counterpart, is working at an oil field 160 km off the southern coast of Vietnam. The site is near Vietnam's largest oil field, Bach Ho, also operated by Vietsovpetro. But the field is outside the so-called "Nine-Dash Line," an area of the South China Sea where China presses its territorial claim.
Daily yields are expected to top 230 barrels.
Vietsovpetro owns a 55% stake in the field, along with PVEP at 30% and Vietnamese real estate enterprise Bitexco Group at 15%. This field represents Vietnam's first new site in several years, according to local media, as local oil development stalled.
Output at Bach Ho began in 1986, making Vietnam one of Asia's leading oil producers. But the country's output has continued to fall after peaking in 2004, as production at Bach Ho decreases. As a result, Vietnam is thought to have become a net importer of oil around 2010.
Hanoi plans to explore for more oil within the country's exclusive economic zone in the South China Sea. But China has asserted its jurisdiction over many areas in the region, which has caused several projects to be halted.