Talisman Says Two Vietnam Oil Fields May Start Output in 2011

By Jason Folkmanis

Oct. 27 (Bloomberg) -- Talisman Energy Inc. may begin production at two new Vietnamese oil fields within three years, the Canadian company said.

Talisman sees 2011 as a ``feasible'' start date for the Hai Su Trang and Hai Su Den fields, in which it has a 60 percent stake, according to Paul Blakeley, a Calgary-based executive vice president. A service contract was signed last week for the two fields, which are 40 percent owned by a unit of state-owned Vietnam Oil & Gas Group.

``The state reserves committee has approved the oil-in- place estimates for both fields,'' Blakeley said in e-mailed comments. ``Planning is in progress which will lead to development sanction at the end of the first quarter of 2009, at which time, the development concept, reserves and production rate profile will be finalized.''

Talisman declined to comment on estimates of reserves or initial production targets for either field. While a 2011 date for the beginning of production is possible, the exact date will depend ``on the chosen concept and contracting strategy,'' Blakeley said.

Talisman also has a stake in Vietnam's Song Doc field, where production is due to start this year, as well as in the PM3-CAA field, which is shared between Vietnam and Malaysia.

Yet-to-Find Resources

``Vietnamese production is forecast to contribute significantly'' to Talisman's growth in output in coming years, according to a company presentation made last year at a Canadian Chamber of Commerce in Vietnam lunch in Ho Chi Minh City and posted on the business group's Web site. ``Vietnam has significant yet-to-find resources in under-explored basins.''

Last year, Talisman said it had tested 14,863 barrels of oil a day from a well on the Hai Su Trang field, off the southern Vietnamese coast. The Canadian explorer said then that ``these great results'' and the shallow-water environment should allow for rapid development of the area.

In January, Talisman said it had tested 13,450 barrels of oil and 6.87 million cubic feet of natural gas a day from a well on the Hai Su Den field, describing the results as ``very promising.'' Together with the Hai Su Trang field, Hai Su Den would ``form the basis of a new core producing area for Talisman.''

Vietnam is banking on production from the Talisman areas, as well as fields in which ConocoPhillips and Soco International Inc. have stakes, to reverse a decline in annual production that began in 2005.

While production last year fell to about 340,000 barrels a day from a peak of 427,000 in 2004, proved reserves rose to 3.4 billion barrels by the end of last year, up from 1.2 billion barrels at the end of 1997, according to estimates from BP Plc.

To contact the reporters on this story: Jason Folkmanis in Ho Chi Minh City at [email protected].

Last Updated: October 27, 2008 01:29 EDT

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