Russia and Vietnam to push ahead with new Oil, Gas, LNG, and Oil Refining Projects

Russia and Vietnam have agreed to advance new oil and gas projects, including shipping and refining crude oil and liquefied natural gas (LNG) from Russia to Vietnam, according to a joint declaration “On the main areas of the Russian-Vietnamese relations of comprehensive strategic partnership at a new stage” published on the Kremlin’s website.

“The Parties have agreed to strengthen energy and oil and gas industrial cooperation and to ensure energy security by raising the efficiency of existing energy and oil and gas projects and advancing new ones in accordance with the effective legislation and strategic interests of each Party, including shipping and refining crude oil and LNG from Russia to Vietnam,” the declaration said.

The two countries’ leaders support creating favorable conditions for increasing Russian business operations on Vietnam’s continental shelf, and likewise for Vietnamese in Russia.

Ahead of the talks held on May 10 between Russian President Vladimir Putin and the secretary-general of Vietnam’s Communist Party Central Committee, To Lam, the Russian government approved a number of draft agreements to broaden bilateral cooperation on oil and gas production. In particular, the documents include giving PetroVietnam a 35% stake in the Kharyaga Production Sharing Agreement (PSA) by 2027 and Zarubezhneft acquiring a 49% stake in a future PSA to develop the Block 01/17 field and Block 02/17 field in Vietnam. The documents also propose extending the two companies’ joint venture Vietsovpetro’s operations until the end of 2050.

Vietnam has been trying for years to get Russian companies to develop its Dung Quat refinery (controlled by PetroVietnam through the Binh Son Refining and Petrochemical Company) and said it could sell its 49% stake in it. In the summer of 2022 Zarubezhneft and Gazprom Neft specialists visited the Dung Quat refinery to further study cooperation possibilities.

Russian LNG shipments to Vietnam was a topic raised during Russian President Vladimir Putin’s visit to the country last summer. Russia could take part in building LNG capacity in Vietnam, which has the resources, and ship LNG to Vietnam, Putin said then. Novatek and PetroVietnam signed an MOU on cooperation in Vietnam.