BMI's Executive Summary

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The latest Vietnam Oil & Gas Report from BMI forecasts that the country will account for just 1.13% of Asia/Pacific regional oil demand by 2011, while providing 4.52% of supply. Asia/Pacific regional oil use of 21.4mn barrels per day (b/d) in 2001 reached 24.84mn b/d last year. It should average 25.68mn b/d in 2007 and then rise to around 29.04mn b/d by 2011. In terms of natural gas, the region last year consumed 409bcm, with demand of 620bcm targeted for 2011, representing growth of 51.4% between 2006 and 2011. Production of 329bcm in 2006 should reach 478bcm in 2011 (+45.0%), but implies net imports rising from 80bcm per annum to 142bcm. Vietnam's share of gas consumption in 2006 was 1.71%, while its share of production was 2.12%. By 2011, its share of gas consumption is forecast to be 3.23%, with the country accounting for 4.19% of supply.

Global oil demand growth is expected to be around 2.0% this year, with Asia/Pacific and the CEE regions dominating. This is an encouraging rate of market expansion, given a relatively uncertain economic picture and high commodity prices. Our oil price projections for 2007 as a whole are revised upwards from the last quarterly report. We are now assuming an OPEC basket price average of US$59 per barrel, compared with the US$55 estimate provided by our last two quarterly reports. Based on recent price differentials, this implies Brent at US$62.83, WTI averaging US$61.25/bbl, and Urals at US$59.42/bbl.

Vietnamese real gross domestic product (GDP) growth is forecast by BMI at 8.2% for 2007, unchanged from 2006. We are also assuming 8.2% growth in 2008, followed by 8.7% in 2009 and 8.5% in 2010/11.

Exploration success is on the rise in Vietnam, with a growing number of international oil companies (IOCs) partnering PetroVietnam in finding and developing hydrocarbon resources – particularly gas. We are assuming oil and gas liquids production of no more than 360,000b/d by 2011, although the country is expected to pump 390,000b/d this year. Consumption is forecast to increase by 4-6% per annum to 2011, implying demand of 329,000b/d by the end of the forecast period. Gas supply and demand is forecast to increase from last year's 7bcm to 20bcm by 2011.

In the BMI Business Environment Ranking matrix, Vietnam receives an unchanged composite score of 31, which now ranks the country eighth out of 14 states included in the Asia/Pacific region. The overall business environment can be considered neutral in a regional context, thanks to a very high level of perceived economic and political risk. These factors are offset partly by the country's high oil/gas reserves to production ratio (RPR) and healthy short- to medium-term gas output growth. Neither Vietnam's regulatory regime nor its competitive landscape is particularly attractive in a regional context. IOC spending has been rising, largely in conjunction with the development of the country's gas industry.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Vietnam Economic SWOT

Vietnam Political SWOT

Vietnam Business Environment SWOT

Chapter 3 - Regional Market Overview

Asia/Pacific Region

Table: Asia/Pacific Oil Consumption (000b/d)

Table: Asia/Pacific Oil Production (000b/d)

Table: Asia/Pacific Oil Refining Capacity (000b/d)

Table: Asia/Pacific Gas Consumption (bcm)

Table: Asia/Pacific Gas Production (bcm)

Table: Asia/Pacific LNG Exports/(Imports) (bcm)

Vietnam

Chapter 4 - Business Environment Rankings

Vietnam

Asia/Pacific Region

Chapter 5 - Vietnam Business Environment Ranking

Economics – Long-Term Risk

Politics – Long-Term Risk

Oil & Gas Growth

Oil/Gas Reserves

Licensing/Regulation

Competitive Environment

Chapter 6 - Business Environment Overview

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Legal Code/Corruption

Labour Force

Foreign Direct Investment (FDI)

Tax Regime

Chapter 7 - Oil Market Outlook

Assessing The Risks

Table: Crude Price Forecasts 2007

Revised Forecasts

Table: Oil Price Forecasts

Chapter 8 - Regional Supply and Demand

Asia/Pacific

Table: Oil Production (000b/d) – Asia/Pacific

Table: Oil Consumption (000b/d) – Asia/Pacific

Chapter 9 - Global Picture

Table: Global Oil Consumption (000b/d)

Table: Global Oil Production (000b/d)

Chapter 10 - Industry Forecast Scenario

Oil and Gas Reserves

Oil Supply and Demand

Gas Supply and Demand

Refining And Oil Products Trade

Revenues/Import Costs

Table: Vietnam Oil & Gas – Historical Data & Forecasts

Other Energy

Table: Vietnam Other Energy – Historical Data & Forecasts

Key Risks to Forecast Scenario

Chapter 11 - Economic Outlook

Table: Output & Population

Chapter 12 - Regional Case Study – ConocoPhillips

Table: Exploration And Production 2005

Table: Commercial Realisation – Refining And Marketing 2005

Chapter 13 - Competitive Landscape

Executive Summary

Table: Key Players – Vietnam Oil & Gas Sector

Overview/State Role

BP – Summary

ConocoPhillips – Summary

Petronas – Summary

Table: Key Upstream Players

Mitsubishi – Summary

Table: Key Downstream Players

KNOC – Summary

Chevron – Summary

Others – Summary

Chapter 14 - Company Monitor

PetroVietnam

BP Vietnam

Petronas Vietnam

Zarubezhneft

Chapter 15 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Energy Industry

Cross checks

Sources

Network of Asian Oil & Gas Sources

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BMI's Asian Oil & Gas Reports are based on an extensive network of multilateral organisations, government departments, oil & gas industry associations, chambers of commerce and company reports. Information sources include: