Dai Hung oil field project phase 3 to earn Petrovietnam extra $2.5 bln in annual revenue

The Dai Hung oil field project phase 3 offshore Vietnam has begun commercial production and is expected to generate an additional $2.5 billion in annual revenue for state-owned Petrovietnam (PVN) and around $450 million to the state budget.

Phase 3 began oil extraction 20 days ahead of schedule, Le Duc Tue, director of PVEP POC Branch, told a ceremony on Friday marking the first commercial oil flow.

Dai Hung - Phase 3 saw an output of 6,000 barrels per day on the first oil extraction day, and the figure is expected to rise to 8,000 barrels per day in the coming weeks and 18,000 barrels by the end of the year.

By the end of 2024, total revenue from the Dai Hung field exceeded $4 billion, with more than $600 million contributed to the state budget. The field’s average annual output is about 2.6-2.8 million barrels.

The WHP-DH01 rig for Phase 3 was installed at a depth of more than 110 meters and is connected to the central processing platform (FPU) via a 5.2-kilometer flexible pipeline system.

The Dai Hung project is not only a technical success but also a testament to the resilience of Vietnam’s oil and gas sector.

In 2003, PVN acquired the field from a consortium of international contractors for just $1, after many experts deemed it commercially unviable. Despite low global oil prices - sometimes just above $10 per barrel, PVEP and its operation partner resumed production beginning in 2005.

Since then, the field has received continuous investments and developments. Phase 1 was completed in 2011, followed by a gas collection system in 2015. Phase 3 received the prime ministerial approval in June 2022.

Deputy Prime Minister Bui Thanh Son praised the early launch of phase 3 production as a milestone in Vietnam’s ability to master energy technology and operations independently.

The project has been executed entirely by domestic units, underscoring the competence and self-reliance of PVEP, PVN, and their local partners.

He also commended the energy sector’s role in supporting Vietnam’s economic ambitions, targeting 8% GDP growth this year, double-digit growth in the following years, and a developed-country status by 2045.

PVN chairman Le Manh Hung reflected on the project’s rocky path, noting that it was once at risk of being shelved in 2020 when oil prices plummeted and production costs reached $57 per barrel. However, with strong resolve, PVN transformed the field from a $1 acquisition into a multi-billion-dollar asset.

Looking ahead, PVN is developing the Dai Hung Nam (Dai Hung South) project, which is expected to go online by the end of 2026.

At full capacity, the combined output of the Dai Hung field could reach nearly 30,000 barrels per day, positioning it among Vietnam’s top three oil-producing fields.