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Provision of Loan Guarantee for Natural Gas Development and Transportation Project in the Socialist Republic of Vietnam
by Mitsui Oil Exploration Co., Ltd.
- Contribution to Energy Transition in Asia -

March 29, 2024

Japan Organization for Metals and Energy Security (JOGMEC) has decided to provide loan guarantee both for the natural gas development project in which Moeco Vietnam Petroleum Co., Ltd. (“MVP”) and Moeco Southwest Vietnam Petroleum Co., Ltd. (“MSVP”) participate and for the natural gas transportation project in which MOECO Southwest Vietnam Pipeline B.V. (“MSPL”) participates (collectively “Block B Gas Development and Transportation Project”). Together with Mitsui Oil Exploration Co., Ltd. (“MOECO”), JOGMEC has provided equity capital in MVP and MSVP since its exploration stage. The final investment decision was realized on March 28 2024.
MVP acquired interests in Block B&48/95 located off the coast of Vietnam in 1996, and MSVP acquired interests in Block 52/97 (collectively "Block B") in 1999. Later, natural gas was discovered through exploration and evaluation activities. MSPL is participating in a pipeline project that transports natural gas produced from Block B to power plants. JOGMEC has been supporting exploration projects in Block B in which MVP and MSVP participate since the days of the former Japan National Oil Corporation, and now made the final investment decision. JOGMEC will provide loan guarantee up to 50% of the development costs to be borne by MVP, MSVP and MSPL for the Block B Gas Development and Transportation Project.

Vietnam is an important country for Japan's energy security, and Japanese companies have been active in the country's oil and natural gas development for many years. Starting with the Block B project, JOGMEC has provided financial and technical support to multiple Japanese companies operating in Vietnam. JOGMEC is also building cooperative relationships with Vietnam Oil and Gas Group (“PetroVietnam”) and other companies, including cooperation in decarbonization fields such as hydrogen and ammonia production and CCS.

Natural gas produced from Block B will be used in thermal power plants in Vietnam. While the country currently relies on coal-fired power plants for about 40% of its electricity generation, it aims to reduce greenhouse gas emissions to net zero by 2050. In the future, Vietnam plans to manage gas-fired power plants that utilize domestically produced natural gas and LNG as transition energy, based on the 8th National Power Development Plan (hereinafter referred to as "PDP8") established in 2023. Since Block B is clearly positioned as a source of feedstock gas for the O Mon thermal power plants in PDP8, Block B Gas Development and Transportation Project will contribute to the energy transition in Asia through Vietnam, and will further strengthen the bilateral relationship between Vietnam and Japan.

Brief Overview

1) Overview of project implementing company
Name of company Moeco Vietnam Petroleum Co., Ltd. Moeco Southwest Vietnam Petroleum Co., Ltd. MOECO Southwest Vietnam Pipeline B.V.
Date of establishment February 23, 1996 June 29, 2000 November 16, 2017
Chief Executive Officer HARADA Hidenori  HARADA Hidenori HARADA Hidenori
Shareholders MOECO: 58.744%
JOGMEC: 41.256%
MOECO: 61.283%
JOGMEC: 38.717%
MOECO: 100%
2) Block name
Block B&48/95 and Block 52/97 off the western coast of the Socialist Republic of Vietnam. The joint development area spanning both blocks is collectively referred to as “Block B”.
3) Patricipating Interest
Upstream 
(Block B&48/95)
Interest Holder Share
PetroVietnam (VNM) 【Operator】 42.38%
MVP(JPN) 25.62%
PetroVietnam Exploration Production Corporation(“PVEP”) (VNM) 23.5%
PTTEP Kim Long Vietnam Co., Ltd.(THA) 8.5%
(Block 52/97)
Interest Holder Share
PetroVietnam(VNM) 【Operator】 43.4%
PVEP(VNM) 30.0%
MSVP(JPN) 19.6%
PTTEP Southwest Vietnam Co., Ltd.(THA) 7.0%
Midstream
Interest Holder Share
PetroVietnam Gas Joint Stock Corporation(VNM) 51%
PetroVietnam(VNM) 【Operator】 28.699%
MSPL(JPN) 15.118%
PTTEP Southwest Vietnam Pipeline Company Limited (THA) 5.183%
4) JOGMEC assistance
 
Approval date March 26, 2024
Loan guarantee amount MVP:USD 167.5 Million、MSVP:USD 161 Million、MSPL:USD 87.5 Million (USD 416 Million in total)

Location of Block B

Location of Block B

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