Italian oil company Eni confirmed the discovery of a giant gas and condensate field in the shallow-water Ken Bau in the Song Hong Basin off Vietnam. According to preliminary estimates, Ken Bau contains between 7-9 Tcf of raw gas as well as 400-500 million barrels of associated condensate. With a conservative recovery factor of 60%, this means that the recoverable resources can reach up to 4.8 Tcf. This makes Ken Bau one of Southeast Asia’s biggest gas discoveries in the last two decades.
The discovery is important to Vietnam’s energy demand, which is expected to expand from 54 GW capacity now to 125-130 GW by 2030. Gas accounted for 33% of the country’s power mix, and it is expected to increase LNG imports to meet growing power demand while transitioning away from coal. Vietnam is expected to rely more heavily on LNG imports as its upstream production has been struggling from geopolitical challenges.
China’s pressure has been harassing Vietnam’s upstream projects in the disputed maritime areas in the South China Sea. Vietnam has reportedly agreed to pay around $1 billion compensation to Repsol and Mubadala for terminating their South China Sea operations following Beijing’s pressure. Chinese pressure also reportedly forced Rosneft to suspend its offshore drilling plans in Vietnam.
