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May 5, 2022updated 29 Apr 2022 3:51pm

Proving ground, proving sea: inside Vietnamese oil and gas

While not a traditional oil and gas heavyweight, Vietnam has emerged as a potential player, boasting Asia’s third-largest reserves of oil.

By Giles Crosse

The US Energy Information Administration says that Vietnam has now emerged as an important oil and natural gas producer in Southeast Asia. It has boosted exploration activities, allowing for greater foreign investment and cooperation, plus it has introduced limited market reforms to support the energy industry.  

Add in rapid economic growth, industrialisation, and export market expansion, and there emerges a picture for rising domestic energy consumption. It’s therefore an encouraging scene for both innovation and Vietnam’s offshore energy, and by inference its industrial future too. A potential win-win situation for people and profit, if done right.  

Vietnam’s offshore potential 

Redline Communications is a provider of data infrastructure for remote and harsh environments. It has just announced that materials company Thien Phuc will deploy a virtual fibre solution to support operations for a leading oil and gas exploration in Vietnam, delivering advanced communications for nine remote exploration and production fields in the South China Sea. 

“Vietnam can definitely be a solid reference for Redline in the Asian market,” says Taimur Farooq, technical sales manager for Redline. “Companies like PTTEP and Shell Brunei have also selected our virtual fibre technology for offshore installations. Apart from that, some of the region’s security agencies, including the navy and coast guard use our technology too.” 

Thilip Suppaiah, regional sales director, APAC for Redline, says: “Plus, offshore is a very industrial and rugged environment. Barrier grade is not industrial grade. Vietnam has all the potential to establish itself as a big player in the oil and gas industry. Its state backed company, Petrovietnam, has joined hands with Japanese NX Nippon and Russian Vietsovpetro in exploring new gas fields around Vietnam waters.  

“However, in recent times there have been some setbacks in the form of political power; China has been claiming territory over the South China Sea, and warnings are issued, which stops potential exploration expeditions. China, along with the United States Navy, always conducts their big scale exercises in the potential blocks. This geological and political interference limits new investments from exploration companies.” 

Geopolitics versus connectivity 

Yet geopolitical concerns are not necessarily as important as simply meeting energy demand. Reno Moccia, executive vice president of worldwide sales and marketing at Redline, argues that fulfilling energy needs is the motivating force behind these developments across the region, and Vietnam is no different. 

Indeed, when it comes to the advantages that have won Redline the contract work in the region, Farooq says that the RAS Extend auto-align and tracking system is simply the most sought-after product for vessel connectivity there is.  

“The only alternatives that I have seen are either geostationary micro-wave antennas, which are super expensive, or wireless companies collaborating with third party auto align antennas, which are not very attractive due to complexities and the involvement of multiple parties.” 

In terms of wider operational challenges in Vietnam, they are myriad. “Safety comes first and they want mostly ATEX 1 or at least ATEX 2 certified products, which are intrinsically safe to be deployed on offshore platforms,” says Farooq. “In these types of areas you cannot even install a simple power socket that is not ATEX 1. Environmental factors such as ducting, scattering, inverse propagation, and reflections are key risks.  

“The type of assets also plays a key role as a good number of offshore assets are either vessels, which are moving all the time, or fixed floating assets that rotate around the anchors and also face pitch roll and yaw, hence they need specialised antennas rather than fixed directional antennas.” 

The world of offshore broadband  

“Offshore broadband communication is a completely different world of its own,” says Farooq. “The moment we start talking about it, the discussion moves away from bits and bytes, capacities [and] spectral efficiency and towards reliability, safety, and offshore challenges.  

“You can have the best technology in the world but it will not survive six months in this demanding environment that is extremely corrosive and wet, as well as posing huge RF [radio frequency] propagation challenges,” Farooq continues.  

”Our product is built to withstand such harsh environments with alloy casing, stainless steel components, laminated board, IP67 water ingress rating, and specially ATEX 2 and ATEX 1 certified (safety) that adds a lot of value to our solution.” 

It is likely that this kind of tough communications technology would serve a windfarm or an oil field equally well, but, as ever, the balance of these resources needs to be considered in greater detail. 

Tomorrow and beyond 

When it comes to the overall future for Vietnam’s oil and gas sector, the need to balance production and environmental protection remains a critical concern. Vietnam promised to target carbon emission neutrality by 2050 at COP26, and while the government plans to double wind generation by 2030, it is unclear how this development will affect the offshore sector.  

Plainly, it’s also impossible for now to judge how Russia’s recent aggression will play out in terms of divestment and whether partnerships therein remain a viable part of Vietnam’s extractive tomorrows.  

“Vietnam is part of the bigger world and is on the track of promoting sustainable energy sources but this change may take a long period of time,” comments Farooq. “We have to consider the current geopolitical situation and I see huge investments in fossil fuels in the near future.” 

But in a part of the world that is developing quickly, surely demand for green power is high too and the market drivers are strong. Time will tell on this, but Vietnam has plenty of resources to play with either way.  

It seems then that a combination of the toughest technology and some tough challenges on geopolitics and the sustainability mix will determine where Vietnam’s offshore ultimately goes. The energy source that this technology ends up serving, will ultimately be down to the politicians.  

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