Rosneft Commences Exploratory Drilling Offshore Vietnam as a Project Operator

For the first time Rosneft is operating a drilling project, in International waters confirming the Company's competence and ability to implement technically complex drilling programs offshore.

The design depth of the well will be around 1380 m, while the sea depth in the area is about 162 m. The expected recoverable reserves of natural gas in the PLDD geological structure are estimated at 12.6 bcm, and 0.6 mt of gas condensate which can be developed by subsea completion and tied-back to the existing Lan Tay platform operated by Rosneft in Block 6.1. The drilling will be performed using the HAKURYU-5 drilling rig owned and operated by Japan Drilling Co., Ltd (JDC). Rosneft announced the signing of agreement with JDC at the Eastern Economic Forum-2015.

Following PLDD the Company will drill another exploration well in Block 05.3/11 also in the Nam Con Son basin. Incorporating the two wells into the same program will ensure synergy between the two projects and help reduce the timelines for implementation of the works, thus maximizing the efficiency of exploration projects at the Company’s Vietnamese assets.

Rosneft Vietnam BV also plans to shoot broadband 3D seismic of its existing Block 6.1 operatorship later this year to enhance ongoing production recovery and explore potential in deeper prospects.

Commenting on the drilling start, Rosneft Chairman of the Management Board Igor Sechin said: "Rosneft team has already demonstrated their competence in Russia during the successful drilling of the world's northernmost well in the Kara Sea, which resulted in the discovery of a new deposit, the Pobeda field. Today, the Company starts a similar project as a drilling operator in international waters. I am sure that the experience gained in Vietnam will be used by the Company not only in its activity in the southern seas; these competences will find application in planning and implementation of upstream projects in remote areas. I would especially like to emphasize that this project is an example of advanced cooperation with the Company's partners in the Asia-Pacific: Petrovietnam and ONGC. We appreciate not only the current progress of joint projects implementation in Vietnam, but also the future prospects for their development."

Rosneft is currently involved in projects of gas and condensate production and exploration in two blocks offshore Vietnam:

Block 06.1: Rosneft Vietnam B.V. owns 35% of the project and is the project operator; The project is based on the Production Sharing Contract (PSC). The PSC area comprises two gas condensate fields – Lan Tay and Lan Do. The deposits are located 370 km off the coast in the Nam Con Son basin with a sea depth of up to 190 m. The field's initial gas reserves are about 68 billion cubic meters. By June 2015, the block produced its 300-millionth barrel of oil equivalent (or more than 46 billion cubic meters of gas).

Block 05.3/11: Rosneft Vietnam B.V. owns 100% of the project and is the project operator. The license area is located in the region with proven oil and gas content and infrastructure, and is adjacent to fields under development in Block 06.1. The resources of block 05.3/11 are currently estimated at about 40 billion cubic meters of gas and 9 million tons of gas condensate.

Rosneft also owns 32.67% of the Nam Con Son pipeline, which delivers gas and condensate from the offshore blocks of the Nam Con Son basin to the onshore power generation complex, which creates potential synergies when commercial reserves in Block 05.3/11 are discovered.

In 2015, the gas produced in Block 06.1 provided about 12% of the energy needs in Vietnam.

On June 22, 2015, Rosneft Vietnam B.V. achieved an important milestone in its operations - 13 years of safe offshore operations. This result is one of the best in the industry.

Rosneft Vietnam B.V., a Rosneft Group subsidiary, received a governmental award of the Socialist Republic of Vietnam - Labour Order Second Class - for the contribution to the Vietnamese petroleum industry, and strengthening of the friendship and cooperation between Vietnam and Russia.

Japan Drilling Company (JDC) is a Japanese company specialized in offshore drilling. JDC was involved in exploration work in the offshore fields of the north-east of the Sakhalin Island in 1977-1983. Drilling rigs HAKURYU-4 and HAKURYU-2 were used to drill 13 exploration wells, including the Chayvo field, Arkutun-Dagi and Odoptu. Thus, JDC was involved in the discovery of all 3 major fields of the Sakhalin-1 project.