Pan Pacific Petroleum has agreed to sell its 5% interest in Block 07/03 in the Nam Con Son Basin in the South China Sea, to Spain's Repsol for US$5 million.
Block 07/03, operated by Talisman (part of Repsol), includes the Cá Rồng Đỏ (CRD) oil and gas discovery that has been successfully appraised and flow tested. Talisman has been working towards a development concept for resources in the block.
In Q3 last year, Pan Pacific said that, if approved, more than US$1.1 billion would be invested over the next four years to drill the necessary wells and build the infrastructure to develop the discovery.
Oil would be exported from a floating production storage offloading (FPSO) vessel via shuttle tanker and all gas would be developed and exported for sale via a gas pipeline that ultimately connects to the Vietnamese mainland. At the time, Pan Pacific said contract negotiations were continuing for a FPSO vessel, tension leg wellhead platform facilities, and a long-term gas sales agreement with PetroVietnam.
In September, Pan Pacific said that if a final investment decision was approved within the next six months, first oil and gas production would be targeted for the 2H half of 2019.
Block 07/03 is in the prospective Nam Con Son Basin, adjacent to block 12W, which contains the Chim Sao and Dua Oil field developments operated by Premier Oil.
Gas was discovered by BP in the Lan Tay and Lan Do Fields in Block 06-1 to the north. These gas fields have been developed as part of the Nam Con Son Gas Project, an integrated gas-to-power project that delivers natural gas supplies from the offshore fields via a 370km subsea pipeline.
Following the sale, Pan Pacific will have no debts and circa US$16 million cash and liquid investments of US$3 million.