US player entrusts Yinson Production and PTSC JV with FSO for Asian offshore oil project

A joint venture (JV) consisting of PetroVietnam Technical Services Corporation (PTSC) and Yinson Production, a subsidiary of Kuala Lumpur-based energy infrastructure and technology company Yinson Holdings, has been put in charge of the provision, charter, operation, and maintenance of a floating storage and offloading (FSO) vessel destined for an oilfield development project in the Cuu Long Basin off the coast of Vietnam in Southeast Asia, which Murphy Oil, a Houston-based oil and gas firm, operates.

The Yinson Production (49%) and PTSC (51%) joint venture won a ten-year firm FSO contract, which could be extended up to five years, with Murphy Cuu Long Bac Oil, a subsidiary of Murphy Oil Corporation, for the Lac Da Vang project in Vietnam. Murphy received a stamp of approval from the Vietnamese government to advance its field development plan for the oilfield several weeks before disclosing its decision to proceed with the project in 3Q 2023.

Murphy is the operator of Block 15-1/05 of the Cuu Long Basin and has a 40% working interest, while its partners, PetroVietnam Exploration Production and SK Earthon, hold the remaining 35% and 25%, respectively. The Lac Da Vang field has an estimated ultimate recovery of 100 million barrels of oil equivalent (mmboe) gross resources, with peak gross production of 30 to 40 mboepd and 10–15 mboepd net peak production.

The Yinson Production and PTSC JV’s contract, worth approximately $416 million, is expected to bring to life a newbuild double-hull FSO with a storage capacity of around 500,000 barrels and advanced dual-fuel systems for optimized efficiency. The FSO design is expected to emphasize safety, operational excellence, and low-carbon emissions, aligning with the Malaysian player’s sustainability goals. 

The construction is anticipated to take around two years, thus, the FSO is slated to start operations in the Lac Da Vang field offshore Vietnam in the fourth quarter of 2026, which is in line with Murphy’s timeline for the first oil, planned for 2026, with development phased through 2029.

This is not the first collaboration between Yinson Production and PTSC as the duo, through PTSC AP and another joint venture, have been operating offshore assets in Vietnam for over a decade, with the FSO PTSC Bien Dong 01 on assignment since 2013 and the FPSO PTSC Lam Son employed since 2014.

Commenting on the contract, Flemming Grønnegaard, Chief Executive Officer of Yinson Production, highlighted: “This new project underscores Yinson Production’s commitment to delivering energy solutions that meet the evolving needs of our clients and the industry.

“The Lac Da Vang FSO project is a testimony to the strength of our partnership with PTSC and our shared vision for operational excellence. We are proud to play a pivotal role in supporting Vietnam’s energy security.”

The new FSO award increases the firm’s fleet size to ten units. This has been a busy year for Yinson Production, which managed to raise nearly $3 billion in 2024 following its recent $100 million bond issue.

The firm also completed the sale of a minority stake in an FPSO working on Petrobras’ revitalization project in the Campos Basin offshore Brazil. As a result, Japan’s shipping player, Kawasaki Kisen Kaisha (K Line), has become the firm’s new partner.