Identifier
Created
Classification
Origin
09HANOI562
2009-06-18 06:39:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Hanoi
Cable title:
CHEVRON ONE STEP CLOSER TO BEING LARGEST U.S. INVESTOR IN
how-toVZCZCXRO1871 RR RUEHCHI RUEHDT RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHNH RUEHPB DE RUEHHI #0562 1690639 ZNR UUUUU ZZH R 180639Z JUN 09 FM AMEMBASSY HANOI TO RUEHC/SECSTATE WASHDC 9774 INFO RUEHHM/AMCONSUL HO CHI MINH 5939 RUCNASE/ASEAN MEMBER COLLECTIVE RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION RHMFISS/DEPT OF ENERGY WASHINGTON DC RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
UNCLAS HANOI 000562
SENSITIVE
SIPDIS
STATE FOR EAP/MLS MBROWN
COMMERCE FOR 4430/MAC/AP/OPB/VLC/HPPHO
ENERGY FOR TCUTLER AT POLICY AND INTERATIONAL AFFAIRS
E.O. 12958: N/A
TAGS: EINV EPET ENRG ECON EFIN PGOV VM
SUBJECT: CHEVRON ONE STEP CLOSER TO BEING LARGEST U.S. INVESTOR IN
VIETNAM
REF: A) HANOI 536 (Vietnam's Deputy PM Embraces U.S.-VN Economic
Agenda; Discusses AES, Chevron, and GE Deals)
UNCLAS HANOI 000562
SENSITIVE
SIPDIS
STATE FOR EAP/MLS MBROWN
COMMERCE FOR 4430/MAC/AP/OPB/VLC/HPPHO
ENERGY FOR TCUTLER AT POLICY AND INTERATIONAL AFFAIRS
E.O. 12958: N/A
TAGS: EINV EPET ENRG ECON EFIN PGOV VM
SUBJECT: CHEVRON ONE STEP CLOSER TO BEING LARGEST U.S. INVESTOR IN
VIETNAM
REF: A) HANOI 536 (Vietnam's Deputy PM Embraces U.S.-VN Economic
Agenda; Discusses AES, Chevron, and GE Deals)
1. (U) This cable is Sensitive but Unclassified. For official use
only, not for dissemination outside USG channels or posting on the
Internet.
2. (SBU) Summary: Chevron and PetroVietnam (PVN) have reached a
milestone in long-running negotiations for a $5-billion gas-to-power
project. [Ref. A] The two sides agreed upon core project details,
which allows Chevron to move to an advanced engineering stage. A
final investment agreement will likely be signed in 2010 and first
delivery of natural gas would begin in 2014. The agreement is a
welcome development as the Embassy and senior USG officials mounted
a major advocacy effort on the Chevron's behalf. End summary.
3. (SBU) On June 10, Chevron and PetroVietnam (PVN) struck a deal on
a framework agreement for the Southwest gas-to-power project, which
will use offshore gas for electricity generation in a new power
plant in the Mekong Delta. This was a major milestone that will
allow Chevron to proceed with the project's Front End Engineering
and Design phase (FEED).
4. (SBU) PVN and Chevron reached agreement on all four of the major
elements necessary to move to FEED, including the provisional gas
price, gas volume, contract extensions for the two offshore
development blocks, and technical coordination on the building of
the offshore pipeline.
5. (SBU) The agreement to move to FEED means the project has now
entered an advanced stage in which engineering specs and facilities
will be defined and evaluated in more detail before the two sides
sign a Final Investment Decision, which Chevron predicts will happen
sometime in 2010.
6. (SBU) Foreign Direct Investment (FDI) for the entire project,
including the pipeline, is estimated to be approximately $4 billion,
which would make Chevron's share--about $2 billion--the largest U.S.
investment in Vietnam. In addition to FDI, $1 billion will be
provided by PVN.
COMMENT: SLOW AND STEADY WINS IT
--------------
7. (SBU) Comment: Much work remains before the first delivery of
natural gas, which is now projected for 2014. Still, this agreement
is welcome news, particularly because Chevron has already invested
several years and approximately $300 million. End Comment.
PALMER
SENSITIVE
SIPDIS
STATE FOR EAP/MLS MBROWN
COMMERCE FOR 4430/MAC/AP/OPB/VLC/HPPHO
ENERGY FOR TCUTLER AT POLICY AND INTERATIONAL AFFAIRS
E.O. 12958: N/A
TAGS: EINV EPET ENRG ECON EFIN PGOV VM
SUBJECT: CHEVRON ONE STEP CLOSER TO BEING LARGEST U.S. INVESTOR IN
VIETNAM
REF: A) HANOI 536 (Vietnam's Deputy PM Embraces U.S.-VN Economic
Agenda; Discusses AES, Chevron, and GE Deals)
1. (U) This cable is Sensitive but Unclassified. For official use
only, not for dissemination outside USG channels or posting on the
Internet.
2. (SBU) Summary: Chevron and PetroVietnam (PVN) have reached a
milestone in long-running negotiations for a $5-billion gas-to-power
project. [Ref. A] The two sides agreed upon core project details,
which allows Chevron to move to an advanced engineering stage. A
final investment agreement will likely be signed in 2010 and first
delivery of natural gas would begin in 2014. The agreement is a
welcome development as the Embassy and senior USG officials mounted
a major advocacy effort on the Chevron's behalf. End summary.
3. (SBU) On June 10, Chevron and PetroVietnam (PVN) struck a deal on
a framework agreement for the Southwest gas-to-power project, which
will use offshore gas for electricity generation in a new power
plant in the Mekong Delta. This was a major milestone that will
allow Chevron to proceed with the project's Front End Engineering
and Design phase (FEED).
4. (SBU) PVN and Chevron reached agreement on all four of the major
elements necessary to move to FEED, including the provisional gas
price, gas volume, contract extensions for the two offshore
development blocks, and technical coordination on the building of
the offshore pipeline.
5. (SBU) The agreement to move to FEED means the project has now
entered an advanced stage in which engineering specs and facilities
will be defined and evaluated in more detail before the two sides
sign a Final Investment Decision, which Chevron predicts will happen
sometime in 2010.
6. (SBU) Foreign Direct Investment (FDI) for the entire project,
including the pipeline, is estimated to be approximately $4 billion,
which would make Chevron's share--about $2 billion--the largest U.S.
investment in Vietnam. In addition to FDI, $1 billion will be
provided by PVN.
COMMENT: SLOW AND STEADY WINS IT
--------------
7. (SBU) Comment: Much work remains before the first delivery of
natural gas, which is now projected for 2014. Still, this agreement
is welcome news, particularly because Chevron has already invested
several years and approximately $300 million. End Comment.
PALMER