Petronas and Petrovietnam have signed new agreements aimed at deepening their cross-border oil and gas cooperation. The deals extend a key upstream partnership and lay the groundwork for future collaboration under Vietnam’s updated energy laws.
The companies recently signed a Key Principles Agreement (KPA) to extend the Production Sharing Contract (PSC) and the Upstream Gas Sales Agreement (UGSA) for the PM3 Commercial Arrangement Area (CAA). This 2,000-square-kilometer offshore block spans the maritime border between Malaysia and Vietnam. The agreement extends both contracts until December 31, 2047, ensuring continued production from seven existing fields and the possibility of adding new tie-ins from nearby discoveries.
The PM3 CAA, which has an estimated remaining reserve of up to 60 million barrels of oil equivalent (MMboe), is crucial to regional energy security. Petronas also highlighted plans to transform the area into a carbon capture and storage (CCS) hub, with plans to reinject CO₂ from petroleum operations. This move aligns with both nations’ net-zero goals by 2050.
“This agreement shows our long-term commitment to cooperation,” said Datuk Ir. Bacho Pilong, Senior Vice President of Malaysia Petroleum Management at Petronas. He stressed the area’s importance in both energy supply and decarbonization. Petrovietnam also praised the deal, emphasizing Vietnam’s proactive approach in securing international investments and promoting sustainable development.
Alongside this, the two companies signed a Joint Study Agreement to explore new upstream projects in Vietnam, following the country’s 2022 Petroleum Law. This deal allows Petrovietnam to leverage Petronas’ global technical expertise, particularly in geological studies, and highlights the nation’s commitment to creating a more transparent, investor-friendly legal environment.
The partnership builds on their March 2025 agreement for LNG deliveries to Vietnam, marking the start of bilateral LNG trade between the two nations.
Petronas also noted that the renewed UGSA is structured to ensure continued economic viability for future field developments. The agreement will secure ongoing gas deliveries to Malaysia through Kertih and to Vietnam via Ca Mau.
These new agreements mark a significant step forward in strengthening one of Southeast Asia’s most enduring cross-border energy partnerships, combining supply security with sustainability efforts.
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