Recently, an Italian energy company Eni SpA (E - Free Report) and Vietnam's national oil company PetroVietnam have inked an agreement in Hanoi for jointly exploring the unconventional hydrocarbons potential in the country.
This agreement came shortly after Eni signed a memorandum of understanding (MoU) with PetroVietnam, which will facilitate the Italian giant in strengthening its foothold in and outside Vietnam.
The agreement will allow PetroVietnam to expand its international business and Eni to have the opportunity to procure more blocks in Vietnam. Eni added that it will offer PetroVietnam participation in international projects in which it holds exploration and development rights.
Both the companies are yet to disclose their respective contributions toward the appraisal costs for the unconventional plays but are believed to share the costs.
Since mid last year, Eni has been present in Vietnam with 50% participation and operatorship of three exploration blocks located in the Song Hong basin in the Gulf of Tonkin. The region is estimated to hold 10% of the country’s hydrocarbon resources. It was only in January 2013 that Eni got approvals for the farm-ins to two blocks and drilling is expected to commence by the middle of this year.
This move is in sync with the company’s strategy to strengthen its traction in Asia where it has already marked its presence by its recent exploration successes in Indonesia and Pakistan, and acquisitions in Australia.
Currently, Eni holds a Zacks Rank #4, which is equivalent to a short-term Sell rating. However, there are other stocks in the oil and gas sector – Enerplus Corporation (ERF - Free Report) , Range Resources Corporation (RRC - Free Report) and NGL Energy Partners LP (NGL - Free Report) – which hold a Zacks Rank #1 (Strong Buy) and are expected to perform better.