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. Last Updated: 07/27/2016

Fradkov Seeks Closer Vietnamese Ties

HANOI, Vietnam -- Russia and Vietnam are capable of expanding not only their key business in oil and gas exploration but also trade, investment, telecoms and transport industries, top government officials said on Thursday.

Prime Minister Mikhail Fradkov said at a news conference in Hanoi that Russia was ready to join Vietnam's tender to supply equipment to the $2.3 billion Son La hydro power plant and help Vietnam build its first nuclear power plant.

Vietnamese Prime Minister Phan Van Khai said trade with Russia could grow to several billions of dollars in the coming years, from $1.02 billion last year and $570 million in 2001, when President Vladimir Putin visited Hanoi.

Speaking after closed-door talks with Fradkov, Khai said the Russian government would finance Russian firms that invested in Vietnam.

In detailing energy-sector ties, Russia asked Vietnam to extend their 50-50 oil and gas joint venture, Vietsovpetro, beyond 2010, when the 30-year contract expires, Vietnamese Industry Minister Hoang Trung Hai said.

"They've asked for that, but the venture management will have to study and make proposals to the two governments, then the intergovernmental committee will consider it," he told reporters after a document-signing ceremony witnessed by the two prime ministers.

"Cooperation in the future would not only be in Vietnam, but in a third country, including a former Soviet country," Hai said, without identifying the country.

Vietsovpetro is Vietnam's key oil and gas firm and accounts for 80 percent of the country's crude output. In the past 25 years it has pumped 150 million tons of crude and made profit after repaying for investment worth around $1.5 billion.

Vietsovpetro, a venture between state oil monopoly Petrovietnam and Russia's Zarubezhneft, operates Vietnam's biggest oil field, Bach Ho.

Vietsovpetro has been stepping up exploration to offset declining output at Bach Ho, which now produces 220,000 barrels per day. The venture said last year that Bach Ho's output would shrink by an average 1.06 million tons per year, or 21,000 bpd, from 2005 to 2014, when it would be closed.

State-owned Zarubezhneft officials have said they are confident the terms of Vietsovpetro's operation and production sharing would be extended beyond then.