Neon Energy Ltd., an Australian explorer with production in California and drilling rights in Vietnam, began a survey off the Southeast Asian country's coast in an area also targeted by Exxon Mobil Corp. and Chevron Corp.
Neon has control of two areas, block 105-110/4 off the country's northern coast and block 120 off its central coast. All of the current output in Vietnam, Southeast Asia's fourth-biggest oil producer in 2008, comes from areas off the country's southern coast.
The move to explore different parts of the coastline comes amid declining output since Vietnamese production peaked at 427,000 barrels a day in 2004, according to BP Plc figures. Neon said in an Australian stock exchange announcement Monday it began a seismic survey on block 120 in an area south of an Exxon Mobil block and north of Chevron's.
"It's an under-explored area," Ken Charsinsky, managing director of Neon, said by telephone Tuesday from Sydney. "On our block 120, BHP Petroleum drilled there in the early 1990s and found oil, which wasn't commercial when oil prices were twenty dollars a barrel but may be now."
Exxon Mobil, the biggest American oil company, acquired interests in "several blocks offshore Vietnam" last year totaling more than 13 million acres, it said in March.
"Vietnam is in a way a last frontier for oil exploration," said Peter Arden, a senior resource analyst at Ord Minnett Ltd. in Melbourne. "It's been off the focus of a lot of explorers for some time, but the prospectivity of the Neon areas is very highly rated."