VIETNAM may take a smaller cut of the oil produced from one of its first on-stream wells in order to avoid a showdown with Australia's Broken Hill Proprietary (BHP).
The head of state oil monopoly PetroVietnam hinted yesterday that new lower estimates of BHP's Dai Hung field were being studied.
'If the reserves are not as big . . . both sides will negotiate to adjust the share,' PetroVietnam general director Ho Si Thoang said in reports in Vietnam's state press.
The comment comes one month after the South China Morning Post revealed that BHP would shut the field down in April next year unless PetroVietnam agreed to take a smaller cut under its production sharing contract.
Such a move could swiftly affect the country's foreign exchange earnings. Crude oil is by far Vietnam's biggest export.
BHP has yet to comment officially.