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SCMP Reporter

In the edgy, tight-lipped world of Vietnam's fledgling oil industry, Randall Thompson has always been seen as something between sideline maverick and good, old-fashioned hustler.

   But now Mr Thompson - president, prime shareholder and sole employee of the Crestone Energy Corp of Denver - is laughing all the way to the bank.

  Mr Thompson's obscure Crestone has been sold to Nasdaq-listed Benton Oil and Gas Co.

   Benton moved on the basis of his claim to China's hotly disputed slice of Vietnam's coastline, putting US$15.5 million his way.

    For Mr Thompson, 46, the deal is the completion of five years toil that landed him at the core of a geo-political flashpoint.

   He went to Beijing an unheard-of Denver oil man and eventually walked away with a contract from China National Offshore Oil Corp in 1992 to explore and develop 2.5 million hectares of the South China Sea.

   Mr Thompson's Crestone had no ability to explore the area itself and was always looking to farm out the deal to a big-time player - a move which would give Beijing's claim added credibility.

   The site is only 280 kilometres from Vietnam's southeast coast and more than 1,100 km from China.

  The field sits amid key Vietnamese fields now being explored by industry giants such as Mobil, Total and Marubeni.

   Last April Vietnam lived up to its promises and ignored Crestone's licence, awarding rights to overlapping blocks to another US operation, Du Pont subsidiary Conoco Incorporated.

  Initial statements from Benton chiefs reflect Beijing's strategy towards joint development.

    Chairman and chief executive Alex Benton has said Conoco was an 'excellent' company which his firm would be happy working with but industry insiders and diplomats suggest Vietnam would be a little more reluctant.

   A string of international maritime lawyers believe Vietnam is in a strong position, repeatedly linking its claim to its continental shelf under the 1982 United Nations Law of the Sea.

   Vietnamese Foreign Ministry spokesman Tran Quang Hoan last week declared China's claim - and any resulting sale or transfer - 'absolutely illegal and void'.

   Vietnam traditionally has stoutly defended the area with force. In April 1994, gunboats drove out of the area a Chinese research vessel which was reportedly chartered by Crestone.

 News of the sale comes after a tough year for Vietnam's oil industry, with many international players questioning the long term potential of the seas off Ho Chi Minh City.

   Royal Dutch/Shell scrapped plans to renew production sharing deals with state oil company PetroVietnam after failing to find viable prospects and Australia's Broken Hill Proprietary Co (BHP) wrote off its US$117 million investment with PetroVietnam at its Dai Hung field in June.

     Oil is Vietnam's most important export earner. The country has produced about 8.7 million tonnes of crude oil over the past 12 months and is aiming to raise the annual output to 18 to 20 million tonnes by 2000. Some estimates are forecasting considerably lower yields.

   Any change to off-shore predictions, however, are unlikely to trouble Mr Thompson. He is flush with the success and is looking to new horizons for his second big speculative licence venture.



Oil man nets US$15m for disputed oil rights