Vietnam’s oil industry helped finance the country’s early economic transformation, but its role is changing. Commercial production from the Bạch Hổ field began in 1986, placing Vietnam among the oil-producing states of Southeast Asia and providing an important source of export revenue during the opening years of the Đổi Mới reform period.
Nearly four decades later, Vietnam still has a substantial offshore petroleum industry, a national network of engineering and service companies, and two major refineries. However, many producing fields are mature, domestic crude output is under pressure, and demand for transport fuels has grown alongside industrialisation, urban development, aviation, and rising household incomes.
Vietnam is therefore moving from a model centred on domestic production and crude exports toward one in which imported crude, refinery reliability, fuel imports, and supply diversification are increasingly important to national energy security.
Bạch Hổ Established Vietnam as an Offshore Producer
The Bạch Hổ, or White Tiger, field remains the defining project in Vietnam’s oil history. Located offshore southeastern Vietnam in the Cửu Long Basin, it produced the country’s first commercial oil in June 1986.
The field was developed by Vietsovpetro, the long-standing Vietnam-Russia joint venture. Its success was technically important because large quantities of oil were produced from fractured granite basement reservoirs, which became a major exploration target elsewhere on Vietnam’s continental shelf.
Bạch Hổ supported the development of offshore platforms, subsea pipelines, floating storage facilities, drilling operations, marine services, fabrication yards, and a skilled domestic petroleum workforce. Vietsovpetro subsequently developed or participated in additional fields such as Rồng, Thỏ Trắng, Gấu Trắng, and Cá Tầm.
Petrovietnam became the central institution connecting the industry. In 2025, it was formally renamed the Vietnam National Industry–Energy Group while retaining the Petrovietnam name. Its activities now extend beyond traditional petroleum into refining, power, industrial services, and newer energy technologies, but oil production remains an important part of its asset base and technical capacity.
Vietnam’s upstream sector is concentrated offshore. Important producing and prospective areas include the Cửu Long Basin, the Nam Côn Sơn Basin, and the Malay–Thổ Chu region. Operations rely on fixed platforms, wellhead facilities, floating storage units, offshore pipelines, drilling rigs, and coastal support centres, particularly around Vũng Tàu.
Mature Fields Are Pulling Production Downward
Vietnam’s main oil challenge is the age of its producing fields. Bạch Hổ and several other established assets have been operating for decades, and natural reservoir decline makes each additional barrel more difficult and expensive to recover.
Operators can slow the decline through infill drilling, water injection, enhanced recovery, improved reservoir modelling, and the connection of smaller discoveries to existing platforms. These methods are often cheaper than constructing entirely new offshore production systems, but they cannot permanently prevent mature fields from losing output.
Government projections released in 2026 indicate that domestic crude production could fall to between 5.8 million and 8 million tonnes per year during 2026–2030. This compares with an average of approximately 8.6 million tonnes per year over the previous five-year period.
New discoveries provide some replacement potential. In 2024, Petrovietnam announced discoveries at the Rồng field and in the PM3 commercial arrangement area with combined initial estimates exceeding 100 million barrels. The Đại Hùng Phase 3 project in the Nam Côn Sơn Basin achieved first commercial oil in May 2025.
These projects matter because Vietnam does not need a single giant discovery to support production. Smaller fields can make a useful contribution when they are located near existing infrastructure and can be connected to operating platforms, pipelines, and storage facilities.
Nevertheless, new production is currently more likely to slow the national decline than restore the output levels reached during Vietnam’s earlier oil expansion.
Refining Has Become More Important Than Crude Exports
Vietnam’s domestic refining system is built around Dung Quất and Nghi Sơn. Together, the two plants generally supply approximately 60–70% of the country’s petroleum-product demand when operating reliably.
Dung Quất, located in Quảng Ngãi Province, was Vietnam’s first refinery. It has a design processing capacity of approximately 6.5 million tonnes of crude oil per year, or 148,000 barrels per day. The plant was originally designed around domestic Bạch Hổ crude, although its operator, Binh Son Refining and Petrochemical, has worked to expand the range of crude grades it can process.
A planned upgrade would raise Dung Quất capacity to approximately 8.5 million tonnes per year, or 192,000 barrels per day. The project is also intended to improve product quality, increase feedstock flexibility, and strengthen the refinery’s ability to process a greater proportion of imported crude.
Nghi Sơn, located in Thanh Hóa Province, is larger. Its design capacity is 200,000 barrels per day, equivalent to approximately 10 million tonnes per year. Its products include gasoline, diesel, jet fuel, liquefied petroleum gas, polypropylene, and other refinery and petrochemical outputs.
The refinery is owned by a consortium involving Idemitsu Kosan, Kuwait Petroleum International, Petrovietnam, and Mitsui Chemicals. Its original supply model was based heavily on imported Kuwaiti crude.
Nghi Sơn can meet roughly 35–40% of national petroleum demand when operating steadily. This gives the refinery considerable strategic importance, but it also means that maintenance shutdowns, financial problems, operational interruptions, or feedstock shortages can quickly affect Vietnam’s domestic fuel market.
Imported Crude Is Now Central to Energy Security
Vietnam produces crude oil while also importing large volumes of crude and refined petroleum. This is not a contradiction. Domestic fields may produce grades that are exported or processed at Dung Quất, while Nghi Sơn and other market requirements create demand for imported feedstocks with different technical characteristics.
Crude imports reached approximately 14.2 million tonnes in 2025, exceeding domestic production and rising from the previous year. Kuwait supplied around four-fifths of the imported total, largely because of its role in feeding Nghi Sơn.
This concentration created a significant supply vulnerability. Disruption to Middle Eastern exports and shipping routes in 2026 forced Vietnam and the Nghi Sơn partners to seek alternative crude from other regions. The refinery began testing and receiving non-Kuwaiti cargoes while authorities contacted suppliers in Asia, Africa, and other markets.
The episode demonstrated that refinery capacity alone does not guarantee fuel security. Vietnam also requires diversified crude contracts, sufficient commercial and strategic inventories, suitable ports and storage, flexible refinery configurations, and access to imported finished fuels when domestic plants cannot cover demand.
The country continues to import gasoline, diesel, jet fuel, and other products because the two refineries do not meet the entire market. A shutdown at either plant can therefore increase import requirements quickly and place pressure on domestic distribution and prices.
New Contracts Aim to Keep Offshore Investment Moving
Vietnam revised its petroleum framework through the Petroleum Law adopted in 2022 and effective from July 2023. The law extended possible petroleum-contract periods, clarified state oversight, and created broader incentives for exploration in technically difficult, remote, deep-water, or commercially marginal areas.
The first production-sharing contract signed under important provisions of the revised law covered Block 15-2 in the Cửu Long Basin in March 2025. The contractor group includes Petrovietnam, its exploration and production subsidiary, and Japan Vietnam Petroleum Company.
Vietnam needs this type of foreign and domestic cooperation because offshore exploration is capital-intensive and technically demanding. International operators can provide risk capital, specialised seismic analysis, drilling technology, and experience developing complex fields. Petrovietnam and Vietnamese contractors contribute local knowledge, existing infrastructure, engineering capacity, and access to the domestic market.
Investment decisions are still affected by long project timelines, uncertainty over discoveries, offshore boundary sensitivities, development costs, and competition from petroleum opportunities in other countries. Stable contract terms and faster project approval are therefore important if Vietnam is to replace even part of the production lost from mature assets.
Vietnam’s Oil System Is Becoming More Import-Dependent
Oil will remain important to Vietnam’s transport, aviation, logistics, manufacturing, agriculture, and petrochemical sectors. However, the structure of the industry will continue to change.
Domestic production is unlikely to return easily to its historic peak. New offshore projects, improved recovery, and connections to existing facilities can moderate decline, but a larger share of refinery feedstock and finished fuel demand will probably be met through imports.
Dung Quất and Nghi Sơn will consequently become even more important. Their reliability, financial stability, feedstock flexibility, and ability to produce cleaner and higher-value fuels will influence national energy security as much as the performance of offshore fields.
Vietnam’s next oil era will not be defined only by how much crude it extracts. It will depend on whether the country can combine mature-field management, selective exploration, refinery modernisation, diversified imports, adequate storage, and efficient fuel distribution into a more resilient petroleum system.
