Asian oil and gas companies are increasingly tapping opportunities in the lucrative drilling sector amid growing demand from emerging economies such as Vietnam.

Keppel Offshore and Marine will soon deliver Vietnam's first jack-up rig to PetroVietnam Drilling and it expects to see more orders coming that way.

Both companies are also exploring ways to cooperate with each other on further investments into the sector, reflecting increasing trade between the two countries.

Keppel Offshore and Marine says Asian players are keen to grow their oil and gas drilling business, previously dominated by US and European companies.

Choo Chiau Beng, Chairman and CEO, Keppel Offshore and Marine, says: "It's very profitable right now. So Asian players like PV Drilling find an opportunity to do it, especially there's a large demand for rigs and drilling services in Vietnam. Similarly there are other Asian players like China and in Indonesia. Indonesia and Vietnam are two of the hottest spots at the moment. This is a structural requirement, a structural demand for these rigs. India has a lot of drilling prospects. There's lots of wells to be drilled for oil and for gas in the whole of the Pacific region."

In Vietnam alone, some 300 oil wells are being drilled over the next 5 years.

Do Van Khanh, General Director, PetroVietnam Drilling, said: "The rig market in Vietnam is quite busy in the last few years and in another 5, 10 years as well. We target more on shallow waters because one of the fields in Vietnam so far now are producing from the shallow water."

Vietnam has over 600 million barrels of proven oil reserves.

And according to the national oil company, there is an ongoing feasibility study to open up deepwater exploration and production.

Vietnam is seeking to maintain an annual production volume of up to 400,000 barrels a day over the long haul and it expects to buy one more rig.

Tran Ngoc Canh, President, Vietnam Oil and Gas Group, said: "We have plans to discuss with Keppel Fels to cooperate in the near future to build a new jack-up and new FPSO in Vietnam. We are going to start discussion with Keppel Fels very soon."

Keppel says there's room to invest in a yard in Vietnam.

Choo Chiau Beng said: "We think that there are many areas where we can grow with PetroVietnam and Vietnam in general. They have a national desire to eventually have yards to service and build rigs. And if we're going to be near customer and near market, it is also our desire that eventually we can build with them."

Such a venture, however, may take some years to take off because of steep learning curve in the business.

Keppel's business in Vietnam include building of two wastewater treatment plants.

Other Singapore companies with investments in Vietnam include Singapore Petroleum Company and Asia Pacific Breweries.

Trade between the two countries rose almost 9 percent last year to over S$11 billion - making Singapore Vietnam's fourth largest trading partner. - CNA/ch