April 8, 2024
Joint Statement

For Vietnam’s Block B-O Mon Project,
We Demand Retraction of FID by Mitsui & Co.
and JOGMEC’s FID and Loan Guarantee Decision

Mekong Watch
Friends of the Earth Japan
Japan Center for a Sustainable Environment and Society (JACSES)
Kiko Network
Oil Change International
In the end of March, Mitsui Corporation announced its final investment decision (FID) andthe Japan Organization for Metals and Energy Security (JOGMEC) its FID and loan
guarantee provision to Vietnam’s Block B-O Mon project (offshore gas field development andtransportation of gas by pipeline to the power complex) in their press releases (*1, 2). We
environmental NGOs urge Mitsui and JOGMEC to retract their decisions and JOGMEC toend support for this project. This project will lock in new greenhouse gas (GHG) emissions
and worsen the climate crisis. We are deeply disturbed that JOGMEC and Mitsui decided toinvest in Block B-O Mon despite the human rights problems too.
The global average temperature has already exceeded 1.45 degrees Celsius above thepre-industrial baseline (*3), making the 1.5 degrees goal of the Paris Agreement jeopardy ofachieving. In such circumstances, we urge “transition away from fossil fuels.” The existingfossil fuel projects need to be phased out and there is no space for new ones on this planet(*4).
Vietnam’s Block B-O Mon is a project to develop Block B gas field (Lot B&48/95 and Lot
52/97) located in the south west offshore of Vietnam and transporting the extracted gas bypipeline with a total length of 433km (offshore about 330km and onshore about 100km) tothe O Mon power complex. The gas field part would be the upstream of the project and thepipeline part the mid-stream. The downstream project, O Mon power complex, is planned toconsist of four power plants with a large capacity totaling 3,810MW. One of the plants (OMon I: 660MW) is already in operation but up to date only at emergency situations using fueloil (*5), thus the GHG emission due to power generation is limited. However, if the gas
supply by the pipeline takes place enabling full time operation, the emission would
significantly increase. And if O Mon II, III, IV (each 1,050MW) get constructed and start
operation, then GHG emission from the complex would accelerate climate change, worsen
air pollution, and hinder decarbonization of Vietnam.
Also, not only the GHG emission from the combustion at power plants is the concern, but thefact that the main constituent of the gas, methane, poses considerable global warming
impacts. Methane is 80 times more potent than carbon dioxide when looked at the first
20-year span (*6). Methane is leaking at various points throughout the gas supply chain (*7)
and IPCC reported that next few years will be critical for limiting global warming toapproximately 1.5°C, which includes a significant reduction in methane emissions, by abouta third by 2030 (*8). Both Japan and Vietnam are participants to the Global Methane Pledge(*9) and putting efforts in methane reduction. Japanese companies or the Japanese
government should not support new gas field development or new gas related infrastructure.
Mitsui & Co. has stakes in both upstream and mid-stream through its wholly owned
subsidiary Mitsui Oil Exploration Co., Ltd. (MOECO) and it said it made a final investment
decision and made related contracts on March 28 with the project partners (*10) andannounced it the next day. JOGMEC has stakes in the upstream through a joint venture with
MOECO. JOGMEC approved the provision of loan guarantee to the Block B-O Mon projecton March 26, and announced that on March 28 together with its determination of final
investment decision.
The Block B-O Mon project not only has environmental problems but human rights issues
also. One of the project partners, a resource development company PTTEP, happens to be awholly owned subsidiary of Thailand’s PTT Public Company Limited (PTT), but theNorwegian Government Pension Fund has designated PTT as excluded from investment
reasoning the conduct of PTTEP being one of the funding sources of Myanmar military
which continues to commit inhumane acts (*11). Besides, in Vietnam, multiple environmental
defenders have been arrested in the last few years and citizens have been unable to speak
freely about environment and energy policy (*12). The decisions by Mitsui & Co. andJOGMEC are wrong from the perspective of business and human rights also.
The government of Japan have committed at the 2022 G7 Elmau Summit to “end new directpublic support for the international unabated fossil fuel energy sector by the end of 2022,
except in limited circumstances clearly defined by each country consistent with a 1.5°C
warming limit and the goals of the Paris Agreement,” hence the decision by JOGMEC
deviates from this commitment. It is analyzed by the Climate Action Tracker that Vietnam isplanning for a rapid growth in fossil gas consumption, though the massive efforts Vietnam’s
government is directing towards the gas sector development are not 1.5°C compatible andraise the spectre of significant stranded asset risks (*13).
Thus we object to the decisions of Mitsui & Co. and JOGMEC and request their retraction.
In addition, the Japan Bank for International Cooperation (JBIC) and private banks are
considering finance support for the mid-stream part of this Block B-O Mon project now. We
urge them to reject support for this project. Finance should be directed to energy efficiency
improvement and the renewable energy sector. Gas should be kept in the ground, so thisnew project plan to extract and expand the use for power generation should not be enabled.

Contact:
Mekong Watch
info@mekongwatch.org
Note*1: https://www.mitsui.com/jp/en/release/2024/1248975_14372.html*2: https://www.jogmec.go.jp/english/news/release/news_10_00061.html

*3: World Meteorological Organization, "State of the Global Climate 2023",
https://wmo.int/publication-series/state-of-global-climate-2023, March 19, 2024
*4: IEA, "Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach",https://www.iea.org/reports/net-zero-roadmap-a-global-pathway-to-keep-the-15-0c-goal-in-reach, September
2023*5: JICA, FY 2018 Ex-post Evaluation Report, https://www2.jica.go.jp/en/evaluation/pdf/2018_VNV-2_4_f.pdf*6: Nature, “Control methane to slow global warming fast”, https://www.nature.com/articles/d41586-021-02287-y,August 25, 2021
*7: IEA, ”Global Methane Tracker 2024”, https://www.iea.org/reports/global-methane-tracker-2024, March 2024
*8: IPCC, “The evidence is clear: the time for action is now. We can halve emissions by 2030.”,
https://www.ipcc.ch/2022/04/04/ipcc-ar6-wgiii-pressrelease/, April 4, 2022
*9: Global Methane Pledge, https://www.globalmethanepledge.org/*10: Vietnam Oil and Gas Group (PVN), PetroVietnam Exploration Production Corporation Limited (PVEP),
PetroVietnam Gas Joint Stock Corporation (PV Gas), PTT Exploration and Production Public Company Limited(PTTEP)*11: NBIM, Observation and exclusion of companies,
https://www.nbim.no/en/responsible-investment/ethical-exclusions/exclusion-of-companies/*12: OHCHR, Press Briefing Notes “Sentencing of environmental human rights defenders in Viet Nam”
https://www.ohchr.org/en/press-briefing-notes/2023/09/sentencing-environmental-human-rights-defen
ders-viet-nam, September 29, 2023
*13: Climate Action Tracker, Viet Nam 20 Nov. 2023 Update,https://climateactiontracker.org/countries/vietnam/policies-action/