PetroVietnam posts profit of over VND10 trillion despite twin crises

The Vietnam Oil and Gas Group (PetroVietnam) still enjoyed profit of more than VND10 trillion and contributed over VND38 trillion to the State budget in the first seven months of 2020 despite Vietnam being hit by COVID-19.

petrovietnam posts profit of over vnd10 trillion despite twin crises hinh 0
PetroVietnam General Director Le Manh Hung speaks at the virtual meeting (Photo courtesy of PetroVietnam)

It was an outstanding result given that many of the leading oil and gas groups and companies around the world have posted significant losses this year, cut down their operational scale, and let employees go.

At a recent virtual meeting between the group and its member units regarding production and business, General Director Le Manh Hung said that with the early and flexible implementation of a number of solutions in response to the “twin crises” of oil price fluctuations and COVID-19, the group maintained production and ensured the supply of strategic commodities such as gas, electricity, fertiliser, and petrol for the economy.

Specifically, PetroVietnam carried out five groups of general and detailed solutions in five operational aspects, with a focus on the three fields most affected.

Production units such as Vietsovpetro, the PetroVietnam Exploration Production Corporation (PVEP), Rusvietpetro, the Bien Dong Petroleum Operating Company (BDPOC), PVGAS, and the Binh Son Refining and Petrochemical JSC (BSR) reached or surpassed targets set.

Total oil production from January to July stood at 12.52 million tonnes of oil equivalent, exceeding the seven-month plan by 5.3% and representing 61.5% of the annual plan. Electricity production in the period reached 12.75 billion kWh, meeting 99.3% of the seven-month plan and 59% of the annual plan.

Nitro fertiliser production totalled 1.06 million tonnes, exceeding the seven-month plan by 6.7% and equalling 67.7% of the annual plan. Petrol production was 7.37 million tonnes, for 95% of the seven-month plan and 62.4% of the annual plan.

Of note, PetroVietnam’s exploration activities recorded an important milestone last month when the group confirmed a large oil and gas reserve at Ken Bau well, which is expected to open up more opportunities to attract investment in exploitation and processing, the gas power industry, and oil and gas services in the time to come.

PetroVietnam also successfully put into operation the Song Hau Thermal Power Distribution Centre on July 10, signed a contract on management and operations with the National Power Transmission Corporation (EVNNPT), and successfully fired up Turbine 1 at the Song Hau 1 Thermal Power Plant Project for the first time on July 28.

According to Hung, positive production and business results during January-July resulted in sound financial outcomes, despite the average price of oil falling to US$44 per barrel in the period, equal to just 73% of the planned price of US$60 assigned for 2020.

The group, therefore, reported total revenue of VND327.8 trillion in the first seven months of this year and profit of over VND10 trillion, while contributing VND38.7 trillion to the State budget.

It has also exerted every effort to cut unnecessary costs, saving VND5.6 trillion, or 60.4% of the target, in the period.

Given the complex developments of COVID-19 and oil prices remaining at around US$40 per barrel, Hung said the group will maintain the synchronous implementation of solutions it has set forth and remain abreast of the disease’s developments as well as oil price fluctuations to make a timely response.

The Vietnam Oil and Gas Group, formerly known as the Vietnam Oil and Gas General Department, is a State-owned corporation established on September 3, 1975. It is engaged in the energy sector, including oil and gas and renewable energy. Over the course of its more than 40 years, PetroVietnam has grown into a fully-integrated business model, ranging from exploration - production, refinery - petrochemical, gas industry, and gas to power/fertiliser and petroleum technical services. As a leading corporation in the field, the group has a key role to play in accelerating national economic growth, highly-qualified human resources, international integration, and overseas investment.