PetroVietnam works to help remove legal barriers

The Resolution of the 13th National Party Congress views institutional reform and completion as one of the three strategic breakthroughs for the 13th tenure.

In the Government’s action plan to carry out the resolution, an important issue is to push ahead with completing institutions, mechanisms, and policies to develop the economy and society, promote production and business activities, and guarantee social security. The Cabinet also pledged to tackle institutional bottlenecks in this tenure.

During its operation, PetroVietnam has realised that many legal regulations have affected its operations.

Not only hoping for the current Oil and Gas Law to be amended to create a driving force for sustainable development, the enterprise has also been working to review obstacles that legal regulations have caused for its operations so as to submit revisions to competent agencies.

At present, there are about 60 contents and issues related to legal rules that need to be amended to create optimal conditions for the development of not only PetroVietnam but also other businesses, such as some stipulations in the Law on Public Investment, the Law on the Management and Use of State Capital, the Law on Enterprises, and the Law on Bidding.

For example, under the existing Law on Bidding, PetroVietnam will encounter difficulties in executing investment projects, especially its joint projects with foreign partners, which may lead to slow implementation and subsequently, economic losses.

In addition, given the oil and gas industry’s specific features, a number of problems facing PetroVietnam’s operations have yet to be mentioned, fully mentioned, or properly mentioned in current laws.

Apart from reviewing legal barriers, the group is also coordinating with the Ministry of Industry and Trade to draft the revised Oil and Gas Law, which is expected to be submitted to the National Assembly at the coming session.

PetroVietnam General Director Le Manh Hung said the obstacles caused by legal regulations have been directly affecting most of operational aspects of the firm and its subordinate companies.

In the current context, natural oil and gas resources are declining while it is increasingly difficult to conduct exploration and production in offshore deep-water areas.

Besides, mechanisms and policies for exploration and production activities, as well as investment in new projects, are facing numerous difficulties and challenges. Incentives to attract investment into oil and gas exploration and production have yet to prove attractive enough.

These problems have influenced the core business areas of PetroVietnam, Hung pointed out, adding that if issues in other aspects are also not resolved in a timely manner, the group may lack sufficient conditions and basis to keep following its strategy, which in turn may impact the country’s economic and energy security.

Making strong moves to eradicate institutional hurdles to enterprises as ordered by Prime Minister Pham Minh Chinh, PetroVietnam has been reviewing legal regulations to identify obstacles and propose appropriate amendments.

It expects the suggestions will help tackle difficulties in its management, production, and business activities, thereby giving it more chances to contribute to national economic development in the time ahead.

PetroVietnam reported that its pre-tax profit in the first half of 2021 surpassed the target by 165% and tripled from that in the same period last year, reaching VND21.3 trillion (US$934 million).

Its crude oil and condensate output exceeded 15% of the target, helping to fulfill the goal of tapping 9.68 million tonnes of oil equivalent. The output of petrol, oil and fertiliser was also higher than the respective targets.

The group’s total revenue hit VND299.3 trillion, up 20% from the revenue target and 22 percent on a yearly basis. Its contribution to the State budget soared by 33% to VND45.2 trillion.

With return on equity (ROE) reaching 4.6% in the first six months, PetroVietnam was among oil and gas companies with the best ROE in the world.