PetroVietnam bucking trends with positive business results

Last month 1.8 million tonnes of oil and gas was produced, exceeding initial projections

PetroVietnam hit revenue of VND38.3 trillion ($1.66 billion) last month, exceeding 1.6 per cent the figure from April and contributing an estimated VND4.3 trillion ($187 million), increasing 8.2 per cent compared to previous months, to the state budget.

In May around 1.8 million tonnes of oil and gas was produced, exceeding the plan by 1.1 per cent. In the first five months of the year, it had achieved 8.99 million tonnes of the products, a 4.4 per cent rise against the plan.

PetroVietnam generated 2.04 billion kilowatt hours of electricity in May, an increase of 4.2 per cent of its monthly plan, and generated more than 9 billion kWh in the first five months. The results demonstrated continuous and stable operation by PV Power – PetroVietnam’s subsidiary to produce electricity, contributing to the nation’s electricity market.

The group also produced 155,600 tonnes of fertiliser (8.3 per cent higher than its target) in May, and 757,200 tonnes in the first five months, over 8 per cent from the year’s plan.

Another positive sign was a reduction in the inventory of petroleum products at the end of last month. In particular, inventories at Binh Son Oil Refinery and Nghi Son Petroleum Products Distribution decreased by 23 and 65 per cent, respectively.

Fertiliser product inventories of Ca Mau Fertiliser Plant decreased by more than 48 per cent.

PetroVietnam insisted that without drastic measures, it would have suffered like the rest

Timely response

In the first five months of 2020, both domestic and large international corporations have been facing difficulties and big losses due to the impact of the double crisis from the lowest-ever global oil price and the COVID-19 pandemic.

In their first quarter business reports, many oil and gas giants revealed serious losses such as Italy’s Eni ($3.22 billion) and Russia’s Rosneft ($1.1 billion), while US-backed ExxonMobil lost $610 million and British giant BP lost $4.36 billion.

Meanwhile, PetroVietnam recorded positive business results with a contribution of VND28.9 trillion ($1.25 billion) to the state budget.

In its management, manufacturing, and business activities, PetroVietnam proactively developed and promptly deployed urgent solutions to cope with the dual effects of the epidemic and low oil prices.

The group issued a resolution to all of its subsidiaries and affiliates to actively capture and update market information on supply, demand, and fluctuations in prices of crude oil and petroleum products; and to have a suitable plan and scenarios for every context, including halting exploitation from oil and gas fields or operation from refineries if required.

In addition, the group’s leaders regularly have held briefings with units and sectors in order to grasp the situation for production and business, promptly removing difficulties and instructing suitable solutions for each unit and sector.

According to CEO of PetroVietnam Le Manh Hung, the task for subsidiaries and affiliates was to closely follow the situation, proactively point out forecasts and assessments, and prepare specific solutions for both the short and long term. It also has to timely report difficulties to group leaders to find ways to solve and best implement planned targets.

PetroVietnam and its subsidiaries have urgently developed internal regulations throughout the group to manage and operate production and business activities during the COVID-19 pandemic safely.

Alternative efforts

In addition to the implementation of aforementioned solutions, PetroVietnam and its subsidiaries and affiliates have drastically reduced costs with the highest goals of safety, health, and a strong working environment for staff.

At a time when many international corporations and oil and gas companies have cut jobs, PetroVietnam has not been alone in timely, reasonable, and practical measures which are agreeable with its employees.

As a result, by the end of May, PetroVietnam has reduced costs with a total value of more than VND8.7 trillion ($378 million), bringing consolidated after-tax profit of VND7.1 trillion ($309 million) in the first five months.

Hung affirmed that if PetroVietnam did not perform solutions drastically, synchronously, and effectively, it would also have suffered huge losses like other oil and gas giants.

However, he added that in the time to come, based on current evaluations, even though the demand of oil and gas and related products have been increased gradually, challenges are still ahead. “The group will continue its efforts to exchange and update information, and timely offer solutions to overcome this tough time,” Hung said.