PVD success story rests on strong foundations

He lifts the lid on the firm’s commitment to quality, developing domestic engineering capacity and the importance of intensive human resource development to the firm’s sustainable development.

PVD accounts for 50 per cent of the drilling market share in Vietnam. In 2013, the company surpassed its business target. Could you tell us how your company achieved these positive results?

PV Drilling achieved an outstanding performance in 2013, and is proud to have been awarded The Most Admired ASEAN Enterprise Award for the category of Growth - Large Company by the ASEAN Business Association Committee, as well as The Best Drilling Contractor in Asia. Our corporation’s 2013 annual target approved by the AGM was reached after only nine months, and at the end of this year, revenue and net profits are around VND13,700 billion  and VND1,750 billion respectively, amounting to growth of 15 per cent and 28 per cent as against last year.

Consistently, PV Drilling safely manages the rig fleet with different specifications, ranging from land, jack-up to semi-submersible rigs with zero Loss Time Incident (LTI) and efficiency of over 98 per cent. PV Drilling is proud of maintaining the jack-up rig PVD I at zero LTI for the last six years, similarly PVD II and III at zero LTI for four consecutive years, and the tender rig with one year of zero LTI. PV Drilling is honored to have received “The Best Drilling Contractor in Asia” award for two consecutive years, 2012-2013, from World Finance Magazine.

Also, another key contributor to our excellent performance was the day rate for the jack-up rig fleet which has increased by 15-20 per cent on average year on year. The improved day rate was supported by the more eventful exploration and production (E&P) activities which required more drilling rigs. After safety awareness issues were raised by the Macondo incident these are now high-spec. With the young and new-generation jack-up rigs, PV Drilling is the main beneficiary of the upwards trend of the day rate.

Efforts over cost control are also worth mentioning. When PV Drilling managed the increase in operating costs of the rig fleet it did not adversely affect the profit margin. Meanwhile we still maintained the competitiveness to reward and retain our talented drilling crews.

PV Drilling expects to keep these growth drivers sustainable by maintaining our high efficiency rate. This is thanks to well-trained drilling crews and robust risk and operation management systems to ensure the safety and smooth operation of the rig fleet. With a strong track record and increasing rig demand, PV Drilling has a fixed contract backlog for our jack-up rigs for the next twelve months, which promises to be a good year.

Looking back at the 12 years of PVD’s development, what are the key elements leading to the success of the company today?

At its inception, PV Drilling was only a small workshop with basic drilling-related services. The turning point occurred on February 22, 2005, when PV Drilling officially signed a contract to purchase a newly-built jack-up rig from Keppel Fels (Singapore), which was the first ever jack-up rig wholly owned by a Vietnamese firm. After twelve years in operation, PV Drilling has a strong rig fleet with four offshore rigs (three jack-ups and one semi-submersible tender rig), and one land rig, together with the strong pipeline of traditional and advanced oilfield services.

The first key attribute to PV Drilling’s success is the consistent commitment to develop the core businesses of drilling and drilling-related services with an organic growth strategy, and timely investment decisions. As a result, capital resources have been wholly used to invest in new rigs and drilling-related equipment. The first jack-up rig was launched in 2007 with a three-year contract at the all-time high day rate. This brought enormous profit for the corporation. In 2009, two more rigs came online to immediately compensate for a significant drop in the day rate and helped the company   sustain an income stream. Furthermore, the TAD, operating in 2012, boosted profits to an all-time high.

Human resources play a vital role in the successful and sustainable development of PV Drilling. PV Drilling continuously trains our drilling crews to meet international qualifications and adapt to different technology and operational types of rigs. During 2007-2011, drilling crews mastered the running of a jack-up rig safely and efficiently. Also Vietnamese drilling crews became qualified with international certificates, so were able to gradually replace foreigners in key positions on the rig.  2012 marked the first year that PV Drilling successfully operated a semi-submersible tender rig which is totally different technology from the jack-up rig, and the drilling crew required higher qualifications.

Moreover, PV Drilling has expended great effort in order to integrate a synchronized management system which co-opted the latest information technology. Some of the major systems for rig operations are an inventory management system, the Reliability Centered Maintenance (RCM) Model and application of ERP Oracle into finance and accounting, human resource management, contracting and sales, and resource planning.

In conclusion, focusing on core business with investment into state-of-the-art drilling rigs, human resources and standardized management systems are the main attributes leading to the success and development of PV Drilling.

PVD has a strategy to expand business outside Vietnam. Could you tell us about this strategy?

PV Drilling has spent considerable efforts to realise the strategic vision of becoming an internationally reputable and reliable drilling contractor, and achieving sustainable development. Throughout the past years, PV Drilling has been preparing the necessary conditions for a high-spec rig fleet, well-trained human resources, risk management systems, as well as a financial management system to enable the strategy of “Cross the sea, Steady to the future”.

Our itinerary of the expansion scheme is divided into multiple stages, starting by consolidating PV Drilling’s position in the domestic market. On such a premise, PV Drilling will mobilize a proper portion of resources to bring its services to several approachable targets in the Southeast Asia region. In 2012, PV Drilling set up the representative office in Malaysia to study the market, to offer some drilling-related services as well as to attend the tender procedure for a drilling rig contract there. These experiences, concurrent with the track record of operating a land rig in Algeria since 2007, enhanced our reputation and confidence to execute overseas expansion.

At the beginning of 2013, PV Drilling founded a joint venture with local partners in Singapore, named PVD Overseas, to invest in a new high-spec jack-up rig (PVD VI), due for delivery in 2015. The rig pipeline from the Singaporean JV can be expanded until the horizon of 2017 to seize the bright opportunity of the drilling market. This material step will help to realize our goal to provide offshore drilling rigs in Southeast Asia region. This area has huge opportunities with a vast oil and gas potential and robust outlooks for E&P activities. This is feasible for our sustainable development based on a sound cost-benefit analysis. In the longer term, larger markets like the Middle East and the Gulf of Mexico are our ultimate targets.

You have also worked on a drilling platform, could you tell us about the character of the people working on such rigs?

Right the first day after graduating, with the role of a driller, my job was significantly different from what I had imagined via academic books and what I had studied. The greatness and modernity of the drilling rig, and of drilling equipment made me very surprised which was mixed with the pride as the desire to work in the drilling rig became reality.

Working in the drilling rig requires strict rules; especially the safety in running equipment, with movements and decisions required the absolute accuracy.

The unique characteristic of operating the drilling rig is equipment running at 24/7, non-stop even day or night, holidays or not. The drilling crews face pressure with tight working schedule, and high requirement of techniques. Besides, the working environment is tougher with the resonant of sounds from the roar of the machinery and intense sunshine.

Moreover, working in the drilling rig in the ocean far away from the shore requires the sacrifice to leave the family for a long time, which sometimes is very lonely.

However, with the perseverance, job commitment, as well as enthusiasm of youth, I strongly overcame these obstacles, and became stronger, more eager to dedicate to the work with the ultimate target of running the drilling rig with highest safety and accuracy.

These working days also reinforce the will, determination, and the passion for myself, that is the desire to master the drilling operation technology. Since then, my predecessor and I have built PV Drilling from the small workshop to be a large corporation which is the first and only drilling in Vietnam.

Most importantly, all challenges become immaterial when, with our drilling crews’ determined contribution, the drilling rigs keep discovering new oil and gas reserves, and boosting up the oil and gas productivity to ensure stable energy supply for the country’s development.