PVN Company releases explanatory report

>> PetroVietnam causes $874 mln state budget loss

In response to public concerns over the Government Inspectorate’s conclusions about the group's management and misuse of capital, making unauthorised investments in some areas and in capital advance of VND18 trillion, without approval from the Prime Minister, PVN argued that the company had reported to the PM on all investments.

PVN used VND15.6 trillion (US$742.9 million) of profits to invest in non-key projects (including projects of Vietsovpetro, Petro Vietnam Exploration and Production Corp) but PVN leaders explained that during the inspection, the Government had not issued any criteria for key petroleum projects.

According to PVN, Vietsovpetro and PVEP were petroleum companies and should be worthy of investment.

However, these proposals had not been sanctioned by the Prime Minister.

Responding to questions about capital advances to non-petroleum projects in the central and southern provinces of Soc Trang , Ha Tinh, Quang Binh and Hau Giang worth a total VND622 billion ($22.6 million), without the approval of the Prime Minister, PVN  said the moves were aimed at supporting land clearance to facilitate the implementation of PVN projects.

PVN worked step by step with these provinces to regain liabilities, the report said.

With regard to the Inspectorate's request to collect VND1.922 trillion ($91.5 million) that PVN raised in equity from some member companies, PVN CEOs said Petro Vietnam Gas Corp had already paid over VND1.9 trillion ($90.6 million), equivalent to 99.4 per cent of the total due. The funds will be contributed to the business restructuring support fund.

PVN attributed the delay to late payments from Electricity of Vietnam to PVN's subsidiaries, including PV Gas. The report also said PVN would continue to urge other members to pay the remainder of what they owed to the fund.

Petro Vietnam did not cause any loss to State capital but did make unauthorised investments in some areas and in capital advances without approval from the Prime Minister. Upon the Inspectorate's conclusion, PVN had directed its member units and individual to self criticize to define responsibilities.

Besides the mistakes, however, in the first three months of this year, Petro Vietnam continued to perform well, surpassing most of its targets for the first quarter. At the end of March, its total revenue reached VND189.4 trillion ($9 billion), up 25.3 per cent year-on-year and exceeding the first-quarter target by 29.4 per cent.

The group's contribution to the State budget reached VND40.6 trillion ($1.93 billion), a year-on-year increase of 24 per cent and surpassing the previous target of 15.3 per cent.

Its total oil production in the first quarter reached 6.45 million tonnes, equivalent to 106 per cent of the first-quarter plan and up 7.2 per cent year-on-year. Oil sales were 4.03 million tonnes, 4.4 per cent above the target.