At the meeting. — Photo courtesy of Petrovietnam
Vietnam National Oil and Gas Group (Petrovietnam) is actively pursuing strategies to ensure the continuity of oil and gas production in 2023 in the face of various challenges in its production and business operations.
This becomes especially crucial as many of Việt Nam's key oil fields are experiencing natural declines, and several member units lack the capacity for substantial investments in new mining ventures.
According to Petrovietnam, the current market supply and demand conditions have exhibited several shortcomings since the beginning of the year. These include a low capacity to mobilise electricity, resulting in significantly lower gas procurement than planned and in comparison to previous periods.
Consequently, there is an excess of gas production, which has repercussions on the targets for crude oil production. Additionally, it hampers the achievement of long-term reserve increases and planned production expansions for these units. Simultaneously, the drilling plan encounters challenges in procuring floating vehicles and drilling rigs due to a competitive market environment and soaring rental costs.
Notably, certain units face constraints due to impending expiration of oil and gas contracts, affecting field development and the extension of operational areas. Furthermore, some mining clusters grapple with complex geological formations and mining technology, which significantly impacts mining efficiency. Joint Operating Companies (JOCs) primarily contend with equipment wear and damage after years of continuous operation, necessitating prompt maintenance, repair, and replacement to mitigate the risk of falling short on gas mobilisation targets.
In alignment with the directives of the Government and the resolutions of the Standing Committee of the Petrovietnam’s Party Committee, on September 19, Petrovietnam’s General Director, Lê Mạnh Hùng, issued Directive No. 6167/CT-DKVN. This directive outlines updated objectives and strategies aimed at securing the 2023 management plan. It encompasses five distinct solution groups, which focus on production improvement, business enhancements, financial stability, strategic investments and strengthening value chain connections.
To put these solutions into action, General Director Lê Mạnh Hùng conducted a direct meeting with Petrovietnam's operational units and its oil and gas contractors managing blocks and fields on the Vietnamese continental shelf on Friday to review the situation and propose solutions to ensure the successful execution of the 2023 oil and gas exploitation plan.
Petrovietnam's general director Lê Mạnh Hùng inspects the Sao Vàng CPP project in Bà Rịa-Vũng Tàu Province.
At the meeting, operators such as Vietsovpetro, BIENDONG POC, Idemitsu, PVEP-POC, Cửu Long JOC, Hoàng Long - Hoàn Vũ JOC, and JVPC presented various geological, engineering, and technology solutions to ensure sustained production throughout 2023. They also discussed opportunities for future output increases.
Furthermore, the units requested support from the group in resolving legal issues and expediting government approvals for mine development and contract extensions, preparing for the next phases of growth.
In response to the proposed solutions by the executives, General Director Lê Mạnh Hùng emphasised the importance of ongoing efforts in volatility management, cost control and vigilant monitoring of market trends. He urged the units to implement exploitation activities judiciously, particularly seizing opportunities for increased cash flow and profitability during favorable oil price periods.
Hùng further called for a thorough review and reevaluation of limitations and risks, accompanied by the formulation of effective mitigation plans. He stressed the need to prioritise solutions aimed at enhancing management and operational efficiency, reducing costs, and implementing technical measures to improve the oil recovery coefficient. Additionally, he encouraged the units to combat the natural output decline and remain dedicated to overseeing and advancing investment projects in exploration and exploitation.
Furthermore, he emphasised the continued effective execution of existing value chains and the collaboration in developing new value chains to maximise available resources and infrastructure. This collaborative effort is essential for realising the full potential of the investment value chain, ultimately leading to increased revenue and profits.
In the first eight months of 2023, PVN has surpassed its production targets, exceeding the assigned plans by an impressive margin ranging from 3 per cent to 29 per cent. Notably, crude oil production reached 7.06 million tonnes, surpassing the plan by 14.5 per cent. — VNS