PetroVietnam stands firm amid “double crisis”

Tuesday, Sep 22, 2020 12:41

Oil rig in Bach Ho (White Tiger) field in Ba Ria-Vung Tau Province. — VNA/VNS Photo Huy Hung

Viet Nam’s oil and gas industry has been a bright spot in the global energy map despite the “double crisis” of a steep decline in oil prices and the COVID-19 pandemic which has engulfed the global oil and gas industry since the beginning of this year.

The outlook for the global oil and gas industry has become bleaker than ever. Big names such as Saudi Aramco, BP and ExxonMobil have all faced rising debts or had to sell assets to compensate for budget deficits.

With the COVID-19 crisis triggering a nosedive in oil prices, BP – a British multinational oil and gas company – forecast the oil market will be in deep recession for a long time and decided to sell US$20 billion worth of assets, especially in the field of exploration.

Saudi Aramco, an oil giant from Saudi Arabia, lost 50 per cent of its profit in the first half of 2020 while suspending a deal to build a $10 billion refining and petrochemical complex in China.

Meanwhile, the US’ ExxonMobil – one of the world’s largest oil and gas companies – was recently removed from the Dow Jones Industrial Average and is facing a budget deficit of $48 billion in 2021. It is predicted to suffer about $1.9 billion in losses this year after posting two consecutive quarterly losses for the first time in its history.

Data from the International Energy Agency (IEA) show that investment in global oil and gas activities in 2020 has fallen 30 per cent to $328.4 billion, while noting that oil and gas businesses have had to cut investment amid tumbling revenue.

In Viet Nam, PetroVietnam, one of those with extensive international integration, was no exception.

During the first eight months of this year, complex developments from COVID-19 greatly affected its performance in most fields it operates in.

Braving the difficulties, PetroVietnam still managed to maintain its key production and business activities, with oil and gas exploitation surpassing 8.2 per cent of the target and State budget contributions nearing VND45 trillion ($1.94 billion), while the supply of key commodities for the economy was ensured during the period.

These figures stand out amid the gloomy picture of the global oil and gas industry, which is currently under pressure from both declining demand and increasing supply.

PetroVietnam has undergone a number of trying times, but many experts and insiders say this current period is the most difficult in its history. But it still stands firm.

As a pillar of the economy assigned major responsibilities by the Party, the State, and the people, PetroVietnam and its staff, with a tradition of dedication and trained in hardships, have gradually weathered the difficulties to fulfill their duties.

Exerting efforts to create and maintain cohesion in the group’s staff, its leaders have identified the problems faced to share knowledge and experience, warn of risks, and encourage one another to together overcome the challenges, thereby building up trust, harmonious coordination, and unanimity in its apparatus for the sake of the group’s development.

PetroVietnam believes that it will achieve targets set for 2020 over the remaining months of the year, as it has thoroughly geared up solutions and resources to be ready to cope with the “double crisis”.

Among the eight groups of solutions it has identified to deal with the current circumstances, two are being implemented in a proactive, concerted, and drastic manner.

The first includes improving the quality of corporate governance, boosting decentralisation, overhauling its document system and internal management regulations, stepping up digitalisation, and promoting risk governance. Meanwhile, the second covers capitalising on technological solutions to lower expenses and improve productivity, and reducing and delaying spending on non-urgent activities to minimise production costs.

At a working session with PetroVietnam on September 10, Permanent Deputy Prime Minister Truong Hoa Binh stressed the group's responsibility for helping guarantee national energy security and serving as a locomotive for national development. It is an economic pillar of the country, acts as a tool of the Government in regulating the macro-economy, and makes substantial contributions to the State budget.

He noted that PetroVietnam could be proud of itself, becoming a major brand name in the country and the world with a scientific-technological capacity comparable to other groups in developed nations, and boasting high competitiveness.

Applauding it overcoming difficulties and posting impressive production and business results, the Deputy PM said that State-owned enterprises had a substantial role to play in Viet Nam reaching the 2020 growth target, and PetroVietnam’s contributions would be of critical importance. — VNS

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