VN refinery predicts profit dip

Wednesday, Feb 22, 2017 09:14

Dung Quat Refinery sets modest targets this year. Despite global oil price increases, the firm is predicting a crude oil price drop and a shortened production calendar. — VNA/VNS Photo Huy Hung
Dung Quat Refinery in Quang Ngai province is aiming to decrease its turnover by 17 per cent this year, a 2017 target of VND62.4 trillion (US$2.77 billion).

Its 2017 profits are forecasted to plunge 66 per cent from 2016 to VND1.68 trillion.

The refinery plans not to export oil this year, while its exports in 2016 earned $28 million. Additionally, the firm is expected to invest an additional VND2 trillion and contribute VND7.2 trillion to the State budget, a VND5.2 trillion reduction from the previous year.

The State-owned Binh Son Refining and Petrochemical Company (BSR), an affiliate of Viet Nam National Oil and Gas Group (PetroVietnam)--which operates the US$3 billion refinery--has announced its approved production, business and investment plans in the 2016-20 period.

Its total expected turnover in the five year period was VND573.7 trillion, with average turnover of VND114.7 trillion a year. It yielded oil prices of $90 per barrel.

BSR said they set the modest targets, despite high growth last year, because they foresee an expected drop in crude oil prices and a shorter production time.

Last year, its turnover was around VND75.2 trillion, while its profit was more than VND5 trillion. It contributed VND12.4 trillion to the State budget.

In 2016, it spent more than VND1 trillion on its investments, spending 1.4 times more than the previous year.

Tran Ngoc Nguyen, BSR’s general director, told media that the set targets are based on the speculative oil price of $50 per barrel.

In addition, the refinery will halt its operation within 52 days for its third overall maintenance in the middle of the year.

However, we should strive for higher results than the set targets, as the oil prices have increased in the world market. The maintenance is also expected to be shorter than the scheduled plans, he added.

BSR also aims to maximise its operation and production to reduce costs, increasing effectiveness.

It has striven to bring its total yearly capacity to 98 per cent, with a total output of 5.8 million tonnes.

The refinery meets around a third of Viet Nam’s demand for fuel and oil products.

The refinery reported that last year, its average salary and bonuses for leaders was VND38.8 million a month, sharply decreased from the VND44.9 million in 2015.

It has proposed the Ministry of Labour, Invalids and Social Affairs consider applying its special mechanism for managerial salaries at companies with annual turnover over VND100 trillion. — VNS


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