PetroVietnam (PVN) has proposed the Ministry of Industry and Trade approve the reduction of its ownership in PetroVietnam Drilling and Well Services Corporation (PVD) from 50.4 per cent to 36 per cent.

The proposal was included in a document PVN sent to the Ministry of Industry and Trade to supplement its restructuring plan, reported cafef.vn.

According to PVN, the oil and gas market has been volatile since 2014 due to the ups and downs of the global oil prices, surplus oil supply and protectionist policies overseas.

The US benchmark West Texas Intermediate (WTI) between 2014 and 2018 dropped from US$107.26 a barrel recorded in mid-June 2014 to a 12-year low of about $29.40 a barrel in mid-January 2016, then has gained steadily to close last week at $67.63 a barrel.

This cut PVD’s earnings in the last few years. Data on cafef.vn showed audited post-tax profit of the company dropped from VND2.54 trillion (nearly $112.9 million) in 2014 to VND1.75 trillion in 2015, VND185.6 billion in 2016 and VND35.5 billion in 2017.

In the first half of 2018, PVD posted accumulated losses of VND307 billion. In the second quarter, the company lost VND67 billion.

In late February, PVN proposed the Government approve a sale of State capital in PVD to reduce its ownership from 50.4 per cent to 25 per cent so the company would be able to attract private investors.

However, as PVD is a business with activities closely watched for national defence and security issues, PVN re-issued the proposal to cut its ownership in the subsidiary from 50.4 per cent to 36 per cent in 2018-20 so PVN will remain on PVD’s management board.

Under the plan, PVN will also sell all of its ownership in three other subsidiaries, namely PetroVietnam General Services Corporation (Petrosetco), PetroVietnam Mud Drilling Corp (PVDMC) and PetroVietnam Engineering Corporation (PVE).

The State-owned energy conglomerate holds 22.24 per cent of Petrosetco, 29 per cent of PVE and 36 per cent of PVDMC.

In addition, PVN hoped to divest from PetroVietnam Gas Corporation (PV Gas) and PetroVietnam Construction Corporation (PVC) after 2020.

Seven-month plan exceeded

PVN reported its seven-month post-tax profit surpassed the seven-month plan by 32 per cent to VND17.8 trillion. The figure also accomplished 94 per cent of the full-year target.

Total oil equivalent production in the period was 14.48 million tonnes, exceeding the plan by 4.6 per cent and accounted for 63.4 per cent of this year’s plan. The figure includes 8.32 million tonnes of oil and 6.17 billion cubic metres of gas.

The group paid VND61.8 trillion of tax to the State budget in the first seven months, 83 per cent of its full-year plan. – VNS