Offshore oil and gas exploitation

Prime Minister Pham Minh Chinh delivers a speech at the 2023 year-end review conference of Petrovietnam

Difficulties

Apart from being impacted by the general difficulties, Petrovietnam’s production and trading activities were affected by low, continuously declining market demand and gas and gas-fired electricity mobilization. High imports of petroleum products impacted domestic product sales, while demand had not improved, leading to increased inventory. Problems related to the mechanism for purchasing and supplying liquefied natural gas (LNG) affected business efficiency and caused risks for electricity and LNG projects. Additionally, the natural output decline of oil and gas fields has increased after long-term exploitation, while the room for increasing the exploitation output is shrinking, new project investment opportunities are limited, and changes in exchange rates have adversely impacted Petrovietnam’s operations.

Record growth

Through making efficient forecasts and implementation of administration solutions, especially in volatility management, flexible operations, and leveraging value chains, Petrovietnam has achieved remarkable achievements, ensured safe, stable production and trading operations, significantly contributing to maintaining the market’s stability and the country’s national energy security.

Petrovietnam optimizes the operation of its power plants, increasing electricity supply to the national grid

In 2022, Petrovietnam reached or exceeded all of its production and business targets, with the achievements growing 3-26 percent compared to 2021. In the same year, the group earned the total revenue of VND921.2 trillion, 67 percent higher than the yearly target and 48 percent more than 2021, setting multiple new records in its 61 years of formation and development.

Petrovietnam has made important contributions to macroeconomic and market stability, as well as increases in the country’s export value. The group’s accounted for 9.8 and 9.5 percent of Vietnam’s gross domestic product (GDP) and state budget revenue. Petrovietnam’s refineries have been operated at their maximum capacity, meeting over 75 percent of the country’s fuel demand, playing a crucial role in market stabilization.

Also in 2022, several delayed and challenged power projects, including the Thai Binh 2 Thermal Power Project, were restarted. The Song Hau 1 Thermal Power Plant was put into commercial operation, while preparation was made for the restart of the Long Phu 1 Thermal Power Plant project. These are key power source projects that will play a vital role in ensuring the country’s energy security in the coming years.

Petrovietnam plays an important role in ensuring petroleum supply and market stability

In 2023, Petrovietnam accelerated investment and put the Thai Binh 2 Power Plant into operation in the context of electricity demand rising significantly nationwide. The group’s power generation output reached 23.07 billion kWh, an increase of 31 percent compared to 2022. Its fertilizer plants operated at 114-115 percent of capacity. Fertilizer output reached 1.76 million tonnes, with opaque granular fertilizer production hitting 950,000 tonnes, a record high since Petrovietnam first produced this type of fertilizer. Its oil refineries operated at 105-112 percent of capacity. Petrol and oil output reached 7.36 million tonnes, the highest record since the Dung Quat Oil Refinery began commercial operation, exceeding the previous record achieved in 2022.

Last year, the group’s total revenue reached VND942.8 trillion, exceeding the annual plan by 39 percent and surpassing the 2022 record by VND11.6 trillion, equivalent to 9.2 percent of the country’s GDP. Tax payment reached VND151.8 trillion, exceeding the annual plan by 94 percent and accounting for around 9 percent of the total state budget revenue.

Petrovietnam has overcome investment bottlenecks with support of relevant authorities. The Prime Minister has provided direct guidance for the group to resolve long-standing difficulties to accelerate key projects and put them into commercial operation. These include the Thai Binh 2 Thermal Power Plant which commenced operation on April 27, 2023, the one-million-tonne Thi Vai LNG terminal which commenced operation on July 30, 2023, and four new oil and gas fields/facilities, which were put into operation 11 days to two months ahead of schedule.

Petrovietnam has also signed EPC contracts to develop fields under the Block B - O Mon gas-to-power chain project after many years of interruption. This is crucial to meet Vietnam’s growing energy needs for economic development in the coming years.

Petrovietnam focuses on optimizing management and applying technology to the increase in capacity and enhancement of business efficiency. Along with efforts to expand the market, it continues to implement technical solutions to optimize exploration and production (E&P). The group seeks support from relevant authorities to resolve bottlenecks in investment.

Oil and gas workers rescue fishermen in distress at sea

Social welfare is an important part of Petrovietnam’s long-term, sustainable development strategy. Even in difficult periods, the group maintained hundreds of billions of Vietnamese dong in funds for social welfare activities. Its donation for social welfare activities has grown from VND350 billion in 2021 to VND500 billion in 2022 and VND750 billion in 2023, and is expected to exceed VND750 billion in 2024.

Petrovietnam’s achievements have had a positive impact on Vietnam’s socioeconomic development. The group has done a good job of exploiting and increasing the value of Vietnam’s oil and gas resources, contributing significantly to ensuring national energy security, food security, economic security, and national sovereignty.