Vietsovpetro presses on despite price slump

August 15, 2016 | 21:32
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Vietnam-Russia joint oil venture Vietsovpetro plans to expand its operation area in the coming years.

illustration photo

Speaking at the recent ceremony celebrating the company’s 35th anniversary, Vietsovpetro general director Tu Thanh Nghia said that the company is going to continue exploration and expand its operation area in order to increase its reserves. In addition, it will soon start exploitation at newly-discovered fields to keep output stable.

The company is also going to optimise headcount, streamline its expenses, increase productivity, and decrease production costs.

According to Nghia, the fields Vietsovpetro is currently exploiting have gone past their prime and output has been decreasing fast in unpredictable leaps and bounds. Also, the price of oil is still low, hovering around $40 per barrel in the first half of the year.

Vietsovpetro is a joint venture between PetroVietnam and Russian Zarubezhneft. It is the biggest joint venture dealing with oil in Vietnam. After 35 years of operation, it has exploited about 220 million tonnes of crude oil. It submitted to the Vietnamese state budget $47 billion and made the Russian side $11 billion.

Since exploiting its first tonne of crude oil, Vietsovpetro has been accounting for 62 per cent of the total output of all oil companies in Vietnam. Its revenue from crude oil sales accumulated at $74 billion as of early August.

After the White Tiger Field, Vietsovpetro found six more fields of oil and gas with significant output potential, namely Rong, Dai Hung, Nam Rong-Doi Moi, Thien Ung-Mang Cau, Gau Trang, and Tho Trang.

Vietsovpetro also earned $2 billion from servicing other oil companies.

In 2016, the company expects an output of 5 million tonnes of crude oil. With the average price at $45 per barrel, the company expects to earn $1.7 billion in revenue, submitting $700 million to the state budget and earning $129 million in profit to the Vietnamese side and $124 million to the Russian side.

Since falling below $40 per barrel in early August, the price of oil has started showing signs of a rebound, touching $45 today.

By By Thanh Huong

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