Hanoi (VNA) – The Vietnam Oil and Gas Group (Petrovietnam)is striving to achieve the “dual goal” in the context of “dual crisis” from theCOVID-19 pandemic and the plunge in oil price, that is to ensure the effectiveprevention of the disease as well as maintain the production and business.

Petrovietnam currently provides most of the key products of theeconomy as input materials for many other manufacturing sectors.

However, the “dualcrisis” has hit the industry hard. According toreports of Petrovietnam subsidiaries, the key projects on exploration andproduction are currently affected by COVID-19. Many contractors will not beable to mobilise manpower to carry out the work on projects, while the supplyof materials and equipment to those projects from the pandemic-hit countriesunder blockade and quarantine is also interrupted or delayed.

Worse still, petrol stations and agents are restricting imports to wait forprice plunge and discount increase of retail price in the market compared toJanuary 2020, thus seriously affecting the products of Dung Quat and Nghi Sonrefineries in the central provinces of Quang Ngai and Thanh Hoa, respectively.

In the first monthsof this year, although the output of most fertiliser products of Petrovietnam's plants reached and exceeded the monthly plans, theconsumption of urea and NPK fertiliser did not come up to expectation becausedemand was still low in most areas of agricultural production. 

In terms of oil and gas technical services, similar difficulties wereencountered as investors and contractors tended to cut and optimise productioncosts. In the immediate future, the COVID-19 pandemic will cause a sharp dropin the international freight rates for all vessel sizes. The sharp drop in oilprices will also affect the price of drilling rigs as when re-signing thecontracts, the users will request re-negotiations of prices.

When the consumption of petrochemical products and the efficiency of oiland gas production decrease sharply, the revenue from oil sale and contributionto the State budget from crude oil will also drop dramatically as compared tothe planned price of 60 USD per barrel.

Specifically, if the oil price is at 60 USD per barrel, revenue fromselling crude oil is 4.668 billion USD. Butif it drops to 30 USD per barrel, the revenue is only 2.362 billion USD. The contributionto the State budget will fall from 1.594 billion USD to 806 million USD. Correspondingly,Petrovietnam has lost 2.3 billion USD in revenue and nearly 800 million USDcontributed to the State budget.

Perceiving that difficulties and challenges are considerable, during the recentpast, with the motto of “Managing fluctuations, optimising values, promotingconsumption, striving to overcome difficulties, seizing opportunities andfinishing safely”, the group has drastically implemented short-term,medium-term and long-term solution packages in each field of activity:administration, investment, finance, market and policy mechanism to respond toand minimise losses caused by the “dual crisis”.

In the January-April period, the group produced 7.2 million tonnes of oil, exceedingthe four-month plan by 7.7 percent. Fertiliser and petroleum production wasestimated at 601,600 tonnes and 4.53 million tonnes, respectively, surpassingthe plan by 7.8 percent and 2.2 percent.

The group’s total revenue in the period was estimated at 203.9 trillion VND(8.7 billion USD), and contribution to the State budget, at 24.1 trillion VND.

In addition to ensuring production and business activities, Petrovietnamand its subsidiaries have focused on responding to COVID-19. The safety,security and prevention work of the pandemic at the units, construction sitesand plants has been carried out seriously and effectively by petroleumcontractors and units.

Speaking at a meeting on May 8 on the production and business activities inthe period under review, Petrovietnam President and CEO Le Manh Hung said themacro-economic situation is still volatile, and many factors related to thegrowth motivation still challenging. The group will continue to face manydifficulties. Therefore, for May and the remainder of the second quarter, the leadersuggested the units change their management way to make it suitable to thefluctuations as well as capture opportunities for growth recovery./.