During the online briefing on business management for the 11 months of 2022, Le Manh Hung, the CEO of Vietnam Oil and Gas Group (Petrovietnam), announced that the Group had successfully achieved all financial indicators and exceeded the projected oil and gas production output for 2022. This accomplishment indicates a year of surpassing assigned tasks, maintaining growth momentum, and setting new records for the organization.

Petrovietnam CEO Le Manh Hung chaired the regular briefing in December 2022

On December 9, 2022, Le Manh Hung, the CEO of Petrovietnam, presided over a regular business executive briefing with unit heads from across the Group. The meeting aimed to discuss the results of business activities in November and the 11 months leading up to that point, as well as to outline the plan for the remaining month of 2022. Additionally, the attendees deliberated on tasks and solutions for the upcoming year, 2023.

Present at the meeting were Mr. Hoang Quoc Vuong, Secretary of the Party Committee and Chairman of the Board of Members of the Group, along with comrades from the Standing Committee of the Party Committee, Board of Members, Deputy CEO, Heads of specialized departments/offices within the Group, and leaders from member units throughout the Group.

Petrovietnam Chairman of the Board of Directors Hoang Quoc Vuong and other leaders of the Group attended the meeting

In November 2022, both global and domestic macroeconomic conditions pertaining to production exhibited noticeable signs of rapid decline. Major countries and markets worldwide, including our own, witnessed a decrease in the Purchasing Managers’ Index (PMI), with all falling below the 50-point threshold. Specifically, the PMI for the United States in November 2022 was 47.7 points, the EU recorded 47.1 points, and China marked 49.4 points.

JP Morgan’s announcement indicated a persistent decline in the global PMI for the third consecutive month, dropping from 49.4 points in October 2022 to 48.8 points in November 2022, representing a 0.6-point decrease. This meant that the PMI remained below 50 points for the third month in a row.

Within our domestic market, the growth rate of industrial production showed signs of slowing down due to diminishing orders, increased input costs, and a scarcity of raw material supply. These factors highlighted a downturn in production, accompanied by a reduction in international trade flows and a contraction in overall production activities. Moreover, the prevailing recession, crises, and risks in financial and monetary markets continued to exert significant impact on the business community at large, including Petrovietnam.

Petrovietnam congratulates the completion of the oil and gas exploitation plan and financial targets in 2022

In November 2022, crude oil prices experienced significant fluctuations, with a complex and volatile trend. Global oil prices witnessed a sharp decline as China intensified its measures to combat the Covid-19 pandemic, resulting in a strict lockdown that further weakened oil demand. Additionally, Europe and the United States saw a continuous decline in oil demand due to economic recession, interest rate hikes, and a strengthening dollar. Notably, the EU’s decision to impose a price cap of $60 per barrel on Russian oil transported by sea had implications for the global oil market and Petrovietnam’s production and business activities.

In response to this challenging situation, Petrovietnam leveraged successful lessons learned from managing volatility. Throughout 2020 until the present, the company effectively implemented correct, timely, and flexible forecasts and assessments of geopolitical movements, oil and gas market fluctuations, and identified potential risks that could adversely affect its operations. Moreover, Petrovietnam adopted effective, timely, and flexible solutions in line with the action motto of 2022, which is “Manage volatility, catch trends, connect resources, promote technology, invest, and develop sustainably.” These efforts enabled Petrovietnam to achieve positive results in November and the first 11 months of 2022.

RC-10 rig, one of 5 new projects put into operation in 2022

In November 2022, the Group achieved 1 additional task and surpassed 3 targets, enabling the completion of the entire year’s plan ahead of schedule. The accomplishments include:

1. Putting the RCRB-1 rig into operation on November 16, 15 days earlier than the planned schedule.
2. Protein production completed the whole year’s plan 1 month and 14 days in advance, reaching 1.60 million tons on November 16.
3. Petroleum production (excluding NSRP) finished the whole year’s plan 1 month and 7 days ahead, reaching 6.17 million tons on November 23, 2022.
4. Overseas oil exploitation achieved the whole year’s plan 1 month and 1 day in advance, reaching 1.70 million tons on November 29.

As of November 16, 2022, the Group exceeded its annual plan for mine development. It successfully put 05 new mines/works into operation, one more than the annual plan. These works were operational 15 days to 2 months earlier than expected, significantly contributing to increased output and ensuring stable exploitation of the Group’s mines in 2022 and subsequent years.

Crude oil exploitation accomplished the entire year’s plan 2 months and 11 days ahead, reaching 8.74 million tons on October 20. In the 11-month period, crude oil exploitation reached 9.91 million tons, surpassing the year’s plan by over 13%, equivalent to the performance of the same period last year (9.97 million tons). Notably, domestic oil exploitation completed the whole year’s plan 2 months and 18 days earlier, reaching 7.04 million tons on October 13. Overseas oil exploitation achieved the entire year’s plan 1 month and 1 day in advance, reaching 1.70 million tons on November 29. Furthermore, the output of gas, electricity, protein, petrol, and other products all demonstrated an increase compared to the same period in 2021.

Petrovietnam has 03 typical scientific and technological projects and clusters awarded the Ho Chi Minh Prize, and 03 works awarded the State Prize in Science and Technology

The high production output has played a crucial role in Petrovietnam’s exceptionally positive financial results in 2022. The Group achieved its highest-ever record in total revenue and consolidated pre-tax profit (considering that in previous years, oil prices were much higher than the average level of 2022). The Group’s total revenue exceeded the full-year 2022 plan by 4 months, estimated at 854 trillion dong in the first 11 months, setting a new record since the establishment of the Group. Additionally, the Group completed its State budget payments for the entire year of 2022 6 months ahead of schedule, with an estimated amount of 134.5 trillion VND in the first 11 months of 2022.

Moreover, several other aspects of Petrovietnam’s work have seen active implementation and yielded outstanding results. The effectiveness of the linkage chains has improved, and the Group’s units have prioritized the deployment and enhancement of cooperative forms to optimize the value of resources and assets, thus boosting competitiveness and sustainable development. Scientific research, development, and technology applications have gradually become more efficient, making practical contributions to the Group’s production, business growth, and overall development. Petrovietnam has received prestigious awards, including the Ho Chi Minh Prize for 3 notable scientific and technological projects and clusters, as well as the State Prize in Science and Technology for 3 works, accounting for over 20% of the country’s total awards.

The implementation of the Petrovietnam Corporate Culture Regeneration Project has continued to yield positive results. Six petroleum units were honored as enterprises meeting the standards of Vietnamese business culture, representing 25% of the honored enterprises in the country. The Group remains committed to its consistent goal of digital transformation, accelerating the process to optimize production and business activities, enhance customer experience, improve competitiveness, and achieve practical benefits through digital transformation.

Furthermore, social security initiatives have been actively carried out, with the Group’s total expenditure reaching approximately 350 billion VND by the end of November 2022. The practice of thrift and anti-waste through cost reduction has been implemented at twice the planned rate, showcasing the Group’s commitment to efficiency and responsible resource management.

Petroleum production completed the whole year plan on November 23, 2022

Concluding the meeting, Petrovietnam’s CEO, Le Manh Hung, provided directives for production and business tasks in the remaining months of 2022 and preparations for entering 2023 across all operational fields. The key points are as follows:

1. Actively monitor macroeconomic fluctuations, government policies, market developments, and set goals and solutions for each field to make timely decisions in direction and control.
2. Focus on operating and exploiting to maintain output levels.
3. Develop investment strategies for 2023, particularly addressing obstacles related to mechanisms and policies that may arise upon the passage and implementation of the revised Petroleum Law No. 12/2022/QH15. This involves aligning with the major guidelines set by the Party and State regarding strategic orientations for the development of Vietnam’s oil and gas industry, sustainable growth of the marine economy, and national energy development.
4. Conduct a review of key products and services to establish appropriate orientations, plans, and development strategies. Optimize resources and governance models.
5. Promote research and development efforts to gain expertise in offshore renewable energy technology.

CEO Le Manh Hung acknowledged that the global production decline, coupled with uncertainties surrounding geopolitical situations, public debt, inflation, interest rates, and other factors, has led to a rapid increase in input prices. This poses a significant challenge that directly impacts the Group’s production and business activities in the fourth quarter of 2022 and is expected to continue affecting operations in 2023. Therefore, in addition to production solutions, it is crucial to prioritize volatility management, cost management, and market-oriented approaches for the Group’s products and services. The focus should be on identifying the necessary motivations and solutions to maintain stability and achieve sustainable growth throughout the Group.