On Oct. 8, in the press conference of Quarter III, Vietnam Oil and Gas Group (PVN) proclaimed its business result of the first 9 months of 2014, with all planned targets achieved and development pace maintained. The press conference was hosted by Mr. Nguyen Xuan Son, Chairman of PVN’s Member Council, and Mr. Le Minh Hong, Vice President PVN’s Member Council.

Mr. Nguyen Xuan Son and Mr. Le Minh Hong hosted the press conference

Development pace maintained

As reported by PVN, to implement 2014 targets and tasks, by the end of 2013, PVN assigned 2014 plan to each of its affiliates and issued Action Plan No. 604/ CTr- DKVN dated January 23, 2014 directing its affiliates to build their action plans, actively implement appropriate solutions in accordance with their actual conditions, thereby, the affiliates’ business operation and investment into projects could conform to the approved plans; thrift practices and waste prevention enhanced, cost prices reduced; specialized conferences and workshops on separate themes organised for evaluation, experiences drawn and solutions unified for action in 2014.

As a result, in the first 9 months in 2014, PVN completed all its planned targets, increased the oil and gas reserves, reaching 28.53 million tonnes of oil equivalent, equal to 81.5% of the annual plan. 05 new oil and gas ores were discovered and 3 new contracts were signed. Total output of oil equivalent of the first 9 months reached 20.34 million tonnes, of which 12.71 million tonnes were crude oil and 7.64 billion m3 were gas. PVN produced and supplied 11.92 billion kWh to the national grid, produced 1.23 million tonnes of urea, 4.06 million tonnes of assorted types of gasoline and oil.

Total revenue of the first 9 months of all PVN’s affiliates reached VND 560.1 trillion, equal to 119.5% of the 9-month plan and 84% of the annual plan. PVN’s contribution to the State budget reached VND 125.5 trillion, equal to 124% of the 9-month plan and 89% of the annual plan.

In general, in the first 9 months of 2014, PVN and most of its affiliates basically maintain positive business paces and exceed the planned targets of the 9-month plan. Its contribution to the State Budget exceeds 24% as compared to the 9-month contribution plan, equal to over VND 24.3 trillion (or USD 1.14 billion). Exploration activities are implemented in accordance with the plan, environmental safety for oil and gas facilities are ensured, PVN’s projects are implemented on schedule; equitization, divestment, company restructure at PVN are carried out efficiently in strict compliance with PVN’s Restructuring Plan approved by the Government.

Based on the above-mentioned achievement results of the targets of the first 9 months of the year, and actual present situation, Mr. Le Minh Hong notified the press of PVN’s key tasks to be executed in the last 3 months of the year. PVN will strive to increase the oil equivalent reserves of 35-40 million tonnes, 25.71 million tonnes for oil and gas, 16.21 million tonnes for crude oil (1.84 million tonnes beyond Vietnam’s territory), VND 666.5 trillion for revenue and VND 140.5 trillion for contribution to the State budget. Moreover, PVN will also make great effort to produce and supply 15.70 billion kWh to the national grid, produce 1.525 million tonnes of urea, 4.636 million tonnes of all gasoline and oil types.

Key solutions for Quarter IV

To reach the finish of 2014 track fruitfully as it was done in previous years, 10 missions and key solutions for Quarter IV were set forth by PVN, i.e. giving on-going directions and urging its affiliates to carry out PVN’s Action Plan in accordance with governmental Decree No. 01/NQ-CP dated January 1st, 2014 and PVN’s Member Council’s 2014 key task plan.

Specific solutions for operation and production included urging the petroleum contractors to ensure QIV/2014 plans for oil and gas exploration, oil field development, oil and gas exploitation as scheduled; closely controlling oil and gas activities in the South China Sea; inspecting and closely monitoring to ensure safe operation of gas transport systems, Ca Mau 1 and 2 Power Plants, Nhon Trach Power Plants 1 and 2, fertilizer plants, Dung Quat Oil Refinery; closely controlling project development progresses, focusing on the completion of procedures and approval of total cost estimates, amended total investment costs of projects, on-going urging the development of new product markets (fiber, biofuels); continuing the implementation of the "the Vietnamese are in favour of Vietnamese products" policy promulgated bythe Politburo and Directive No. 494/CT-TTg dated April 20, 2010 issued by the Prime Minister regarding the use of local materials, commodities in State-funded investment project tendering.

Q&A session between journalistsand PVN’s leaders

Questions from the press were related to such issues as: How does PVN divest its investments in non-majoring industries?  Evaluation on the competitive electricity market; PVN’s restructure progress and the challenges; Investment efficiency of PVN’s investments overseas;…. Besides, the journalists also requested for further information on PVN’s equitization, progresses of Long Phu Thermal Power, Blue Whale and Junin2 projects, biofuel application process, the Russian counterpart’s plan for buying the shares of Dung Quat Oil Refinery, etc...

Each of the above questions from the press was addressed by PVN’s leaders, specifically, divestment rate at PVN’s 11 affiliates was inconsiderable, specific plans and solutions were set forth; PvcomBank and OceanBank were waiting for detailed guidance from the State Bank as prescribed by the Government.  By 31 December 2015, PVN’s divestment will surely catch up with the set schedule. Restructure plans of PVN’s 18 affiliates were approved and being conformed to during execution, in accordance with the master restructure plan approved by the Government.

Acquisition of shares of Dung Quat Oil Refinery was being carried out favorably through negotiation between PVN and Gazpromneft, many documents were agreed and signed, it was expected to be finalised by the year end.

Since its participation in the competitive electricity market, PVN’s power plants proved to be efficient and their roles well undertaken, direction plans were given to the affiliates for proactive preparation before taking part in the competitive wholesale and retail electricity markets in the near future.

With 17 projects operating overseas, PVN’s reserves fund is huge, approximately 170 million tonnes of oil for Vietnam market, however, it is facing with enormous challenges, requiring the support from the State, related ministries and departments. Junin 2, a project with gigantic reserves, is jointly being developed in Venezuela,but due topolitical instabilityandinflation, highly volatile exchange rate and highly increased project costs, the oil and gas services of this project are below expectation, so PVN is reviewing its investment ratio to negotiate with its counterpart on cooperation term modification.

Blue Whale, PVN’s biggest gas project ever, draws great concern from the public. The project’s work plans are presently deployed actively, synchronously and on schedule; the first gas stream is expected by 2021 if things take place favorably.

As a pioneer, PVN is cooperating with related local authorities to bring the biofuel program to life through the combination and trading process,E5 gasoline use. Preliminary success is found in Quang Ngai and on-going development is carried out in 7 major cities and provinces under the Government’s direction.

On behalf of PVN, Mr. Nguyen Xuan Son thanked the mass media for their on-going follow-up, active advocacy of PVN’s activitiesand he hopedto receive continued concomitance and motivation so that PVN’s political tasks, assigned by the Communist Party and the State, could be fulfilled, to contribute to Vietnam’s energy security, and simultaneously enhance PVN’s reputation and brand name for international cooperation and global integration.

By Tien Dung – Hien Anh

08/10/2014
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