Attracting Foreign Investment Is Key to PetroVietnam’s Modernization | Company

Vietsovepetro oil rigs in the Bach Ho oilfield (Photo: VNA)

Hanoi (VNA) – Over the past 30 years, foreign investors have injected $45 billion into Vietnamese oil and gas, contributing greatly to the growth of the sector, according to the Vietnam Oil and Gas Group (PetroVietnam).

In the past, the company only signed contracts with foreign contractors on behalf of the government and took on the role of managing their business. PetroVietnam now has a comprehensive capability of technologies to engage in oil and gas exploration and exploitation activities both domestically and overseas. This capacity matches PetroVietnam with the national oil and gas groups of other countries in the region.

Currently, more than 40 foreign oil and gas companies are investing in Vietnam upstream, midstream and downstream. Chevron from the United States leads investments in Vietnam, along with KNOC from the Republic of Korea, Gazprom from Russia, Petronas from Malaysia, PTTEP from Thailand, Talisman and Repsol from Spain, ExxonMobil from the United States and Total and Neon Energy of France.

The majority of companies invest in capital contributions from Vietnamese companies to carry out oil contracts. In addition, Vietnam has also signed a cooperation agreement with Russia to establish joint ventures to carry out oil exploration in Russia and Vietnam. Thanks to the cooperative activities, so far, 38 oil and gas fields out of a total of more than 100 oil and gas discoveries have been put into operation.

During the period, Vietnam saw its reserve increase from 35 to 40 million tons of oil equivalent per year. The average production reached 15.5 to 17 million tons of oil and more than 9 billion m3 of gas per year. As a result, in the period before 2015, the oil and gas industry annually contributed 20-25% to the total collection of the state budget and 18-25% of the country’s GDP.

Rapid growth

Thanks to its collaboration with foreign partners, PetroVietnam has accessed many advanced technologies, adopting modern and integrated management methods.

According to
Vietnam Oil and Gas Association, the partnership with foreign entrepreneurs in the upstream phase of oil and gas exploration and exploitation has contributed to the formation of a series of major projects in the middle and downstream of the oil industry. These include gas processing plants, gas-fired power plants, petrochemical refineries and nitrogen fertilizer plants. These were put into use and contributed to the development of the country’s economic development, national industrialization and modernization.

Specifically, the oil and gas sector has successfully implemented three key national project clusters/projects, namely Ca Mau Gas – Electricity – Fertilizer Project Cluster; Dong Nam Bo Gas – Electricity – Fertilizer Project Cluster and Dung Quat Oil Refinery Project. These projects are effective not only economically but also contribute greatly to the socio-economic development of the country as a whole and that of the localities where the projects are located.

Oil and gas technical services supply chains for exploration and production activities have also grown significantly. Many member companies of PetroVietnam such as PTSC, PV Drilling, PVEP, PVE have provided petroleum technical services for oil and gas activities not only within the country but also in the region and globally.

PetroVietnam member companies are proficient in new technologies and are able to participate and provide most high quality oil and gas services when requested. These include seismic surveys, drilling, drilling services, design surveys, construction and installation of oil and gas plants, as well as the repair and construction of new floating oil storage facilities and gas. Each year, the income of oil and gas technical services contribute nearly 30% of the group’s total turnover, and account for 10% of PetroVietnam’s state budget payment./.

Keith P. Plain