BIENDONG POC’s cuts oil production costs 12% in turbulent market

Hanoi (VNA) – Thanks to a cut of about 4.4% in operational costs, the overal cost to produce one barrel of crude oil by Bien Dong Petroleum Operating Company (BIENDONG POC) is likely to drop 12% this year compared to the yearly plan.

BIENDONG POC, a member of the State-owned Vietnam Oil and Gas Group (PetroVietnam), anticipates that it is facing a bumpy road to the end of 2022 as a result of soaring oil prices, supply chain disruptions and a spike in input costs.

Given that rising oil prices probably presents a good opportunity for BIENDONG POC to increase revenue, the State-run firm plans to persuade parties to approve a plan for the expansion of drilling sites and exploration activities in the near future in an attempt to increase recoverable reserves.

BIENDONG POC will take measures to minimise negative impacts on condensate production at Hai Thach gas field and prevent early flooding at Moc Tinh field, optimising the exploitation of the wells there.

In addition, the firm will carefully examine and monitor the operational machinery of the system to respond to any abnormal signals.

At a working session with leaders of the Vietnam Oil and Gas Group (PetroVietnam), General Director of BIENDONG POC Ngo Huu Hai proposed that PetroVietnam support the firm in processing necessary procedures to conduct the exploration of blocks 05-2 and 05-3 to boost production at the Hai Thach – Moc Tinh gas field cluster in the medium and long term.

PetroVietnam General Director Le Manh Hung said he will call on the Vietnam Gas Corporation (PV Gas) to ramp up purchases of gas from BIENDONG POC to help the latter fulfil its business goals.

Hung vowed that PetroVietnam will push for early approval of its report on reserves of blocks 05-2 and 05-3 at the National Council for Assessment of Mineral Deposits, allowing BIENDONG POC to soon put them into operation and increase output. PetroVietnam also plans to ask the Government, concerned ministries and agencies to adopt a set of four measures to improve economic efficiency of these two blocks.

In the first six months of this year, BIENDONG POC fulfilled all of its production and business goals. Its gas production exceeded the target by 8%, while condensate production also surpassed the plan for the period by 26%.

So far, the firm’s accumulated revenue has reached 4.29 billion USD, while its operation costs have been 3.64 billion USD.

During the period, its parent company PetroVietnam pumped 5.48 million tonnes of crude oil in the first six months of this year, surpassing the set target by 23%.

Meanwhile, gasoline production exceeded 14% of the plan, fertiliser production exceeded 8% of the plan, production and supply of gas, electricity and other energy products also reached a high level.

The group’s revenue in the period was estimated at 468.3 trillion VND (20 billion USD), up 55% year-on-year and double the goal set for six months.

It contributed 66.1 trillion VND to the State Budget, 2.2 times higher than the half-year plan and an increase of 41% compared to the same period last year.

This is considered a remarkable achievement in a context of global geopolitical and economic instability, caused by the conflict in Ukraine, increased inflationary pressures and China's Zero COVID policy.

In 2021, PetroVietnam was listed among three biggest companies in Vietnam behind Samsung Vietnam and Vietnam Electricity (EVN), according to the VNR500 rankings unveiled by Vietnam Report JSC.

The rankings were compiled based mainly on enterprises’ total revenues and other performance criteria such as total assets, employees, growth rates, profits, and prestige on the media.

PetroVietnam posted revenue of 620.2 trillion VND last year, surpassing the yearly plan by 26.4%, and up 28% year-on-year./.