Illustrative image (Photo: pvdrilling.com.vn) Asoil prices are expected to remain high in the short term, enterprises in theindustry are believed to continue benefitting.
Bigreturns
VietnamOil and Gas Group (PetroVietnam) said that its total profit before tax in 2021will reach 45 trillion VND (nearly 2 billion USD), exceeding the yearly plan by2.6 times and increasing 2.2 times compared to 2020.
Thestate budget payment for the whole year was completed three months ahead ofschedule, with a value of 112.5 trillion VND in 2021, exceeding 80 percent ofthe whole year’s plan and up 36 percent compared to 2020.
PVOIL (OIL), a member of PetroVietnam, estimated its consolidated revenue reached55 trillion VND, up 8.8 percent compared to the same period in 2020. Thecompany’s consolidated profit before tax is estimated at 884 billion VND,exceeding 121 percent of the whole year plan.
Meanwhile,PV GAS (GAS), another member of PetroVietnam and a key player in the gasindustry, said that its revenue is expected to be nearly 80 trillion VND in2021, with estimated profit after tax of 8.38 trillion VND.
In2021, despite the complex development of the COVID-19 pandemic, Brent price hascontinuously set new highs and reached a seven-year high in early October 2021,contributing to positive business results of many oil and gas enterprises.
Thesurge in oil prices was driven by the recovery of global fuel demand, supplydisruptions due to Hurricane Ida in the US and logistics bottlenecks due to thepandemic.
Oversupplynot likely
Analystsfrom SSI Securities Corporation (SSI) said that oil prices were alwayssensitive to news of new COVID-19 variants, so there would be still risks inthe oil market. However, the recovery in fuel demand, especially in theaviation industry, and geopolitical uncertainty in Ukraine-Russia, which hadsparked concerns over tightened supply, were supporting oil prices.
Inaddition, according to the Organization of the Petroleum Exporting Countries(OPEC), the total number of oil and gas rigs in 2021 exceeded 2020 but ismuch lower than in 2019. As investment activities have shifted to green fuel,investment in fossil fuels has declined in recent years.
Therefore,oversupply may not occur in the short term, which will continue to support oilprices.
SSI'sbasic scenario is that the average Brent crude price reaches 70 USDper barrel, unchanged from the same period last year. For the Vietnamese oiland gas industry, oil prices of above 60-65 USD a barrel will boost explorationand production (E&P) activities in the long term.
In2022, SSI estimates the oil and gas industry’s profit growth to reach 20.6 percent,but still lower than the pre-COVID-19 levels. The main growth drivers for theindustry are PV Drilling (PVD), Petrolimex PetrochemicalCorporation (PLC), Petrolimex (PLX) and PV GAS (GAS).
WallStreet banks also forecast higher oil prices in the short and medium term, suchas Goldman Sachs sees Brent price reaching 90 USD per barrel by the end of thisyear, up from the previous forecast, which was 80 USD. Morgan Stanley raisedits long-term oil price outlook to 100 USD per barrel by the third quarter of2022.
However,from a long-term perspective, Viecombank Securities Company (VCBS) said thatcrude consumption demand for the transportation sector still accounted for morethan 65 percent of total demand worldwide, while the trend of electric vehicles(EVs) was growing strongly at a rate that was always in double digits per year.
Thesuccess of the smoke-free transport industry would greatly affect the globaldemand for oil. In addition, the explosion of the renewable energy industry indeveloping countries is also a prerequisite for the development of the EV trendin the regions. Therefore, VCBS believes that oil prices in the long term arestill in a downtrend.
Infact, the oil and gas industry was quite volatile in 2021, with oil and gasstocks up by 28 percent, while the VN-Index increased by nearly 36 percent.
Large-capstocks in the industry all gained lower than the market benchmark. For example,GAS rose by 14 percent, while PLX even slightly decreased by 1 percent. Despitestrong profit growth, PLX share prices were quite disappointing compared to thegeneral rally of the VN-Index.
Stockswith the best performance were in small and medium-cap groups, like Bình SơnRefining and Petrochemical Company (BSR) up 132 percent, PVD increased by 78.4 percentand PLC up 41 percent.
Oiland gas stocks were reevaluated on a large scale thanks to a strong rise in oilprices and abundant liquidity in the stock market, SSI added./.
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