Oil and gas industry players should optimise operations and costs tosustain their margins as prices continue to decline, Steven Yap,consulting firm Deloitte's Southeast Asia energy and resources leader,told a seminar in Ho Chi Minh City on July 17.
While anumber of oil and gas operations would be suspended temporarily, otherscould increase production as the cost of input services tend to reducedue to the impact of the falling oil prices, he said.
"Companies drilling for oil and gas in Vietnam, both local and foreign,should reassess prudently the economic effects of every project to deferand/or cut costs.
"A more sustainable strategy would beto pursue innovative means of investing and managing capital andoperational expenditures that would include stress testing currentprocesses and collaboration through multiple means."
Hereminded participants, who were from the oil and gas industry, serviceproviders and bank, that they should consider mergers.
Pham Van Thinh, country managing partner of Deloitte Vietnam, said thefalling global prices pose a challenge as well as opportunity forcompanies in the industry globally and in Vietnam.
"Thechallenge is how to cut costs while maintaining the efficientperformance of a project as prices have declined more than 50 percentbut the opportunity is that as input costs reduce, the operating costswill also be lower.
"Despite the price fall that began in late 2014, M&A activities in the industry have been hectic."
He said businesses could suspend or defer some projects to focus on keyones to replenish funds for investing when the marker recovers.
"The cycle of an oil and gas field is relatively long, which requires alarge capital source for investing in exploration and developmentbefore gaining profit.
"Though the short- and medium-termgoals are cutting costs to improve efficiency, businesses need to thinkof sustainable growth."
The seminar, titled "Managing the New Challenges of Oil and Gas Projects", was organised by Deloitte Vietnam.-VNA
While anumber of oil and gas operations would be suspended temporarily, otherscould increase production as the cost of input services tend to reducedue to the impact of the falling oil prices, he said.
"Companies drilling for oil and gas in Vietnam, both local and foreign,should reassess prudently the economic effects of every project to deferand/or cut costs.
"A more sustainable strategy would beto pursue innovative means of investing and managing capital andoperational expenditures that would include stress testing currentprocesses and collaboration through multiple means."
Hereminded participants, who were from the oil and gas industry, serviceproviders and bank, that they should consider mergers.
Pham Van Thinh, country managing partner of Deloitte Vietnam, said thefalling global prices pose a challenge as well as opportunity forcompanies in the industry globally and in Vietnam.
"Thechallenge is how to cut costs while maintaining the efficientperformance of a project as prices have declined more than 50 percentbut the opportunity is that as input costs reduce, the operating costswill also be lower.
"Despite the price fall that began in late 2014, M&A activities in the industry have been hectic."
He said businesses could suspend or defer some projects to focus on keyones to replenish funds for investing when the marker recovers.
"The cycle of an oil and gas field is relatively long, which requires alarge capital source for investing in exploration and developmentbefore gaining profit.
"Though the short- and medium-termgoals are cutting costs to improve efficiency, businesses need to thinkof sustainable growth."
The seminar, titled "Managing the New Challenges of Oil and Gas Projects", was organised by Deloitte Vietnam.-VNA
