Offshore oil field Bach Ho (White Tiger) of Vietnam. (Photo: VNA)Hanoi (VNA) – The government’s goalto extract an additional 1 million tonnes of crude oil by the year’s end to meetits economic growth target is very challenging, according to Chairman of theVietnam Oil and Gas Association (VOGA) Ngo Thuong San.
At a meeting with state-run corporations toseek stimulus for the national economic growth in early June, Deputy PrimeMinister Trinh Dinh Dung asked the Vietnam National Oil and Gas Group (PVN) toadd 1 million tonnes of crude oil to its projected output in order for thecountry’s GDP to grow by 6.7 percent this year.
The goal is not easy to achieve as theinitiative came late so PVN might struggle to ensure the target and sustainablemining, San warned. Moreover, it will be harder for the firm to fast-trackconstruction of facilities in new oil fields since the typhoon season startedlast month, he added.
Large reserves like Bach Ho, Su Tu and Te Giachave passed their peak while small ones don’t produce much. In addition, globaloil prices have crashed to below 50 USD per barrel, putting exploiters at riskof incurring more losses if they increase production, the chairman explained.
The PetroVietnam Exploration ProductionCorporation (PVEP), a member of PVN, said suspended investment in new oilfields and oil rigs during the past few years due to falling oil prices hasaffected its capacity to maintain and raise productivity.
The future for the oil and gas industry willbe tough, with major oil fields near shore about to be exhausted whileexploring new reserves offshore is costly, said Deputy Director the VietnamInstitute of Economics Le Xuan Sang. The cost of production in Saudi Arabia andRussia is only about 12 – 13 USD per barrel. For Vietnam, it is 40 USD, he said.
[Inflation projected to drop to below 3 percent in 2017]
VOGA Chairman Ngo Thuong San suggested thePVN seek advice from experts in mining production and management to deviseeffective solutions for the matter. He also urged the government and ministriesto provide the PVN with special mechanisms, for example, establishing a fundfor the firm to invest in high technology and equipment for exploration andproduction activities.
PVEP stressed that the company needs supportfrom the government, Ministry of Trade and Industry and the PVN to apply for aloan of 65 – 132.7 million USD to fulfill the goal.
If the oil price keeps hovering around 50USD per barrel, the extra one tonne of crude oil will contribute to the growthof 0.3 percent in GDP, San noted.
By June 28, the PVN had produced 7.89million tonnes of crude oil, equivalent to 55.6 percent of its yearly target.It has discovered a new reserve and put oil platform Tho Trang 3 into use fromMay 7, 13 days ahead of schedule.-VNA
VNA
