Petrovietnam maintains growth amid declining oil prices

Crude oil prices dropped sharply, negatively impacting the business activities of state-owned Petrovietnam in May, but the company still achieved high growth across all financial indicators.

On June 10, Petrovietnam CEO Le Ngoc Son chaired a regular meeting with leaders of company divisions to review the business results in the first five months of the year and outline plans for the following months. Chairman Le Manh Hung was in attendance.

The group's production activities remained safe and stable, ensuring the supply of essential products and contributing to socio-economic stability, it stated.

In May, all production targets exceeded plans by 6.1-35.5%, including crude oil extraction at 0.813 million tonnes, gas extraction at 608 million cubic metres, fertiliser production at 163,000 tonnes, electricity generation at 3.16 billion kWh, and petroleum production (excluding NSRP) at 531,000 tonnes.

Notably, Petrovietnam’s electricity production in May and the first five months exceeded targets.

On May 18, the Song Hau 1 power plant reached 10 billion kWh, an impressive milestone for a plant that started commercial operations nearly two years ago.

Petrovietnam also worked with relevant ministries, agencies, and localities to resolve issues with the Nhon Trach 3 and 4 power projects.

Average production in May from Block 09-1 by Vietsovpetro reached 8,069 tonnes per day, an increase of 146.9 tonnes per day compared to April, with 21 days exceeding 8,000 tonnes per day. The Dung Quat refinery operated safely after maintenance at 114% capacity.

In spite of the sharp decline in core product prices, particularly a 19.8% drop in petrochemical margins, Petrovietnam’s financial targets were exceeded by 34-92% for the first five months, with significant year-on-year growth.

Total revenue for the first five months was estimated at VND392.7 trillion ($15.43 billion), 34% above targets and 15% higher than the same period in 2023.

The group contributed VND55.4 trillion ($2.18 billion) to the state budget, 46% above the plan and 2% higher than the same period in 2023.

Consolidated pre-tax profit was estimated at VND22.1 trillion ($868.2 million), 92% above the five-month target and six% higher than the same period in 2023.

Chairman Le Manh Hung said that risks still remain for the group for the remainder of the year, such as inflation, currency depreciation, declining oil prices, and the energy transition.

Hung cautioned that the company needed enhanced risk management to respond to macroeconomic and market fluctuations and ensure operational efficiency. He also stressed the importance of updating strategies, development plans, and investment portfolios; and recovering outstanding debts.

CEO Le Ngoc Son highlighted the importance of maintaining production and financial targets, monitoring market trends, managing oil inventories amid declining prices, balancing domestic gas extraction and LNG imports, optimising operations and maintenance of plants and focusing resources on key projects.