Extracting extra 1 million tonnes oil tough: Association

vietnamnews

Update: July, 05/2017 – 15:00

A corner of oil platform Thỏ Trắng 3. — Photo vietsea
Viet Nam News HÀ NỘI — The Government’s goal to extract another one million tonnes of crude oil by December to meet its economic growth target is challenging, the Vietnam Oil and Gas Association (VOGA) said.

At a meeting in early June with State-run corporations on stimulating economic growth, Deputy Prime Minister Trịnh Đình Dũng asked the Vietnam National Oil and Gas Group (PVN) to add another one million tonnes of crude oil to its projected output so that the country’s GDP can record 6.7 per cent growth in 2017.

This goal is not easy to achieve as the initiative has come late, and PVN may struggle to meet it and at the same time undertake sustainable mining, VOGA Ngô Thường San warned. Moreover, the company will find it tough to fast-track construction of facilities at new oil fields to extract the additional oil as the typhoon season started last month, he added.

Large reserves such as Bạch Hổ, Sư Tử and Tê Giác have crossed their peak output, while the smaller ones don’t produce much. In addition, global oil prices have crashed to below US$50 per barrel, which puts exploiters at the risk of incurring more losses if they increase production, San explained.

The PetroVietnam Exploration Production Corporation (PVEP), a PVN subsidiary, said that suspended investment in new oil fields and oil rigs in the past few years because of falling crude oil prices has affected its capacity to maintain and increase productivity.

The future for the country’s oil and gas industry will be tough as the major oil fields near the shores are close to exhausting production, but exploring new reserves offshore is costly, said Lê Xuân Sang, deputy director of Vietnam Institute of Economics. The cost of production in Saudi Arabia and Russia is only $12-13 per barrel, whereas for Việt Nam, it is $40, he said.

San suggested that the PVN consult experts in mining production and management to devise effective solutions. He also urged the Government and ministries to offer the company special mechanisms, such as establishing a fund for it to invest in advanced technology and equipment for exploration and production activities.

The PVEP said it needed support from the Government, the Ministry of Industry and Trade, and the PVN to apply for a loan of around $65 million to $132.7 million to achieve this target.

If oil prices continue hovering around $50 a barrel, the additional one million tonnes of crude oil will contribute to 0.3 per cent of the GDP growth, San noted.

By June 28, the PVN had produced 7.89 million tonnes of crude oil, which is 55.6 per cent of its annual target. It has discovered a new reserve, and put oil platform Thỏ Trắng 3 into use from May 7, 13 days ahead of schedule. — VNS

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This entry was posted in Economics - Kinh tế and tagged , by Trần Đình Hoành. Bookmark the permalink.

About Trần Đình Hoành

I am an attorney in the Washington DC area, with a Doctor of Law in the US, attended the master program at the National School of Administration of Việt Nam, and graduated from Sài Gòn University Law School. I aso studied philosophy at the School of Letters in Sài Gòn. I have worked as an anti-trust attorney for Federal Trade Commission and a litigator for a fortune-100 telecom company in Washington DC. I have taught law courses for legal professionals in Việt Nam and still counsel VN government agencies on legal matters. I have founded and managed businesses for me and my family, both law and non-law. I have published many articles on national newspapers and radio stations in Việt Nam. In 1989 I was one of the founding members of US-VN Trade Council, working to re-establish US-VN relationship. Since the early 90's, I have established and managed VNFORUM and VNBIZ forum on VN-related matters; these forums are the subject of a PhD thesis by Dr. Caroline Valverde at UC-Berkeley and her book Transnationalizing Viet Nam. I translate poetry and my translation of "A Request at Đồng Lộc Cemetery" is now engraved on a stone memorial at Đồng Lộc National Shrine in VN. I study and teach the Bible and Buddhism. In 2009 I founded and still manage dotchuoinon.com on positive thinking and two other blogs on Buddhism. In 2015 a group of friends and I founded website CVD - Conversations on Vietnam Development (cvdvn.net). I study the art of leadership with many friends who are religious, business and government leaders from many countries. In October 2011 Phu Nu Publishing House in Hanoi published my book "Positive Thinking to Change Your Life", in Vietnamese (TƯ DUY TÍCH CỰC Thay Đổi Cuộc Sống). In December 2013 Phu Nu Publishing House published my book "10 Core Values for Success". I practice Jiu Jitsu and Tai Chi for health, and play guitar as a hobby, usually accompanying my wife Trần Lê Túy Phượng, aka singer Linh Phượng.

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