Oil and Gas - The 'Locomotive' of Vietnam's Economy

On November 27, 1961, the first oil and gas organization in Vietnam - the Oil Exploration Group was established. After more than 6 decades with many ups and downs, generations of oil and gas workers have strived, worked hard, and determined to fulfill Uncle Ho's wish, which is "to build a strong oil and gas industry".

Maintain the role of "locomotive"

In the development journey, Petro Vietnam - the core enterprise of the Oil and Gas industry - has built a complete and synchronous oil and gas industry system from oil and gas exploration and exploitation to the development of gas - electricity - processing and oil and gas services; in which, oil and gas exploration and exploitation is the core field; at the same time, it has trained a large and highly qualified oil and gas workforce.

Since the first ton of crude oil was exploited in 1986, the Vietnamese Oil and Gas industry has so far exploited about 430 million tons of domestic oil and about 180 billion m3 of gas.

Oil and gas exploitation at Bach Ho field.

Oil and gas activities cover most of Vietnam's continental shelf and 200-nautical mile exclusive economic zone. Not only ensuring national energy security and making important contributions to the State budget, the oil and gas industry also makes important contributions to affirming Vietnam's sovereignty, sovereign rights and jurisdiction in the East Sea.

With 5 large gas pipeline systems, Petro Vietnam annually supplies nearly 9-11 billion m3 of gas for the production of 35% of the national electricity output, 70% of the nitrogen fertilizer output and 70-80% of the gas for domestic consumption in the country. Petro Vietnam is also the second largest enterprise in electricity supply with the total capacity of Petro Vietnam's power plants reaching 6,605 MW, accounting for about 15% of the total national electricity output.

Petro Vietnam's two fertilizer plants, Ca Mau Fertilizer and Phu My Fertilizer, supply the market with over 15 million tons of urea per year, meeting about 70% of domestic fertilizer demand, contributing to ending the situation of fertilizer scarcity and dependence on imported fertilizer.

Dung Quat Oil Refinery (NMLD), a century-old project, a symbol of Vietnam's petrochemical industry, has produced about 6 million tons of oil per year since it was officially put into operation, meeting about 30% of domestic gasoline and oil demand, especially meeting fuel requirements of the Ministry of National Defense...

More than 30 years ago, the Vietnam - Russia Joint Venture Vietsovpetro had to move the rig base from Baku (Azerbaijan) to install it offshore Ba Ria - Vung Tau province to serve the exploration and exploitation of oil and gas at Bach Ho field. Up to now, the Vietnam Oil and Gas industry has been able to manufacture, install and operate absolutely safe oil and gas exploration and exploitation rigs on the continental shelf of Vietnam.

Not only that, Vietnam's petroleum mechanical products are also exported, contributing to bringing in large foreign currency revenue for the country.

During the 2006-2015 period, Petro Vietnam contributed an average of 20-25% of total state budget revenue and 18-25% of the country's GDP. Since 2015, Petro Vietnam has continuously faced a series of challenges and difficulties due to economic instability, pressure from falling oil prices, the COVID-19 pandemic, geopolitical conflicts, and disruptions in the global supply chain...

In that context, with the courage of “fire seekers”, Petro Vietnam has stood firm and continued to achieve proud results. Petro Vietnam still contributes an average of 10-13% of the country’s GDP; accounts for 9-11% of total state budget revenue and 16-17% of total central budget revenue. The state budget revenue from crude oil alone accounts for 5-6% of total state budget revenue.

Oil and gas workers. (Photo: Nguyen Truong Son)

It can be seen that the Oil and Gas industry has become a special economic sector, an important macroeconomic regulation tool of the Government and an industry that has made many important contributions in solving the country's socio-economic problems.

Many projects and industrial factories of the Oil and Gas industry such as Dung Quat Oil Refinery, Ca Mau Gas - Power - Fertilizer Complex, Vung Ang 1 Thermal Power Plant, Thai Binh 2 Thermal Power Plant... have been implemented in various places and have achieved positive socio-economic development results.

In Quang Ngai, the province's GDP increased by 11.7% in 2005, budget revenue only reached 500 billion VND, but by 2016, Quang Ngai's total budget revenue reached 22.66 trillion VND, of which revenue from Dung Quat Oil Refinery accounted for more than 90%.

In the southernmost region of the country, along with contributing nearly 30% of the Ca Mau budget annually, the Ca Mau Fertilizer Plant, Ca Mau Power Plant 1 and 2 with a designed capacity of 1,500 MW, the PM3 - Ca Mau gas pipeline... play a decisive role in the economic development of this southernmost region. A purely agricultural region in the past, has now become a prosperous aquaculture region, exporting hundreds of millions of USD to the world market each year.

Even in a big city like Hai Phong, there is the mark of the Oil and Gas industry, with the provision of raw materials and fuel inputs for industrial production development, contributing to bringing in large revenues and profits for businesses, while contributing thousands of billions of VND to the local budget every year.

Firmly entering the new phase

In 2022, despite facing many difficulties and challenges in the post-COVID-19 pandemic period, thanks to seriously implementing the policies of the Party and Government and the direct direction of the Prime Minister, Petro Vietnam has been united, unified, disciplined, responsible, overcoming difficulties, and implementing synchronous and effective solutions.

By the end of 2022, Petro Vietnam achieved a record in crude oil production with 8.98 million tons; produced 1.88 million tons of nitrogenous fertilizer, exported 606 thousand tons, contributing 37.4% of fertilizer export turnover; produced gasoline to meet about 75% of domestic gasoline demand...

Since the first ton of crude oil was exploited in 1986, the Vietnamese oil and gas industry has so far exploited about 430 million tons of domestic oil and about 180 billion m3 of gas. Oil and gas activities cover most of Vietnam's continental shelf and 200 nautical mile exclusive economic zone.

Panorama of Ca Mau Gas - Electricity - Fertilizer Industrial Park.

In 2023, in the context of negative impacts of macroeconomic, geopolitical and market factors, over the past 10 months, Petro Vietnam has made efforts and been flexible in management and operation, maintaining stable, safe and continuous production and business activities and continuing to grow compared to the same period in 2022.

Specifically, Petro Vietnam has completed all financial targets, reaching the target 1.5 - 5 months ahead of the assigned plan for the whole year of 2023. Of which, the Group's budget payment completed the yearly plan 5 months ahead of schedule (reaching 78.3 trillion VND on July 30, 2023). The Group's consolidated profit completed the yearly plan 4 months ahead of schedule (reaching 34.7 trillion VND on August 31, 2023).

The Group's total revenue completed the yearly plan 2 months and 20 days ahead of schedule (reaching VND 677.7 trillion on October 10, 2023). The Group's total consolidated revenue completed the yearly plan 2 months and 18 days ahead of schedule (reaching VND 413.7 trillion on October 12, 2023). The target of increasing oil and gas reserves for the year was completed 1 month and 10 days ahead of schedule (reaching 12 million tons of oil equivalent/the yearly plan of 8-16 million tons of oil equivalent on November 20, 2023).

At the same time, Petro Vietnam had 02 new oil and gas discoveries at Block 16-2 (Ha Ma Vang -1X well) and at Block PM3-CAA (Bunga Lavatera-1 well). This is a very encouraging result as for the first time in the past 5 years, the Group has had 2 new discoveries in one year.

Domestic oil production completed the yearly plan 1 month and 18 days ahead of schedule, reaching 7.52 million tons on November 12, 2023. As of November 21, domestic oil production reached 7.71 million tons, exceeding the yearly plan by 2.5%, contributing significantly to the Group completing the yearly oil production plan (domestic and foreign) by reaching 9.29 million tons on November 21 - 1 month and 9 days ahead of schedule.

Petro Vietnam's petroleum production output (excluding Nghi Son) completed the yearly plan 2 months and 25 days ahead of schedule (reaching 5.53 million tons on October 6, 2023). The Group's petroleum trading output completed the yearly plan 2 months ahead of schedule (reaching 9.06 million tons on October 30, 2023).

PVOIL completed the annual plan of 3.3 million tons 4 months ahead of schedule. PVNDB is expected to complete the annual plan of 5.76 million tons 20 days ahead of schedule (on December 10-11, 2023), making an important contribution to maintaining the supply of gasoline and oil, thereby affirming that Petro Vietnam has performed well the task assigned by the Government, the Prime Minister, and the Ministry of Industry and Trade: " In all situations, there must be no interruption or shortage of gasoline and oil supply to serve the task of socio-economic development ".

2023 also marked a series of important milestones for Petro Vietnam. The signing of related contracts by Petro Vietnam and its partners and the implementation of the Block B - O Mon Project chain is the most important event, marking an important step forward in the chain of key gas-power projects that has lasted nearly 20 years.

This is a key state oil and gas project; the largest in Vietnam today with an expected gas output of 5.06 billion m3/year in the stable phase, supplying 4 O Mon thermal power plants in Can Tho with a total installed capacity of nearly 4,000 MW; playing a very important role in the strategy of balancing supply and demand, ensuring national energy security, green energy conversion and socio-economic development.

In addition, at the end of October 2023, the Thi Vai Liquefied Natural Gas (LNG) Terminal with a capacity of 1 million tons/year was inaugurated. This is the first and largest LNG terminal in Vietnam, marking a breakthrough for Petro Vietnam in diversifying products, new energy, expanding markets, meeting the goal of ensuring energy security, transitioning and greening national energy sources.

Vietnam's first LNG import ship docks at Thi Vai port warehouse.

Previously, Nhon Trach 3 Power Plant recorded a new milestone when it completed putting the generator and gas turbine into the foundation, creating an important premise to ensure the commercial power generation (COD) schedule in the fourth quarter of 2024 and the second quarter of 2025 for Nhon Trach 4 Power Plant.

When these two power plants come into operation, they will stably supply about 9 billion kWh to the national grid every year, not only increasing the local budget revenue by thousands of billions of VND each year, creating jobs for thousands of workers, but also contributing to promoting the clean energy transition in Vietnam, opening a new chapter in the development of a chain of LNG projects in Vietnam.

Many projects and industrial factories of the Oil and Gas industry such as Dung Quat Oil Refinery, Ca Mau Gas - Power - Fertilizer Complex, Vung Ang 1 Thermal Power Plant, Thai Binh 2 Thermal Power Plant... have been implemented in localities where they have achieved positive economic development results.

In addition, the high-quality oil and gas service sector also made its mark when PTSC - the main service unit of Petro Vietnam - became the first and only investor in Vietnam licensed by the Ministry of Natural Resources and Environment to carry out activities of monitoring, investigating, surveying, and evaluating marine resources to develop offshore wind power projects, serving the development of offshore renewable energy projects in Vietnam, exporting clean electricity to Singapore.

This is also one of the important projects contributing to the realization of the memorandum of understanding on building a green economic partnership - digital economy between Vietnam and Singapore, joining hands to complete the goal of achieving 6 GW of offshore wind power by 2030 of the Power Plan VIII, as well as the Vietnamese Government's Net Zero commitment at COP26...

It can be affirmed that the efforts of Petro Vietnam and its member units over the years have always been closely linked to the goals and aspirations of realizing Petro Vietnam's Development Strategy with the orientation of the national energy development strategy and the country's socio-economic development strategy; contributing to ensuring national energy security, while emphasizing the viewpoint of using resources economically and effectively, associated with protecting the ecological environment; proactively implementing solutions to mitigate and adapt to climate change; promoting the search and development of new energy, renewable energy...

Prime Minister Pham Minh Chinh affirmed that Petro Vietnam has made positive contributions to socio-economic development and the cause of building and defending the socialist Vietnam, especially in stabilizing the macro-economy, controlling inflation, ensuring major balances, and promoting economic growth.

With its contributions in recent times, it can be said that the Oil and Gas industry is a key economic sector, making an important contribution to ensuring national energy security, ensuring the country's rapid and sustainable economic growth, as well as protecting national security and sovereignty at sea, while making important contributions to international economic integration.

According to the Prime Minister's direction, in the new development phase, Petro Vietnam needs to focus on digital transformation, energy transformation, circular economy development, model shift, and labor productivity increase.

“ Petro Vietnam continues to unite, promote the spirit of daring to think, daring to do with the aspiration to build and develop the Vietnam National Oil and Gas Group as a core unit of the Oil and Gas industry, with strong financial and scientific and technological potential, highly competitive domestically and internationally, contributing significantly to the process of building, developing and protecting the Fatherland ” - Prime Minister Pham Minh Chinh emphasized.

With the tradition of solidarity, bravery and intelligence of oil and gas workers, with the "aspiration, intelligence, professionalism and loyalty" of Petro Vietnam culture, the Prime Minister believes that Petro Vietnam will successfully complete the plan for 2023 and the coming years, achieve many new achievements and records, maintain its role as a pillar state economic group, continue to contribute to the cause of national construction and protection, worthy of the trust and love of the Party, Government and people.

Bao Anh

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