Proactively adapt to energy transition trends
Currently, energy transition (ED) is a term that is often mentioned in energy forums in Vietnam and around the world. It is an inevitable transition process in the shift from biomass energy sources, fossil energy... to clean, renewable and sustainable energy sources. This trend has been strongly promoted when in recent years, current and future activities in the energy sector globally are all moving towards a low-carbon economy with the ultimate goal of zero carbon emissions. At the United Nations Climate Change Summit in November 2021 (COP26), Vietnam, along with 150 countries, made a strong commitment to the goal of carbon neutrality. In particular, the Vietnamese Government has committed to achieving net zero emissions by 2050.
Along with strong commitments at COP26, countries have developed and implemented a roadmap to deeply reduce carbon emissions, through major adjustments and changes in macro policies on energy and economy to promote the process of achieving this goal. And like many countries in the world, the Vietnamese Government has shown great determination in the issue of shifting traditional fossil energy sources to green, clean energy sources, aiming to reduce greenhouse gas emissions and combat climate change.
With the role of a leading state-owned economic group, the core in ensuring energy security and having a significant influence on the entire energy value chain of the country; a sense of responsibility to accompany the Government in implementing the roadmap for emission reduction according to national and international targets. It can be seen that the energy transition trend and the country's policy goals have had a profound impact on the present and future of enterprises in the energy sector in general and Petrovietnam in particular. However, along with the challenges, there have also been opportunities to expand the value chain of petroleum products. Faced with that context, Petrovietnam has proactively researched and planned strategies to adapt and take advantage of opportunities in the energy sector to continue to develop, maintain its pivotal position, and contribute more to the country's economy.
During the process of formation and development, the Oil and Gas industry has always received the attention and close direction of the Party and the State; the position of the Oil and Gas industry has been affirmed by the Politburo in Resolution No. 41-NQ/TW dated July 23, 2015, specifically "Developing the Oil and Gas industry into an important, key, complete, and synchronous economic-technical sector, including exploration, prospecting, exploitation, transportation, processing, storage, distribution, services and import and export; making an important contribution to the cause of national construction and defense". In the new context and situation with many changes compared to previous forecasts; At the same time, stemming from the urgent need to create conditions for the development of the Vietnam Oil and Gas industry in general and Petrovietnam in particular, on April 24, 2024, the Politburo issued Conclusion No. 76-KL/TW on the implementation of Resolution No. 41-NQ/TW on the orientation of the Vietnam Oil and Gas Industry Development Strategy to 2025, with a vision to 2035 and some orientations for the new period. Conclusion 76 affirmed the goal of "Developing the Vietnam Oil and Gas Group into a national energy industry group" with a core position and role in ensuring the country's energy security. This is an important orientation, opening up new space for the development of Petrovietnam in the new journey.
To implement this strategy, Petrovietnam has a solid foundation, sufficient resources and many strengths to help the transition process be carried out quickly, sustainably, improve efficiency and save money based on: Strong financial capacity and high level of financial independence; Owning a synchronous infrastructure system according to the oil and gas value chain with many similarities with the CDNL orientations; Oil and gas is an economic - technical sector with high scientific and technological level, intellectual content and international integration; Petrovietnam has extensive and multilateral cooperation with foreign partners in the energy sector, so there are opportunities to cooperate and absorb knowledge and technology about CDNL; In particular, Petrovietnam has built a team of high-quality human resources trained and equipped with knowledge about technology, project management, risk management and equipped with knowledge about technology and environment; this will be very useful in implementing CDNL projects.
As of December 31, 2023, Petrovietnam's total consolidated assets reached over 1 million billion VND (equivalent to about 43 billion USD) - the only Vietnamese enterprise that is not a bank with assets of over 1 million billion VND (Petrovietnam's asset size is only after 4 banks: Agribank, BIDV, VietinBank, Vietcombank); equity of over 530 thousand billion VND (23 billion USD); average annual total revenue equivalent to about 9-10% of the country's GDP; average annual State budget contribution reaches 9-9.5% of the country's total budget revenue. Fitch Rating, the world's leading credit rating organization, has continuously rated its credit rating at BB+; accurately reflecting Petrovietnam's strong business and financial situation.
Currently, Petrovietnam's domestic crude oil production output averages 7.5-8.5 million tons/year; gas output reaches 6-8 billion m3/year. Every year, Petrovietnam supplies over 13.5 million tons of various types of gasoline and oil, meeting about 70% of domestic gasoline and oil demand; supplies 1.8 million petrochemical products; and supplies 1.6-1.7 million tons of nitrogen fertilizer, meeting 70-80% of domestic nitrogen fertilizer demand (about 2 million tons/year). Petrovietnam is commercially operating 9 power plants with a total capacity of 6,600 MW, equivalent to 8.5% of the total installed capacity of the national power system. Petrovietnam's main products such as crude oil, gasoline, natural gas, liquefied gas, electricity, nitrogen fertilizer, etc. have participated in all life activities of the country with a large proportion; making an important contribution to the stability and development of the socio-economy; ensure national energy security, food security, economic security and participate in protecting national defense sovereignty and security at sea.
Petrovietnam regularly updates and applies advanced, modern technology, approaching world-class standards in its operations; researches and develops new products and services; seeks investment opportunities in potential new projects; improves techniques, converts existing factories and works to optimize capacity, improve quality and diversify products, goods and services, helping to reduce costs, enhance competitiveness and efficiency. Petrovietnam is the only Vietnamese enterprise with a famous award for scientific research, in 2022 it was awarded: 3 Ho Chi Minh Prizes, 3 State Prizes for Science and Technology (accounting for more than 20% of the total awards of the whole country) and 7 scientific and technological research projects won the VIFOTEC award; along with many other prestigious creative awards. These projects all originate from production and business practices and are applied and promoted effectively in the Group's operations. Petrovietnam also regularly connects and cooperates in research with partners and large corporations in the world to anticipate and prepare for the strong trend of CDNL; proactively and vigorously promote scientific research programs and build a development roadmap for renewable energy (RE) and new energy (offshore wind power, hydrogen, green ammonia), CO2 capture and conversion.
The system of affiliated and member enterprises of Petrovietnam such as: Vietsovpetro, PVEP, PV GAS, BSR, PVOIL, PV Power, PVFCCo, PVCFC, PTSC, PV Drilling, PVTrans... are all known as enterprises with strong potential, effective operations, leading positions in industries and fields of the country's economy.
These are the solid foundations, bases and great comparative advantages of Petrovietnam on its journey to transform into a national energy industry group; helping Petrovietnam to be qualified to successfully implement strategic goals, as well as increase its ability to endure, adapt and overcome difficulties and fluctuations in the process of implementing the strategy.
Thorough preparation and initial success
In recent times, along with continuing to maintain existing production and business activities, promoting oil and gas exploration and exploitation activities to take advantage of the country's oil and gas resources, Petrovietnam has proactively researched and built a new development roadmap based on promoting the existing advantages of the industry. These include orientations on developing new energy sources, renewable energy, expanding the value chain of oil and gas products such as: Offshore wind power (EEW), coastal wind power; importing and supplying LNG; increasing the proportion of gas in exploration, exploitation, electricity production and petrochemical and chemical processing activities; developing the hydrogen/ammonia value chain, including production, storage, transportation and distribution; developing charging stations/fuel cells, taking advantage of the existing infrastructure at gas stations; developing mechanical engineering industry, energy engineering services, participating in the global value chain; developing CCS/CCUS carbon capture and storage technology... In each field of operation, Petrovietnam develops specific strategies, as well as tasks, solutions and organizes implementation in a systematic manner, suitable to the characteristics and advantages of each industry and field. Petrovietnam's units are also proactive in updating and adjusting strategies and long-term plans, in line with new trends.
In parallel with the orientations, Petrovietnam has implemented long-term scientific research programs to serve the Group's operations such as: Additional basic research program, applied research to assess potential, increase oil and gas reserves with new technology and advanced technical solutions to develop and exploit oil and gas fields to ensure economic efficiency; Research program, development of production, storage, transportation, distribution and effective use of hydrogen; Program to develop and apply technology to recover, store and use CO2 at the Group's production facilities; Program to develop production and application of new chemical and petrochemical products, advanced materials and clean fuels from domestic raw materials, with large markets, export potential and high profit margins; Program to research and assess the impact and influence of renewable energy development and the energy transition process on the Group's development strategy and response solutions; The program researches solutions (mechanisms) and technologies to combine and integrate the business infrastructure system of current and future key products, increase overall economic efficiency, increase scale, and enhance competitiveness in the business of Petrovietnam's key products... Units within Petrovietnam also proactively build research programs in areas of strength, in line with the transformation orientation and development strategy of the unit.
Not only stopping at research and preparation, Petrovietnam has gradually participated and had initial successes in shifting towards new trends. It can be mentioned that PTSC is the pioneer and is currently the most capable general contractor in Vietnam in the field of LNG, quickly participating in the supply chain of design, production and supply of LNG equipment for many partners and large projects in the world; PV GAS is the pioneer and only unit in Vietnam currently importing and trading LNG; PVOIL participates with partners to deploy the installation of electric vehicle charging stations at gas stations; production and research units such as VPI, BSR, PVFCCo, PVCFC... also constantly research and launch new products and materials with high value such as: thermoformed PP plastic granules TF4035 with many superior properties, high applicability and environmental friendliness; high-quality petroleum products serving the military such as Jet A-1K, DO L-62, RON 83; successfully producing Carbon Nano Tubes (CNT) from CO2-rich natural gas; slow-release fertilizers coated with nano materials; lubricants containing additives based on Graphene materials, helping to reduce fuel consumption and emissions... Units in the Group have also continued to promote investment in facilities and infrastructure, promote cooperation and research with domestic and international partners to implement strategic orientations...
It can be said that transformation is a mandatory goal and task for Petrovietnam to ensure its existence and development. With the role, position and mission of "Energy for development"; with the attention, leadership, close direction and facilitation of the Party and Government, especially through the orientation for the development of the Group in the new period; along with promoting the traditional culture of Oil and Gas "Aspiration - Intelligence - Professionalism - Affection", in the spirit of "one team, one goal", the whole Group will continue to open up opportunities in difficulties and challenges, "renew old motivation and add new motivation", to "reach new heights", bringing Petrovietnam to soon complete the goal of becoming a national energy industry group; always growing and developing sustainably, being the pride of Oil and Gas workers and the trust of the people of the whole country.
| Petrovietnam has proactively researched and planned strategies to adapt and take advantage of opportunities in the energy transition to continue to develop, maintain its pivotal position, and contribute more to the country's economy. |
Le Ngoc Son - General Director of Petrovietnam
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