Increase production efficiency, reduce costs

In September 2024, the world's purchasing managers' index (PMI) fell 0.7 points compared to the previous month, below the average for 3 consecutive months. In this general picture, Vietnam's PMI in September fell 5.1 points compared to August due to production conditions being heavily affected by Typhoon Yagi.

In the market, the average crude oil price in September and the first 9 months decreased compared to the same period in 2023. Following the trend of oil prices, the prices of petroleum products in September also decreased by 3-8% compared to the average of the previous month. In contrast, the prices of gas, fertilizer, and steel tended to increase.

In that context, thanks to the synchronous and effective implementation of management solutions, Petrovietnam's key production targets all exceeded the plan by 9.6 - 25.2% in September.

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PV Power and EVNEPTC signed the Power Purchase Agreement (PPA) for Nhon Trach 3 and 4 Power Plants, opening a new step for LNG-powered power projects.

On October 1, Vietnam Oil and Gas Power Corporation (PV Power) signed a credit contract of 521.5 million USD with two banks, Citi and ING, for the Nhon Trach 3 and 4 Thermal Power Plant projects.

On October 4, PV Power and EVNEPTC signed a Power Purchase Agreement (PPA) for these two plants. Also on October 4, Petrovietnam and EVN signed a memorandum of understanding on supplying LNG from the Vung Ang LNG warehouse to the Quang Trach II LNG Thermal Power Plant.

Regarding production targets, in September, the Group's crude oil output reached 786 thousand tons, exceeding the monthly plan by 25.2%, the accumulated output in the first 9 months reached 7.43 million tons, exceeding the 9-month plan by 20.7%; electricity output in September reached 1.65 billion kWh, the accumulated output in the first 9 months reached 20.88 billion kWh, up 18.4% over the same period in 2023. Urea and gasoline production output (excluding NSRP) in September reached 141 thousand tons and 626.8 thousand tons, respectively; the total output in the first 9 months reached 1.39 million tons and 4.9 million tons. These two sectors are expected to exceed the annual plan.

Petrovietnam also saved VND 2,117 billion in waste prevention in the past 9 months, reaching 94% of the 2024 reduction plan. Of which, savings from raw materials, management costs, sales, finance... reached VND 1,782 billion, equal to 96% of the yearly plan; savings from investment management, optimizing exploitation operations, and purchasing equipment reached VND 334.8 billion, equal to 83% of the yearly plan.

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The first LNG station in the North is put into use in Bac Ninh

Finishing in a Challenging Context

With the target set for the following year higher than the previous year, thanks to efforts in production and business, the total revenue of the whole group in the first 9 months of the year is estimated at 736.5 trillion VND, completing 100% of the yearly plan, reaching the target 3 months ahead of schedule, up 12% over the same period in 2023; the total State budget contribution of the whole group is estimated at 115.2 trillion VND, exceeding 23% of the yearly plan, reaching the target 4 months ahead of schedule, up 9% over the same period in 2023.

Looking back at the production and business results of the past 9 months, Petrovietnam has fully completed 6/6 financial targets for the whole year 2024 according to the plan assigned by the State Capital Management Committee at Enterprises and the Board of Members (BOD), reaching the target 3-5 months ahead of schedule. Of which, 5/6 growth targets are from 9-31%: total revenue of the group increased by 12%; payment to the State budget increased by 9%; consolidated revenue increased by 14%.

In addition to production and business activities, Petrovietnam also devotes a lot of resources to social security activities with a total value of 480 billion VND in the first 9 months of 2024. In particular, Petrovietnam has coordinated with the People's Committee of Lao Cai province to implement the Kho Vang village reconstruction project (Coc Lau commune, Bac Ha district) and will be completed in 2024 so that people can soon have a new place to live and stabilize their lives.

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The maintenance of Unit 2 of Vung Ang 1 Thermal Power Plant is guaranteed to be effective and safe.

Efforts to find a solution to the finish line

Although the two major targets have been completed, Petrovietnam believes that the market context is facing many challenges and is on the rise, negatively impacting production output and business targets in all areas of the entire group. Therefore, it is necessary to find solutions to overcome difficulties and prepare for growth momentum in 2025.

With that spirit, many solutions to adapt to difficult market developments have been deployed by Petrovietnam's member units.

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Mr. Le Ngoc Son, General Director of Petrovietnam

Mr. Le Ngoc Son, General Director of Petrovietnam, acknowledged that in the first 9 months of 2024, although the legal targets of the State Capital Management Committee at Enterprises and the Board of Directors were well implemented, with many financial targets increasing compared to the same period, in the challenging context, outstanding difficulties have emerged, requiring the determination of the entire group to complete the set goals for the whole year 2024 and prepare for development momentum for 2025. Units are highly focused on completing production and business plans, minimizing non-essential activities. At the same time, units are preparing early for the 2025 plan with expected implementation scenarios, ensuring enough motivation and aspirations for the coming year.

From that orientation, the General Director of Petrovietnam suggested that it is necessary to continue to maintain the management and control work, maintain the set plan, and steadfastly not retreat; focus on reviewing recommendations and removing difficulties for units related to production, business and investment; strengthen decentralization and delegation of authority to support and increase the initiative of units; effectively control costs, especially those with large costs, minimize damage due to market impacts and flexibly balance inventories. Units must ensure environmental safety and not let even the smallest incident occur.

Forecasting work needs to be improved to take advantage of opportunities and identify difficulties early. Regarding growth drivers, units focus on developing science and technology and investing, preparing momentum for the following years.

In the field of new energy, Petrovietnam needs to form related apparatuses, prepare human resources and resources to develop renewable energy types, meeting the global energy transition trend.

Regarding the work of amending a series of laws, units proactively followed, reviewed, and contributed opinions to the drafts and determined that this was the basis and premise for successfully completing the 2025 plan and long-term vision.

Ngoc Minh