ANTD.VN - In the context of a volatile, rapidly evolving and complex market, from epidemics, economic crises, to geopolitical instability... proactively "managing fluctuations" has helped the Vietnam National Oil and Gas Group (Petrovietnam) not only stand firm, overcome difficulties but also take advantage of new opportunities to achieve the highest efficiency, continuously setting many records in production and business, continuing to make important contributions to the economy.
From crisis to stability and sustainable development
The period 2016-2019 marked the most difficult period in Petrovietnam's history when the Group fell into a comprehensive crisis. The crisis stemmed from internal difficulties, loss of confidence and unstable market conditions, causing continuous declines in production output. Many projects, especially power projects, fell into a deadlock, and member units faced continuous losses, seemingly with no way out. To overcome the crisis and face new challenges, Petrovietnam has synchronously and drastically implemented a series of solutions since 2020 to turn "danger" into "opportunity." In particular, the "Management of fluctuations" strategy stands out as the role that helps the Group not only overcome difficulties spectacularly but also achieve impressive results, becoming the foundation for the Group's recovery and sustainable development.
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Petrovietnam Chairman of the Board of Directors Le Manh Hung reported to Prime Minister Pham Minh Chinh on the Group's CO2 emission reduction strategy. |
“Volatility management” is a new management method that Petrovietnam has developed, aiming to effectively respond to all unpredictable situations. With the motto “ Volatility management - Optimizing value - Promoting consumption - Striving to overcome difficulties - Seizing opportunities - Safely reaching the finish line” , Petrovietnam has overcome the dual crisis of the COVID-19 pandemic and the sharp drop in crude oil prices in 2020 - an unprecedented challenge in history. Notably, with the efforts from the “Volatility management” strategy, Petrovietnam has been one of the few oil and gas corporations in the world to maintain profits, reaching nearly 20,000 billion VND in the most difficult period.
In 2021, in the context of the pandemic continuing to spread and the global economy struggling, Petrovietnam once again faced a difficult situation due to a sharp decrease in the consumption of petroleum, natural gas, and nitrogen products. However, from the lessons learned from effective response in 2020, the Group has set the motto for action in 2021 as " Managing fluctuations - Maximizing value - Expanding markets - Taking advantage of opportunities - Linking investments - Recovering growth ". These efforts have helped Petrovietnam achieve its goal of recovering growth and overcoming major storms, comprehensively completing its production and business plan.
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Petrovietnam Chairman of the Board of Directors Le Manh Hung inspected the construction area of PTSC's offshore wind power base. |
In 2022, Petrovietnam faced a series of geopolitical fluctuations, from conflicts to the consequences of the pandemic. But instead of being overwhelmed by pressure, the Group took advantage of the opportunities from changes in the energy market and put forward the motto "Managing fluctuations - Anticipating trends - Connecting resources - Promoting technology - Promoting investment - Sustainable development" . Thanks to careful preparation, Petrovietnam set many records in output and revenue, becoming one of the key units ensuring energy security for the country.
Entering 2023, the Vietnamese economy in general and the oil and gas industry in particular continue to face a series of difficulties. Crude oil prices have fallen sharply by 17-38%, along with major fluctuations in supply - demand and competitive pressure in the energy market. For Petrovietnam, this is not only a year of challenges but also an opportunity to affirm its strength from management innovation. With the motto of action " Managing fluctuations - Expanding scale - Accelerating digital transformation - Shifting models - Improving productivity - Regenerating business ", Petrovietnam has achieved outstanding results. The entire Group achieved record revenue, exceeding 11.6 trillion VND compared to the previous year's record, accounting for 9.2% of the country's GDP and contributing 9% to the total state budget revenue. This is a clear demonstration of the effectiveness of fluctuation management, while affirming Petrovietnam's leading position in national energy security.
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A corner of the large offshore wind power base manufacturing site at PTSC port. |
In terms of key production targets, Petrovietnam has exceeded the Government's plan by 2-33%, with many high growth targets compared to 2022 such as electricity increasing by 31%, petroleum production increasing by 7.3%, and petroleum trading increasing by 11.2%. Total savings of the entire Group in 2023 also reached VND 3,072 billion, exceeding the plan by 37%. Notably, Petrovietnam set a record in petroleum and granulated fertilizer production, and achieved the highest total revenue in the history of the oil and gas industry after 62 years of establishment.
In 2024, in the context of continued global economic instability, Petrovietnam persistently pursues the strategy of expanding scale and restructuring business infrastructure, promoting international activities to increase sustainable value. The motto set by Petrovietnam is "Managing fluctuations - Adding new driving forces - Renewing old driving forces - Creating new energy sources - Reaching new heights" . In addition to continuing to promote the results achieved in governance, the Group actively develops new products, conducts digital transformation and expands the market to create a foundation for long-term development. Thanks to efforts in production and business with the goal of setting the following year higher than the previous year, in the first 9 months of 2024, Petrovietnam's total revenue is estimated at 736,500 billion VND, completing 100% of the annual plan, reaching the target 3 months ahead of schedule, up 12% over the same period in 2023; The total State budget contribution of the Group is estimated at 115,200 billion VND; fully completing 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, reaching the target 3-5 months ahead of schedule. Of which, 5/6 growth targets are from 9-31%: the total revenue of the Group increases by 12%; the total State budget contribution of the Group increases by 9%; consolidated revenue increases by 14%.
Not only maintaining the growth momentum, stable development over the years, through "fluctuation management", with the attention, leadership and direction of the Party, the State, directly the Prime Minister, Petrovietnam has actively and resolutely promoted investment and development work, completely resolved the difficulties and problems of some key projects, such as "reviving" and putting into operation Thai Binh 2 Power Plant, Song Hau 1 Thermal Power Plant; inaugurating the 1 million ton/year LNG port warehouse Thi Vai; speeding up the progress of Nhon Trach 3 - 4 Thermal Power Plant projects, ... contributing significantly to stabilizing the macro economy, ensuring the country's energy security.
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Petrovietnam Chairman of the Board of Directors Le Manh Hung and the working delegation inspected the actual operation of Thi Vai LNG Terminal. |
Volatility Management - Petrovietnam's Successful Management Model
It can be said that “volatility management” is not only a strategy but has become a management culture at Petrovietnam. Thanks to this management method, the Group has continuously achieved positive production and business results year after year, effectively dealing with many unpredictable situations from the pandemic to the decline in oil prices. Volatility management has helped Petrovietnam proactively develop response scenarios, thereby always maintaining calmness and high adaptability to macro fluctuations.
The volatility management method also creates a culture of quick response, helping Petrovietnam to forecast and propose appropriate solutions for each situation, minimizing damage from negative fluctuations, while exploiting opportunities. This is an important factor helping the Group maintain its important role in stabilizing the macro-economy, national energy security and stabilizing Vietnam's petroleum market.
In the context of the oil and gas industry witnessing a rapid shift to green energy, Petrovietnam has also begun implementing offshore wind power projects and international cooperation to develop renewable energy. With the motto of “Managing fluctuations, Adding new driving forces, Renewing old driving forces, Creating new energy sources, Reaching new heights”, Petrovietnam is constantly striving to build a sustainable energy ecosystem, improve competitiveness and expand international markets.
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| LNG Thi Vai port warehouse. |
It is expected that in 2024, Petrovietnam will continue to maintain its growth target of 3.5-6%, while expanding diplomatic relations and business infrastructure to enhance international capacity. Lessons learned and successes from governance innovation will continue to be the driving force for the Group to overcome the challenges ahead and effectively exploit new opportunities from the energy transition trend.
The construction of offshore wind power projects, typically the cooperation with Sembcorp Utilities Ltd. to export electricity from renewable energy to Singapore, is one of the strategic steps to diversify Petrovietnam's energy supply structure. In addition, the Group is also promoting research and development of environmentally friendly chemical and petrochemical products, such as the production of PP Filler Masterbatch and Compound products from PP powder. These products not only help Petrovietnam increase added value in the supply chain but also affirm the Group's position in the international market.
In addition, Petrovietnam also aims to develop a digital platform to optimize management, improve production and business efficiency and enhance customer experience. The Group has completed the digitization of all documents and integrated the enterprise resource planning (ERP) system with data from smart factories, aiming to create a synchronous and efficient ecosystem. With this orientation, Petrovietnam aims to not only be a leading enterprise in the oil and gas sector, but also become an integrated, digital and environmentally friendly energy group.
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Petrovietnam leadership delegation surveyed the planned project investment area in Long Son. |
One of Petrovietnam's outstanding achievements in the process of governance innovation is also the building of a strong corporate culture, based on the core values of " Aspiration - Intelligence - Professionalism - Compassion" as the foundation. This system of values has permeated deeply into corporate life, creating motivation and solidarity for all officers and employees in the Group. In particular, Petrovietnam has also focused on brand development, to date the brand value has reached nearly 1.4 billion USD and has been rated BB+ by the world's leading credit rating organization Fitch Ratings for 5 consecutive years.
The combination of the “change management” strategy and sustainable corporate culture has created a solid foundation for Petrovietnam to continuously move forward. The Group is always steadfast in its mission of ensuring national energy security, actively contributing to economic and social stability, especially in difficult times. In the context of the global oil and gas industry being under pressure from the energy transition trend, Petrovietnam’s steadfastness and innovation continue to bring great confidence to the Party, the State and the people.
Six years of management innovation and development under the “change management” strategy have helped Petrovietnam achieve many great achievements. Valuable lessons learned from the crisis period, together with sustainable business and innovation records, are clear evidence of the Group’s correct vision and strategy. Not only is it the economic pillar of the country, Petrovietnam has also become a symbol of self-reliance, self-reliance and constant innovation in the Vietnamese energy industry.
On the road ahead, with strategic vision and high determination, Petrovietnam is committed to continuing to make every effort to develop stably, sustainably and reach out globally. The strategy of managing fluctuations not only helps Petrovietnam adapt to the changes of the world but also helps the Group to continuously grow, contributing more to national energy security and the prosperity of the country.
Dr. Le Manh Hung - Party Secretary, Chairman of the Board of Directors of Vietnam National Oil and Gas Group:
“Although we will face many difficulties and challenges, we will also open up new opportunities and chances; with the motto “Managing changes, Adding new motivation, Renewing old motivation, Creating new energy, Reaching new heights”, the Group’s leaders require units in the whole Group to focus on a number of groups of solutions, promoting cultural motivation in the spirit of inheriting the development momentum of the past years with the spirit of “One team - One goal”, recreating culture and enhancing the culture of growth, solidarity, compliance with the law, coordination between units…
At the same time, creating institutional motivation becomes the driving force for the Group's development. To do that, it is necessary to specify in each area of corporate governance according to the motto of renewing old motivation to shift the business model; continuing to exploit the motivation of expanding scale, improving productivity, efficiency, expanding international business markets based on bilateral and multilateral relations; investment management, investment portfolio of investment projects, optimizing all types of costs, and finally focusing on completing the restructuring project in sync with the Group's management model and system".
As of June 2024, Petrovietnam has completed 10/12 targets according to the 5-year plan 2021-2025, especially 2 very important targets: profit and budget payment. It is estimated that by the end of 2024, Petrovietnam will exceed the 5-year plan in terms of total revenue. Thus, after 3 years (2021-2024), Petrovietnam has fully completed the financial targets according to the 5-year plan 2021-2025.
Source: https://www.anninhthudo.vn/petrovietnam-vuon-len-manh-me-nho-quan-tri-bien-dong-post593706.antd
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