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OIL & GAS COMPANY IN VIETNAM

In 2020, Vietnam’s oil and gas industry suffered from a “double crisis”, which are the COVID-19 pandemic and the deep drop in oil prices.

Oil and gas enterprises had to focus on responding to the epidemic which led to low and shrinking market demand, and to cope with the unprecedented decline in crude oil prices in the history.

Oil price witnessed a 20-year record low, especially for the first time in the history of world oil and gas, on April 20, 2020, the price of WTI oil was negative 37.6 USD/barrel.

According to data from financial statement of companies in the industry, in 2020, only four out of eleven domestic oil and gas enterprises experience growth in revenue, including Petrovietnam Drilling and Well Service Corporation (PVD), and PetroVietnam Technical Services Corporation (PVS), PetroVietnam Coating Joint Stock Company (PVB), and PTSC Offshore Services Joint Stock Company (POS).

PVD, POS and PVB all saw profit growth in 2020. Particularly, POS recorded both revenue and profit increasing by triple digits.

As for PVD, they company has experienced a difficult time over the past 4 years as their annual profit has been below 200 billion USD. Previously, in the period of 2011 – 2015, PVD’s profit was over trillion VND.

In 2020, PVD’s profit increased by 5% to nearly 8 million USD in the context of the COVID-19 epidemic and the sharp drop in oil prices which caused many businesses in the same industry to struggle.

For PVS, although its revenue increased by 18% to 873.7 million USD in 2020, the company’s profit after tax decreased by 26% to 32.4 million USD.

PVS leaders said that due to the dual impact of the COVID-19 epidemic and the drop in oil prices, PVS’s service activities were delayed, service demand decreased and projects had to be put off as required by customer.

Sharing the same difficulties with PVS, Vietnam LPG Trading Joint Stock Company (LPG) transport and PetroVietnam Transportation Corporation (PVT), which holds 30% of the oil transportation market share of the country, had to reduce prices of all petroleum products. This led to a decrease of 4% and 7% in annual revenue and profit, respectively.

The double impact also made the gas giant, PetroVietnam Gas Joint Stock Corporation (GAS), shaken.

In 2020, net revenue and profit after tax of PV GAS decreased by 14% and 34% compared to 2019, reaching 2.8 billion USD and 349.3 million USD, respectively. The company’s profit in 2020 also recorded the lowest level in the past 4 years.

Compared to the plan, PV GAS still achieved 97% of the revenue target and exceeded 19% of the year profit plan.

In the group of petroleum production, processing and trading, PetroVietnam Oil (OIL) and Binh Son Refining and Petrochemical Company Limited (BSR) suffered from record losses in 2020, while Viet Nam National Petroleum Group (PLX) recovered after a big loss in the first quarter of 2020.

The profit of this group comes from the difference between the selling price of gasoline and the price of crude oil. The company always maintains a high inventory of crude oil, so a decline in price of crude oil would lead to a decrease in selling price while production costs were still high.

Besides, the supply of finished petroleum products was higher than the demand in the context of the COVID-19 epidemic, which negatively affected business results. Therefore, in 2020, BSR lost 125.5 million USD while in 2019 its profit was 126.6 million USD.

Source: vietnambiz, finashark

Compiled by VietnamCredit