Vietnam Oil and Gas Group has closed a busy 2018, a year spent in the spirit of renewal – with radical restructuring and improvements from top to bottom. The state-owned oil and gas giant is now entering a new year with the determination to double down on its commitments and transform itself to be competitive, environmentally-friendly, and tech-savvy.
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PetroVietnam on course for sustainable Development |
On its journey to become a leading state-owned economic group, PetroVietnam has been checking out its targets to improve its business achievements. According to CEO of PetroVietnam Nguyen Vu Truong Son, the establishment of the PetroVietnam has contributed significantly to the socio-economic development of the country, helping Vietnam’s international integration efforts.
At the latest meeting to review the group’s restructuring plan, Son said that the group’s progress has been good and the lessons learnt will not be forgotten in the coming stages.
According to its restructuring plan, from October 1, 2018, PetroVietnam’s operation structure was reduced by 48 per cent, to 16 departments and divisions. In addition, department leaders were also re-assigned to align with real demands. There has been a radical re-arrangement of positions to encourage the efficiency of human resources. More importantly, according to Son, all of these activities were done in the most transparent and democratic manner with the support of employees from the central to the grassroots levels.
In the time to come, the group and its affiliates and subsidiaries will continue restructuring its system accordingly to the PetroVietnam Party Committee’s Resolution No.170-NQ/DU dated March 28, 2018 to review all processes and make operations more efficient.
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PetroVietnam’s five outstanding achievements in 2018 - PetroVietnam has basically completed its strategy to reduce the number of departments and divisions with similar tasks and issued the Petroleum Culture Manual and the Code of Professional Ethics for its leaders and managers; - Exceeding production and business targets, especially those pertaining to increasing PetroVietnam’s reserves, oil and gas output, and financial indicators. Many member units have completed their yearly plans sooner than expected; - Successful equitisation and transformation of PetroVietnam Power Corporation (PVPower), PetroVietnam Oil Corporation (PVOil), and Binh Son Refining and Petrochemical Company (BSR) into joint stock companies; - Officially putting into commercial operation Nghi Son Petrochemical Complex – the first ever petrochemical complex of Vietnam with investment capital of $9billion and capacity of 10 million tonnes of crude oil per year; - Resuming several delayed projects, such as Dinh Vu Fibre Factory, Dung Quat Bio Ethanol Factory, and Binh Phuoc Biofuel Plant. |
Sustainability in targets
In its development strategy, PetroVietnam targets key solutions to ensure sustainable development in the incoming decades.
Son said that the group will strictly follow these key solutions until 2025.
The most substantial changes, according to him, came in governance, whereby the group placed focus on improving its operating policies to increase the competitiveness of its business activities. Especially policies pertaining to international investment and oil and gas activities were streamlined.
The group will continue restructuring to ensure that it operates under market mechanisms and is aligned with the development and integration trends of the world.
Especially, the group will focus on its core business in the petroleum industry, pushing the process of re-arranging and equitising enterprises in which the state does not need to hold 100 per cent or the majority of the stakes. It will also increase research and development (R&D) activities.
It will also set up and implement a modern management and governance system aligning with international standards and practices.
Administrative improvements have been regularly implemented to improve efficiency. In addition, inspections will also be more frequent at both the parent company and affiliates.
Regarding finances, the group will also diversify capital sources. In particular, 32 per cent of its annual profit, 100 per cent of its profit from Vietsovpetro – a joint venture between Vietnam and Russia – and 100 per cent of the proceeds from the equitisation of subsidiaries will be used for re-investment.
According to Son, the group must revise its development strategies and draw up a suitable equitisation schedule in line with industry demands and the current economic context. Attracting more foreign investment and non-state capital is another target.
Some solutions to diversify its capital sources by improving access to normal and preferential credit for business activities and export. In addition, the group will also strengthen win-win relations with banks, while expanding relations with international and regional banks, as well as securing more guarantees from the Vietnamese government for key oil and gas projects.
“Diversifying capital sources, improving administrative procedures to increase efficiency, and accelerating key oil and gas projects are our key missions in the coming time,” said Son.
To expand the market, the group is actively finding opportunities to help its affiliates and subsidiaries to improve their competitiveness and business efficiency, while encouraging them to expand cooperation and joint ventures with foreign investors to expand their business abroad.
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Key results of 2018 - PetroVietnam completed its annual plan with a production output of 23.98 million tonnes of oil equivalent, exceeding the annual plan by 1.14 million tonnes. - PetroVietnam has produced 9.60 billion cubic metres of gas, surpassing the plan by 4.3 per cent. - Along with oil and gas, the group also enjoyed a high output of other products, including more than 19 billion kWh of electricity and 1.63 million tonnes of nitrogenous fertiliser. - In 2018, the group’s total revenue hit VND626.8 trillion ($27.3 billion), surpassing the yearly plan by 18 per cent. It contributed VND121.3 trillion ($5.2 billion) to the state budget, 64.3 per cent higher than its target. - PetroVietnam appraised 15 wells and exploited 17 others, locating two new fields at Tho Tinh Nam in Block 05-3/11, and Meo Trang Dong in block 09-1. |
Innovative development
In its development strategy, PetroVietnam also aims to make information and forecasting more transparent to craft more effective business plans. Another facet of this strategy is the creation of a complete chain from supply through manufacturing to consumption. The group will also promote PetroVietnam and its affiliates’ brand names and build PetroVietnam into a national brand name.
In education and human resources development, the group aims to improve the skills of its staff, especially experts in the oil and gas industry. The group has been actively co-operating and establishing joining ventures with foreign companies to improve its human resources.
Regarding development in the oil and gas industry, scientific and technologic solutions will play a key role. The group has been boosting R&D as well as the application and transfer of technology to achieve sustainable development, protect natural resources, and improve competitiveness.
“Innovation in mindset, improving training, increasing the tasks of high-skill workers, setting incentives for workers, and increasing investment in science and technology will be our tools to achieve sustainable development,” said Son.
In addition, all affiliates and subsidiaries will raise R&D funds to apply advanced technologies from their industry.
Last but not least, the group has been strictly obeying all Vietnamese environmental regulations, meeting all commitments to the global community in all of its projects and activities. In the coming time the group will build out forecasting and risk management systems and improve its capacity to cope with emergencies.
Especially, the processing and management systems in oil and gas activities will be completed featuring advanced and environmentally-friendly technologies with the highest safety standards. The group will also set up a database for environmental protection and implement its strategy on energy safety and clean energy usage.
Son said that the challenges and difficulties of PetroVietnam in the coming time are hard to predict, but will likely grow in complexity as the group evolves. However, PetroVietnam has overcome great ordeals in its history and remains optimistic.
“Even as challenges change with each stage of development, with due attention from the Party and the government, the group’s workers and staff will definitely overcome whatever comes our way,” Son stressed.
By Bich Ngoc
