VietNamNet Bridge - PetroVietnam has been asked to exploit more oil to obtain the targeted growth rate of 6.7 per cent assigned by the government.

In early June, Deputy PM Trinh Dinh Dung had a meeting with state-owned large economic groups to discuss solutions to stimulate economic growth after low GDP growth rate of 5.1 percent in Q1 & Q2, attributed to a decline in the mining industry. 

At the meeting, Dung asked the national oil & gas group PetroVietnam to exploit one million more tons of crude oil and 1 billion cubic meters of gas than initially planned to help obtain the yearly GDP growth rate of 6.7 percent.

Vinacomin, the national coal miner, was also asked to build up the coal exploitation plan so as to ensure enough coal for domestic thermal power plants.

Chair of the Vietnam Petroleum Association (VPA) Ngo Thuong San commented that the task was difficult as PetroVietnam would have only six months to do so.  

PetroVietnam has been asked to exploit more oil to obtain the targeted growth rate of 6.7 per cent assigned by the government.

Meanwhile, from June onwards, the south will enter the choppy sea season with northeast monsoon, which makes it difficult to step up construction of work on the sea and put new oil fields into exploitation.

San said that the peak period of large oil fields such as White Tiger, Lion and Rhino is over and they are on the decline. 

PetroVietnam will have to thoroughly consider economic and technical solutions to increase the output. 

The small oil fields will not provide significant output. When the oil price is at low level, joint ventures will not be enthusiastic in increasing the exploitation output, because the more they produce, the bigger losses they would incur.

Moreover, the oil and gas industry is undergoing restructuring while it is facing big financial difficulties due to the prolonged oil price decreases. 

Therefore, it would find it difficult to ensure capital flow to put new oil fields into exploitation.

Sharing the same view with San, Le Xuan Sang, deputy head of the Vietnam Economics Institute, said it was necessary to consider the exploitation cost. If the exploitation brings losses, it is necessary to reconsider the exploitation plan and not try to exploit more for GDP growth. 

Because of the difficulties, energy experts said the state and ministries need to create a special mechanism for PetroVietnam to help it arrange capital to fulfill the task.

With the oil price of $50 per barrel, 1 million tons of oil at present would be worth $350 million, making up 0.3 percent of GDP. Meanwhile, 1 billion cubic meters of gas would make up 0.2 percent of GDP.

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