According to FiinTrade, five corporations with largest capitalization value in the oil and gas industry have reported huge profits for the first nine months of the year. Binh Son Refinery, for example, has reported post-tax profit of VND3.235 trillion in the third quarter and VND6.186 trillion after first three quarters.

Meanwhile, Petrolimex has reported profit of VND2.288 trillion for the first nine months. PV Oil (OIL) has completed 144 percent of the yearly business plan, PetroVietnam Trade and Service (PVS) completed 108.5 percent of the plan, while PVDrilling (PVD) has exceeded the year's profit plan by 200 percent.

In the third quarter alone, Binh Son made a post-tax profit which was seven times higher than that of the same period last year. The figure was 3.8 times for Petrolimex. 

Meanwhile, PVDrilling reported profit of VND133 billion after taking a loss of VND52 billion the same period last year. PVOil also reported satisfactory business result with the profit of VND235 billion after it took a loss of VND373 billion the same period last year.

The strong rise of oil and gas companies is attributed to the increase in crude oil prices.

A senior executive of Binh Son confirmed that the crude oil price increases have helped the company’s business performance. The oil price surged from $80 per barrel in July to $94 in September. The gap between the finished product and crude oil prices was also higher than that of the same period last year.

The good business results have improved the financial situation of companies in the industry.

As of the end of September, Binh Son had VND36.47 trillion, or $1.5 billion worth of bank deposits, or 45 percent higher than early this year. The cash allowed the refinery to earn nearly VND1 trillion worth of deposit interests.

Meanwhile, big petroleum traders, including PVOil and Petrolimex have regained their strength after big losses of hundreds of billions of dong the same period last year when oil prices fell in the third quarter 2022. The market conditions at that moment were  unfavorable, with big inventories, high transport costs and exchange rate fluctuations.

In addition to oil price increases, oil and gas companies have benefits from the progress of the B Block-O Mon super-project.

On October 30, PetroVietnam, the national oil and gas corporation, organized a signing ceremony for the gas-electricity project. The contractors PTSC (PVS)-McDermott were granted the EPICI 1 package. The total value of the package, including the central operating platform, living quarters and several wellhead platforms, is estimated at $1.1 billion.

The B Block-O Mon super project is a large electricity-gas production chain, with a total investment of tens of billions of dollars, expected to supply 5.06 billion cubic meters of natural gas per annum for 23 years. The first gas stream can be exploited in 2026 and supplied to a complex of four gas-fired power plants (O Mon 1, 2, 3, 4) with a total capacity of 3.8 GW.

The project comprises an upstream component project (gas exploitation and processing at Block B), midstream (gas pipeline) and downstream (four power plants).

The major investors of the project include PetroVietnam (upstream and O Mon 3 and 4 power plants just transferred from EVN), PVEP, MOECO, PTTEP (upstream), PV Gas (midstream), Marubeni (O Mon 2 power plant), and Genco 2 Electricity Group (O Mon 1 power plant).

According to SSI Research, upstream companies such as PVS, PVD and midstream such as GAS and PVB are the biggest beneficiaries.

PVS is the first beneficiary as it starts to build a package from mid-2024, which will push up both revenue and profits from EPC (designing, technology providing, construction…etc).

PVDrilling (PVD) may also have the opportunity to participate in drilling activities during the construction and development period of the project in the long term (23 years from the first gas flow). 

Meanwhile, PVB may undertake pipeline coating contracts, while GAS is likely to benefit when the project starts supplying gas to power plants.

Tuan Nguyen