An oil rig in Bach Ho (White Tiger) oil field. Vietnam's reserves rank third in Asia and 28th in the world with total volume of 4.4 billion barrels. (Photo: pvn.vn)Hanoi (VNS/VNA) – Vietnam’s oil industry needs to overcomefour big challenges to maintain its position as a leading economic sector.
Industryexperts have pointed out the sector’s obstacles, including rapid depletion of some oilfields; fierce competition in both international and domestic markets;geopolitical instability, especially territorial disputes in the East Sea; andinternal problems of the petroleum industry.
Amongthese challenges, the rapid exhaustion of its main oil discoveries is puttingthe industry under great pressure.
Withthe oil reserve volume of 4.4 billion barrels, Vietnam’s reserves rank third in Asiaand 28th in the world. However, extensive exploitation in some fields hasaccelerated depletion. In addition, the increase in reserves, which ispredicted to be low from now to 2025, will likely decrease oil production by 10percent - equivalent to more than two million tonnes each year.
Accordingto Nguyen Vu Truong Son, a member of PetroVietnam’s board, if the imbalancebetween exploration and production increases, the production output willdecrease by two thirds.
Thecurrent big obstacles for the searching, exploration and exploitation ofPetroVietnam are the lack of capital and incomplete mechanism and policieswhich impede its investment and fail to attract foreign investment, Son told arecent meeting on oil and gas industry.
PetroVietnamestimates the total production for 2018 to reach 14 million tonnes, exceedingits yearly target of 13.23 million tonnes. However, this number is still lowerthan 2017’s output of 15.52 million tonnes.
Petroleumis a special and priority economic sector to the nation’s economic developmentas well as energy security.
Sincethe first flow of crude oil was tapped inJune 1986, the industry growth has promoted the whole national economicdevelopment, spilling over into the expansion of other essential economicsectors.
Theindustry has contributed 9-11 percent of the total State budget and 10-12 percentof Vietnam’s gross domestic product(GDP) annually.
However,the situation has changed rapidly both in the country and the rest of theworld. Besides fiercer competition, global oil prices have dropped sharply,making the world oil and gas industry struggle, including Vietnam. Many exploration andexploitation projects have to be postponed.
Thisdemands the industry to have a comprehensive development plan to maintain itsgrowth and contribution to the State.
Accordingto economist Tran Van, a member of the National Assembly (NA) Committee forFinance and Budget, the oil and gas industry needs to have a specific policyand mechanism which should concentrate resources to form and develop a numberof strong industries being capable of competing internationally.
SomeVietnamese oil and gas companies have won bidding in world projects butsometimes they have to “succumb” at home because of some outdated regulations,Van wrote on pvn.vn while noting the institutional improvement for thepetroleum industry was being carried out slowly.
Inaddition, policies and tools to protect the domestic industry in the context ofextensive globalisation were not thoroughly studied and introduced, he said.
NguyenDuc Kien, Vice Chairman of the NA Economic Committee, saidPetroVietnam must also innovate its corporate management to adapt to the rapiddevelopment in the world.
He said the NA Economic Committee would propose the Petroleum Law revision to the14th NA for consideration during the 2019-20 period.-VNS/VNA
Industryexperts have pointed out the sector’s obstacles, including rapid depletion of some oilfields; fierce competition in both international and domestic markets;geopolitical instability, especially territorial disputes in the East Sea; andinternal problems of the petroleum industry.
Amongthese challenges, the rapid exhaustion of its main oil discoveries is puttingthe industry under great pressure.
Withthe oil reserve volume of 4.4 billion barrels, Vietnam’s reserves rank third in Asiaand 28th in the world. However, extensive exploitation in some fields hasaccelerated depletion. In addition, the increase in reserves, which ispredicted to be low from now to 2025, will likely decrease oil production by 10percent - equivalent to more than two million tonnes each year.
Accordingto Nguyen Vu Truong Son, a member of PetroVietnam’s board, if the imbalancebetween exploration and production increases, the production output willdecrease by two thirds.
Thecurrent big obstacles for the searching, exploration and exploitation ofPetroVietnam are the lack of capital and incomplete mechanism and policieswhich impede its investment and fail to attract foreign investment, Son told arecent meeting on oil and gas industry.
PetroVietnamestimates the total production for 2018 to reach 14 million tonnes, exceedingits yearly target of 13.23 million tonnes. However, this number is still lowerthan 2017’s output of 15.52 million tonnes.
Petroleumis a special and priority economic sector to the nation’s economic developmentas well as energy security.
Sincethe first flow of crude oil was tapped inJune 1986, the industry growth has promoted the whole national economicdevelopment, spilling over into the expansion of other essential economicsectors.
Theindustry has contributed 9-11 percent of the total State budget and 10-12 percentof Vietnam’s gross domestic product(GDP) annually.
However,the situation has changed rapidly both in the country and the rest of theworld. Besides fiercer competition, global oil prices have dropped sharply,making the world oil and gas industry struggle, including Vietnam. Many exploration andexploitation projects have to be postponed.
Thisdemands the industry to have a comprehensive development plan to maintain itsgrowth and contribution to the State.
Accordingto economist Tran Van, a member of the National Assembly (NA) Committee forFinance and Budget, the oil and gas industry needs to have a specific policyand mechanism which should concentrate resources to form and develop a numberof strong industries being capable of competing internationally.
SomeVietnamese oil and gas companies have won bidding in world projects butsometimes they have to “succumb” at home because of some outdated regulations,Van wrote on pvn.vn while noting the institutional improvement for thepetroleum industry was being carried out slowly.
Inaddition, policies and tools to protect the domestic industry in the context ofextensive globalisation were not thoroughly studied and introduced, he said.
NguyenDuc Kien, Vice Chairman of the NA Economic Committee, saidPetroVietnam must also innovate its corporate management to adapt to the rapiddevelopment in the world.
He said the NA Economic Committee would propose the Petroleum Law revision to the14th NA for consideration during the 2019-20 period.-VNS/VNA
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