Journey of development

Originated from President Ho Chi Minh's genius strategic vision for the future development of the Oil and Gas Industry, the Party and the State of Vietnam paid special attention to this prospective industry. On November 27, 1961, the Petroleum Exploration Crew (Petroleum Crew 36 or simply Crew 36) affiliated to the General Department of Geology was established, marking the birth of the first petroleum entity in Vietnam. In response to the aspirations of oil and gas workers, the Prime Minister decided to adopt November 27 as the Traditional Day of the Vietnam Oil and Gas Industry.

Over the past six decades, Petrovietnam has experienced different periods with different operating models: General Department of Vietnam Oil and Gas, the Vietnam National Oil and Gas Corporation, and now Vietnam National Oil and Gas Group. Petrovietnam has built a complete and synchronous system of oil and gas facilities from oil and gas prospecting and exploration, production and processing, gas industry, electricity and oil and gas services. Starting without any oil and gas reserves, the group has so far explored more than 1.4 billion tons of oil equivalents in addition to the potential discovery of extra 1.6-2.8 billion tons of oil equivalents. So far, the group has produced 414.3 million tons of oil and 168.6 billion cubic meters of gas. Discovered and potential reserves will be capable of sustainably balancing production and ensuring the country's energy security in the coming decades.

Petrovietnam has completed the operating political system as a business group, successfully conducted corporate restructuring, with a focus placed on core areas. The group has built a strong workforce of nearly 60,000 highly qualified people, capable of mastering domestic and overseas oil and gas.

Petrovietnam has always taken the lead in international cooperation and integration. In addition to attracting investment from international oil and gas firms to develop oil and gas activities in the country, the group has actively sought and expanded overseas investment and participated in protecting national sovereignty and territorial waters. The group is always aware and highly responsible for sharing with the community. The firm has donated VND500 billion to social security a year on average. (In 2021, together with the assistance for COVID-19 pandemic prevention and control, the donation amounts to more than VND1,000 billion).

The group has become a top taxpayer and the largest contributor to socioeconomic development. Currently, its consolidated assets are approximately US$41 billion and its equity is approximately US$21 billion.

Only from 1986 to the end of 2020, its total revenue reached nearly US$400 billion and paid over US$110 billion to the State Budget. Sometimes, its tax payment accounted for nearly 30% of the country's GDP. The group has become the key player in the formation of centralized industrial parks in Ba Ria - Vung Tau, Hiep Phuoc - Dong Nai, Ca Mau, Dung Quat - Quang Ngai, Da Nang, Vung Ang - Ha Tinh and Nghi Son - Thanh Hoa.

Spectacularly overcoming “double crisis”

Since the second half of 2019, especially in 2020 and 2021, Vietnam and the world have experienced an extremely difficult period caused by the raging COVID-19 pandemic. Vietnam's Oil and Gas Industry has gone through the most difficult period in history due to the "double impact" of the pandemic and the unusually volatile oil price, which has severely affected all its five main business sectors.

Against this backdrop, in the light of the action course set for 2020: "Managing volatility - optimizing value - promoting consumption - striving to overcome difficulty - capturing opportunity - Safe and sound beating the targets" and for 2021: “Managing volatility - maximizing value - expanding market - capturing opportunity - Linking investment - Accelerating recovery and growth”, the group has drastically and effectively carried out a consistent solution package with five groups of specific solutions: (i) Governance; (ii) Finance; (iii) Investment; (iv) Market; (v) and Policy. At the same time, the group has effectively launched four groups of key tasks and solutions: (i) Ensuring health and safety for employees; (ii) Ensuring safe and continuous production and business; (iii) Ensuring circulation of raw materials, production materials and products in order to maintain and stabilize the market; and (iv) Ensuring the progress of investment projects.

In 2019, the group’s industrial production value (based on the fixed prices in 2010) reached VND519.8 trillion, 4.3% higher than the full-year plan, 6.3% higher than in 2018; its total revenue amount at VND736.2 trillion, roughly 20% (VND123.9 trillion) higher than the yearly plan and 17% higher than a year earlier; and its tax payment climbed to VND108 trillion, about 23% (VND20.5 trillion) higher than the plan. In 2020, while many major oil and gas companies in the world slid into trouble, stagnated and lost in business, even went bankrupt, and laid off employees, Petrovietnam was one of a few to make a profit. Specifically, the group completed the yearly plan of increasing oil and gas reserves by 15 million tons of oil equivalents six months ahead of schedule (the plan: 10-15 million tons of oil equivalent). The group made revenue of VND566 trillion; paid taxes of VND83 trillion and earned a profit before tax of VND19.9 trillion. Since early 2021, given the output decline in existing oil and gas fields after a long production amid policy-hindered investment and development of new fields, it is hugely challenging for Petrovietnam to maintain and complete its output plans. However, the group has focused its efforts on applying scientific, technical and technological solutions, and adopting many solutions to improve oil recovery. As a result, October crude oil output exceeded the monthly plan by 6.6%, bringing its 10-month output to 9.09 million tons, 12.4% higher than the 10-month plan. Petrovietnam therefore importantly paid VND75.4 trillion to the State Budget in the first 10 months of the year, 21% above the full-year plan and 23% higher than a year-ago period.

As of early November 2021, Petrovietnam donated nearly VND1,000 billion to the fight against COVID-19, including more than VND554 billion sent to the COVID-19 Vaccine Fund. The group provided central and local agencies with valuable medical equipment and supplies such as ventilators and ambulances to prevent and control the plague. Notably, on November 19, 2021, Petrovietnam completed the target of 7.99 million tons of domestically exploited oil, 42 days ahead of schedule, and 1.67 million tons of overseas exploited oil. On November 22, 2021, Petrovietnam fulfilled the full-year oil production plan, both at home and abroad, of 9.72 million tons, 38 days ahead of time in 2021. While many large corporations are confronting hardships and losses caused by the severe impact of the COVID-19 pandemic, Petrovietnam has still made important contributions to the country, demonstrating the devotion of nearly 60,000 employees, their affection and responsibility to the country in this difficult period.

Toward the future

Looking back on history, oil and gas workers, from generation to generation, have always firmly overcome all challenges and difficulties in the way to make the current robust status of the Oil and Gas Industry. That strength is built from the combination of traditions and culture of the group. Petrovietnam's leaders remember that the best way to show gratitude to predecessors is to inherit and promote the tradition and culture of Oil and Gas Industry, follow the principle of "Unity - Discipline - Creativity - Efficiency", constantly promote and preserve the core values of "Aspiration - Intelligence - Professionalism - Dignity", keep the fire of enthusiasm in their heart, and fulfill the responsibility of finding oil and developing the energy value chain to enrich the country.

At present, to pursue sustainable development, the group has focused on seven groups of tasks and solutions: (i) Reviewing the strategy and strengthening the governance system; (ii) managing human resources and developing the workforce; (ii) managing finance and investment; (iv) strengthening business administration and market development; (v) enhancing science and technology research and application in the governance ecosystem; (vi) managing and controlling risks; and (vii) building corporate culture.

During this time, Petrovietnam must keep up with global economic, technical and technological development trends and national development strategies, catch up with inevitable digital transformation and energy transformation trends towards sustainable development, actively adapt to free trade agreements and new economic agreements; enhance its forecasting capabilities and risk management; effectively respond to fluctuations and uncertainties; face with global economic recession and crisis caused by the worldwide complicated development of COVID-19 pandemic; and respond to threats to peace, stability, freedom, security and safety in the East Sea.

To successfully carry out the Vietnam Oil and Gas Development Strategy, ensure energy security and protect the country's sovereignty, it is increasingly important to perfect institutions for the continued development of the Oil and Gas Industry in the new context. Oil and gas workers always hope for consistent policies and laws on oil and gas of the Party and the State and policies and mechanisms in line with international practices for Petrovietnam to develop sustainably. Thus, it is necessary to increase autonomy and self-responsibility in production and business, especially in core oil and gas exploration and production. The policy on foreign investment into Vietnam needs a change towards more stability, openness and encouragement, especially in the current context, to protect national sovereignty in the East Sea on the one hand and attract capital and advanced technology from the world on the other.

Being proud of 60 years dedicated to the national development, Petrovietnam is always looking to the future with its ultimate devotion and unanimously carrying out the noble mission: “Optimizing oil and gas energy sources, sustainably developing new natural energy resources, contributing to national construction and defense”; steadfastly moving towards the goal: “Building a strong and comprehensive Party apparatus, enabling Petrovietnam to play a pivotal, key and leading role, empowered by strong financial potential, advanced technology, high competitiveness to successfully achieve the Vietnam Oil and Gas Development Strategy; focusing on developing main business fields - oil and gas prospecting, exploration and production, gas industry, oil and gas processing, electricity, renewable energy,  and high-quality oil and gas services; preserving and developing capital sources; aligning business with environmental protection, national security and defense, and national water sovereignty protection.

By Dr. Le Manh Hung Member of National Assembly, General Director of Petrovietnam