Petrovietnam slashes revenue projection as oil prices plummet

The company said in a recent statement that oil prices had fallen to below $30 per barrel against an expected price of $60 this year.

Brent crude fell 45 percent to $28.36 on Monday from earlier this month.

The price fall will cut Petrovietnam’s revenues by half to around $2.36 billion this year. Besides, with the falling prices, the company expects losses in some ongoing projects, it said.

Its CEO, Le Manh Hung, said at a meeting last week: "This is one of the most difficult times ever for the company."

Oil inventories have been rising fast at Vietnam’s refineries as buyers postponed orders due to low demand. Dung Quat Refinery in the central Quang Ngai Province said it could run out of storage capacity this month.

Binh Son Refining and Petrochemical Jsc, a subsidiary of Petrovietnam and the operator of the refinery, reported a loss of VND313 billion ($13.4 million) last month due to dwindling demand.

Nguyen Viet Son, director of the Ministry of Industry and Trade’s oil, gas and coal department, said: "Oil production and sales have been hit by plummeting crude oil prices and demand falling 30 percent due to Covid-19."

Petrovietnam is considering stockpiling crude oil and selling it when demand recovers.

Economist Le Dang Doanh said in the worst case scenario the company might have to consider suspending production to cut losses.

Son said the Ministry of Finance should consider providing income and value-added tax breaks to energy businesses and defer tax payment.