PetroVietnam projects falling Q2 oil output as low prices weigh on revenue

By Ho Binh Minh   March 23, 2017 | 02:47 pm GMT+7

Crude oil output from April-June is expected to fall 10 percent from the first quarter.

State oil and gas group PetroVietnam, the country's largest enterprise, has projected lower revenue for the three months ending June in comparison with the first quarter, citing plans to pump less crude oil and no major improvements in global oil prices.

The Hanoi-based group projected revenue in the April-June period at VND102.5 trillion ($4.5 billion), down 14 percent from its estimate for the first quarter, while it envisages crude oil to stay at $50 per barrel in the second quarter, VietnamPlus cited a PetroVietnam report as saying.

The group did not immediately comment when contacted by VnExpress International

PetroVietnam will pump 6.05 million tons of oil equivalent in the April-June period, including 3.55 million tons of crude oil, or 286,000 barrels per day, and 2.5 billion cubic meters of natural gas, the VietnamPlus report said.

In the first quarter ending March, the group estimated crude oil output at 3.93 million tons and natural gas at 2.52 billion cubic meters.

First-quarter gross profit is estimated at VND5.1 trillion, 18 percent above the group's quarterly target and making up 30 percent of the annual target for 2017, the report said.

The group's earnings in the first quarter have received support from global oil prices.

Vietnam's crude oil exports between January 1 and March 15 brought in $527 million, a jump of 51 percent from the same period last year, even though shipment volume eased 8 percent in the same period to 1.23 million tons, Vietnam Customs data showed.

Global benchmark Brent crude stood at $51.03 a barrel Thursday, after briefly dipping below $50 a barrel the previous session for the first time since November.   

The latest oil prices are slightly above PetroVietnam's projections, but they have dropped more than 10 percent since the end of 2016.

Last year, Brent jumped 52 percent to $56.82 per barrel, while U.S. benchmark West Texas Intermediate crude rose around 45 percent to $53.72 per barrel, the largest annual gains since 2009. 

Global oil prices have slumped since the summer of 2014 from above $100 a barrel due to a huge inventory in the United States.

Oil traders said that prices remained under pressure, largely due to a bloated U.S. market and doubts that an effort led by the Organization of the Petroleum Exporting Countries (OPEC) to cut output were having the desired effect of reining in a global fuel supply overhang, Reuters reported.

PetroVietnam has plans to produce 14.2 million tons of crude oil this year, down nearly 18 percent from 2016, while its natural gas output could drop 9 percent to 9.61 billion cubic meters.

Vietsovpetro, a Vietnam-Russia oil and gas venture in which PetroVietnam owns a 51 percent stake, has envisaged its oil output this year nearly flat at 5 million tons, after hitting 5.04 million tons in 2016.

PetroVietnam was Vietnam's biggest enterprise in 2016, based on revenue, assets and profit, among other criteria, according to Vietnam Report, a Vietnamese business rating firm.

Last year, the group pumped 17.23 million tons of crude oil, including around 2 million tons from overseas projects.