Vietnam’s top lawmaker questions plan to pump more oil to boost GDP

By Toan Dao   July 22, 2016 | 03:14 pm GMT+7
Vietnam’s top lawmaker questions plan to pump more oil to boost GDP
Part of Vietnam's flagship oilfield Bach Ho. Photo by Petrotimes

What's the point of producing more oil when global prices are so low?

Nguyen Hanh Phuc, chief of staff of the National Assembly, has expressed concerns over the government’s plan to produce more crude oil to raise gross domestic product growth (GDP) this year, the An Ninh Thu Do newspaper reported on July 21.

He made the comment after the national oil and gas group, PetroVietnam, earlier this month said it targets to produce an additional 1 million tons of crude oil to support efforts to achieve the GDP target of 6.7 percent in 2016. The new production target in 2016 has been raised by the government from 16.03 million tons to 17.03 million tons of crude oil.

“We should use other measures to deal with low GDP growth. It is a waste of money to pump more crude oil when prices are low,” Phuc told reporters on the sidelines of the new ongoing parliamentary session in Hanoi.

He added that Vietnam should not overproduce the limited natural resource, particularly amid falling crude oil prices in the international market.

This is the second consecutive year that the government has told the company to increase production to secure a greater contribution to the state budget. In July last year, the government directed PetroVietnam to produce an additional one million tons of crude oil to help achieve the targeted annual economic growth rate of 6.2 percent in 2015.

In a resolution released on July 7, the government said the country's annual GDP growth in the first half of 2016 was 5.52 percent, down from 6.32 percent during the same period last year. As part of the measures to help achieve GDP growth of 6.7 percent in 2016, the Ministry of Industry and Trade has been directed to adjust the country's production target for crude oil.

Vietnam’s domestic crude oil production reached its peak in 2004 with more than 20 million tons, but has gradually declined since then to about 14 million tons last year.

PetroVietnam’s average crude oil price from January-June stood at $40.5 a barrel, falling 33.4 percent from $60.5 in the first half of last year, according to the company.

Related news:

PetroVietnam’s contribution to state budget falls on low oil prices

PetroVietnam aims to produce more oil amid modest GDP growth

 
 
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