Offshore oil field Bach Ho (White Tiger) of Vietnam. (Photo: VNA)
Hanoi (VNA) – The government’s goal
to extract an additional 1 million tonnes of crude oil by the year’s end to meet
its economic growth target is very challenging, according to Chairman of the
Vietnam Oil and Gas Association (VOGA) Ngo Thuong San.
At a meeting with state-run corporations to
seek stimulus for the national economic growth in early June, Deputy Prime
Minister Trinh Dinh Dung asked the Vietnam National Oil and Gas Group (PVN) to
add 1 million tonnes of crude oil to its projected output in order for the
country’s GDP to grow by 6.7 percent this year.
The goal is not easy to achieve as the
initiative came late so PVN might struggle to ensure the target and sustainable
mining, San warned. Moreover, it will be harder for the firm to fast-track
construction of facilities in new oil fields since the typhoon season started
last month, he added.
Large reserves like Bach Ho, Su Tu and Te Giac
have passed their peak while small ones don’t produce much. In addition, global
oil prices have crashed to below 50 USD per barrel, putting exploiters at risk
of incurring more losses if they increase production, the chairman explained.
The PetroVietnam Exploration Production
Corporation (PVEP), a member of PVN, said suspended investment in new oil
fields and oil rigs during the past few years due to falling oil prices has
affected its capacity to maintain and raise productivity.
The future for the oil and gas industry will
be tough, with major oil fields near shore about to be exhausted while
exploring new reserves offshore is costly, said Deputy Director the Vietnam
Institute of Economics Le Xuan Sang. The cost of production in Saudi Arabia and
Russia is only about 12 – 13 USD per barrel. For Vietnam, it is 40 USD, he said.
[Inflation projected to drop to below 3 percent in 2017]
VOGA Chairman Ngo Thuong San suggested the
PVN seek advice from experts in mining production and management to devise
effective solutions for the matter. He also urged the government and ministries
to provide the PVN with special mechanisms, for example, establishing a fund
for the firm to invest in high technology and equipment for exploration and
production activities.
PVEP stressed that the company needs support
from the government, Ministry of Trade and Industry and the PVN to apply for a
loan of 65 – 132.7 million USD to fulfill the goal.
If the oil price keeps hovering around 50
USD per barrel, the extra one tonne of crude oil will contribute to the growth
of 0.3 percent in GDP, San noted.
By June 28, the PVN had produced 7.89
million tonnes of crude oil, equivalent to 55.6 percent of its yearly target.
It has discovered a new reserve and put oil platform Tho Trang 3 into use from
May 7, 13 days ahead of schedule.-VNA