Crude oil exports to fuel growth for 2018

11:32 | 14/04/2018 Industry

A strong recovery in the price of crude oil on the global market is expected to serve as a driver for Vietnam’s high economic growth this year.

The oil and gas industry will continue boosting the exploration and exploitation of a number of oil fields - Illustrative image

The Ministry of Planning and Investment (MPI) last week issued a draft scenario on national economic growth for 2018, with an anticipated growth rate of 6.7-6.8 pct.

The growth scenario did not take into account an increase in crude oil exports given that local production has forcefully bounced back and in the context of a strong recovery in the price of crude oil on the world market, which is expected to stand at an average US$65 per barrel this year as Russia and OPEC nations have reached a deal on maintaining their output of crude oil.

By late last week, the prices of WITI and Brent oil stood at US$67.96 and US$63.35 per barrel, respectively, on the London market.

The government has set a target of exploiting and processing 11.23 million tonnes of crude oil this year, almost the same as last year.

“However, based on the specific developments of the oil price, the government can decide on a climb in exploiting more crude oil,” said a scenario report.

Thus, if the crude oil price hovers at an average US$65 per barrel this year - higher than last year’s average of US$60 per barrel – the economy will grow higher than the set 6.7 pct rate.

Last year, Vietnam exported 6.9 million tonnes of crude oil, with turnover of US$2.9 billion, up 67.1 pct annually, the General Statistics Office reported.

According to Vietnam’s state-run giant PetroVietnam and the Ministry of Industry and Trade (MoIT), in this year’s first quarter, global crude oil prices averaged at US$68.5 per barrel, which is US$10.5 per barrel higher than in the same period last year.

Vietnam exploited 3.64 million tonnes of crude oil, down 7.7 pct against last year’s corresponding period. In which 3.18 million tonnes was domestically exploited, down 7.9 pct annually, and 0.46 million tonnes is foreign exploited, down 6.1 pct annually.

Also in this year’s first three months, the country exploited 2.71 billion cubic meters (m3) of natural gas, up 7.5 pct annually. The figure is expected to reach 9.6 billion m3 for the whole year.

According to PetroVietnam and MoIT, if the world’s crude oil price fluctuate around US$50 per barrel this year, the domestic oil and gas industry will boost the exploitation of the product (see box).

Accordingly, the output of exploited crude oil is expected to reduce quarter-on-quarter because of declining reserves in many oil fields of Vietnam. In this year’s fourth quarter, a new field named Ca Tam will officially come into operation.

This year, the oil and gas industry will continue boosting the exploration, appraisal and exploitation of a number of oil fields including Plot B, Ca Voi Xanh (Blue Whale), and Ca Rong Do (Red Dragon Fish).

Targets for exploiting oil and gas in each quarter of 2018:

Theo NDO